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Market investment pays off for AVANZA in Korea
22 March 2018

Consistent efforts by AVANZA to educate the Korean consumer on the health benefits of New Zealand avocados have been rewarded with a season of record returns.

Now, AVOCO, New Zealand’s largest avocado export group, and its AVANZA brand, face the challenge of how best to meet the demand in Korea and other high-paying markets while avocado growers grapple with achieving more consistent production.

In 2017, Korea became the most important avocado market by volume and value for New Zealand outside of Australia. Korea imported 1.1 million avocado trays from all origins – more than double the volume imported in 2016. The overall value rose by 158% – up from US$12 million in 2016 to US$31 million last year.

New Zealand shipped more than 145,000 trays to Korea last season, with AVANZA accounting for 66% of that volume. Returns per tray in this rapidly developing market improved by close to 20% compared to the previous season.

Promotional activity, led by AVANZA, had grown the avocado category in Korea, where people were prepared to pay a premium for large New Zealand-grown fruit, says market manager Martin Napper.

Three years ago, avocados were a relatively unknown fruit in Korea, with only about 250,000 trays imported. That grew to 500,000 in 2016 before taking a giant leap last season when Korea became a one million tray market.

“All the work we’ve done to educate consumers on the health benefits of avocados as well teach importers and distributors how to correctly handle and store the fruit, is paying off with increased sales,” he says.

Young Korean women were particularly receptive to the nutritional messages about New Zealand avocados, which have been proven to have twice as much vitamin B6 and 20 per cent more folate than those grown in other countries.

Last year’s promotional activity included an ongoing association with Maeil Dairies, one of the largest beverage companies in Korea. The partnership enabled AVANZA to participate in Maeil’s soy milk and avocado smoothie promotions, including far-reaching social media campaigns.

Market investment also included recipe ideas and supermarket demonstrations, which are an effective way to reach first-time consumers. Over the past four years, AVANZA has held 1500 sampling sessions, reaching 600,000 consumers.

Centrepiece displays in selected stores also provide consumers with the option to select a ready-to-eat piece of fruit – a strategy that has been proven to increase sales by over 300%, Mr Napper says.

AVANZA’s proven promotional strategies were being applied in North and South-East Asian markets.

“We have struck a formula that we know works, so it makes sense to apply the same strategies to all our markets, including Singapore and Thailand – anywhere where we can see potential for real consumption growth as diets become more varied,” Mr Napper says.

While developing markets outside of Australia was important for the long-term future of the industry, demand for fruit was currently outstripping supply, which was challenging.

Last season’s low crop volume meant New Zealand could only export 2.2 million avocado trays – less than half the volume shipped offshore during the bumper crop of 2016-17. AVOCO handled 1.3 million trays with about 81% sent to Australia – New Zealand’s highest-paying market.

AVOCO’s marketing and communications manager, Steve Trickett, says the supply shortfall caused by irregular fruit bearing meant volumes were spread thinly across some AVANZA markets last year. With China opening its doors to New Zealand, all exporters wanted more fruit to maximise the growing market opportunities,

“As an industry, we’re investing in research to achieve more consistent production and planting an extra 1000 hectares in young trees. But it will take time for us to see the benefits of that investment.

“In the interim, growers have to adapt quickly to meet specific customer market compliance requirements to ensure their fruit can be exported to these new markets being opened. As we grow our markets and consumers develop an appetite for avocados, every piece of fruit counts.”

 

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