Collective efforts to deliver quality fruit to Australia and an industry-leading retail-first marketing strategy has resulted in another satisfying Orchard Gate Return for growers supplying AVOCO.
In late April, more than 800 growers who export their avocados with AVOCO received their Pool Statements and final payments for the 2019-20 season. Another solid performance by the grower-led company has ensured growers have banked healthy returns for their fruit, enabling them to advance the success of their own orchards and the New Zealand avocado industry.
The result reflected committed efforts across AVOCO’s supply chain to improve the quality of fruit supplied to customers, especially in Australia, where a record 76% of AVOCO’s pool volume was sold directly to supermarkets.
AVOCO marketing and communications manager Steve Trickett says Australia’s major retailers trusted AVOCO to consistently deliver good quality fruit and the company rewarded that faith with tighter picking and packing disciplines and in-market quality checks, ensuring the seven-month supply programme to Australia met the expectation of discerning shoppers.
“We achieved a vastly better fruit quality result in Australia this past season compared to the previous one,” says Steve. “We benefited from favourable weather conditions across the harvest season and our OGR result can also be credited to massive efforts put into improving quality by growers, harvesters, packers and our in-market fruit handlers in the Australian market especially.”
In 2019-20, AVOCO shipped 2.3 million trays, a 23% increase in volume on what AVOCO handled in the previous season. It also recorded a further lift in its share of the overall industry crop, ending the season by accounting for 64% of total industry exports.
About 85% of fruit was sent to Australia, with the remaining volume shipped to Asia where its avocados are marketed under the AVANZA brand. Last season, AVANZA supplied nine markets across Asia including Korea, Japan, Singapore, Malaysia, Thailand, India, Taiwan and China – a market where New Zealand was granted access in 2018. AVANZA also initiated a small retail programme in Hong Kong with good prospects for future growth.
The Asian market arena delivered a mixed bag of results this past season with quality issues the main influencing factor on outcomes in markets served by ocean freight, involving 15 to 21-day transit times. AVANZA, together with other exporters, is turning its attention to implementing new shipment protocols and tighter disciplines in specific parts of the supply chain. These are designed to replicate the turnaround in quality performance enjoyed in Australia last season following poor quality outcomes in the two seasons prior.
Next season, early estimates suggest the total industry export crop will increase by between 15% to 20%, resulting in an indicative forecast volume of between 4.15 million and 4.3 million export trays.
With harvesting due to start in three to four months, AVOCO is busy refining its export market plans factoring in contingencies for each, given the uncertainty that remains around the impact COVID-19 will have on supply chain logistics as well as market demand, particularly across Asia.
While there is a great deal to learn from the likes of the kiwifruit and apple and pear industries which are exporting to Asia through the COVID-19 period, market dynamics were changing weekly, Steve says.
“Our team is planning with even greater vigilance and our eyes wide open to what we face in the next export season. AVANZA remains committed to development of Asian markets, necessary future-proofing for the projected crop increases. As more is known about supply chain logistics and customer behaviours in each market, our experienced market managers will reset volumes and flows to ensure we optimise grower returns from the export pool.”
Encouragingly for growers supplying AVOCO, the outlook for 2020-21 across the Tasman remains positive. Australian growers are projecting reduced crop volumes and AVOCO already has firm and significant retail chain commitments in the order book.
Steve says AVOCO needs more fruit and welcomed new growers. He encouraged anyone wanting to make the switch to talk with a grower representative at any of the four packhouses that AVOCO partners within the Bay of Plenty – Kauri Pak, Trevelyan’s, DMS Te Puna and Apata.
“Now, more than ever, growers need to partner with businesses that can provide secure channels for their fruit to market.
“At AVOCO we are fortunate to have strong retail chain demand in Australia and the scale to build contingencies into our planning in Asia to reallocate volumes where necessary in a worst-case scenario.”