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Record OGR for AVOCO growers
22 May 2018

A record Orchard Gate Return has reinforced AVOCO’s solid reputation as New Zealand’s avocado export leader.

Last month AVOCO’s supply base of more than 800 growers received their Pool Statements and final payments for the 2017-18 season, with the OGR outstripping previous values.

AVOCO staff and growers alike are celebrating the achievement, which coincides with the fifth anniversary of the company’s formation. Across this time, AVOCO has built a proven record of delivering top level returns to avocado growers, year in year out, whether facing short crop seasons or large.

AVOCO marketing and communications manager Steve Trickett attributes the outstanding result to various elements of the AVOCO business model combining to drive more positive outcomes for growers.

“It starts at the New Zealand end of the supply chain with loyal, committed, quality-minded growers, and ends in the marketplace with the best pick of customers in Australia and across all the markets we serve in Asia.

“In between, the strengths of an experienced team of staff across all facets of the business have applied their skills in market planning, shipping, logistics, forex management, sales and marketing, to extract the best possible result.”

Steve reports that without exception, values in all markets were ahead of expectation and budget, with AVOCO managing a responsibly balanced market mix, sending 80% of volumes to Australia and 20% to the rest of the world. This ensured existing long-term key customers were supported while at the same time, continuing to build emerging markets for the future.

“In Australia, we enjoyed very strong performances in both our major retail chain programmes where the vast majority of fruit was directed. AVOCO growers enjoy the benefit of a very efficient and cost-effective direct delivery supply model without extra margins and costs faced by some others exporting there,” says Steve.

The Asian market arena combined to deliver higher values. Volumes supplied, however, were less than what has been sent in previous seasons and inevitably, “Supply vs Demand 101” came into play, according to Steve. “With every season our marketing team are developing a better sense of how best to prioritise market allocations within the prevailing New Zealand avocado production environment of alternate bearing.”

In the markets of Korea, Japan, Singapore and Thailand, which currently comprise 85% of New Zealand’s avocado exports to Asia, close to seven out of 10 pieces of fruit shipped carried AVOCO’s premium “AVANZA” brand. In other emerging markets, such as India, AVANZA represented 100% of sales made there.

The bulk of New Zealand growers (60%) supply AVOCO and with that industry leadership comes responsible decision-making, adds Steve.

“We could have taken the easy route and exported a higher volume to the lucrative Australian market but AVOCO must provide the leadership in driving new and emerging market development to future-proof the industry for the seasons ahead when crop volumes are projected to ramp up.”

With avocado heavyweight Chile exploring access to the Australian market, it was a timely reminder for exporters to have both a five-year market view and ongoing engagement with a network of customers across the globe.

To this end, AVOCO will debut exports to China when the 2018-19 season starts in September. For this first season, AVOCO will source fruit from a tight selection of compliant Bay of Plenty growers, to be packed by three dedicated packing houses in the region.

 

 

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