Avoco’s solid relationships with supermarket chains in Australia have been the silver lining in a season that saw it handle record volumes of fruit while coping with unprecedented shipping challenges.
More than 600 avocado growers supplying Avoco will soon receive payments for 2020-21 after the export pool is reconciled and Orchard Gate Returns are finalised. This follows an export season that spanned 27 weeks, completed in the last week of February when final shipments were made to Australia and Thailand. A record total of 2.9 million export trays were handled by Avoco, with 85 per cent sent to retail customers across the Tasman.
Only seven per cent of trays were shipped to Avoco’s customers in Asia due to softer demand and global shipping disruptions caused by the COVID-19 pandemic. Avanza were forced to shelve its plans for Korea and China only a few weeks into the season due to risks associated with fruit age.
Marketing and communications manager Steve Trickett says the unreliability and higher cost of shipping made it necessary to scale back volumes to Asia which normally receives about 20 per cent of Avoco’s total fruit volume.
“In Korea, for example, vessels were delayed or diverted, which resulted in fruit arriving 40-plus days after it was harvested,” says Steve. Other Kiwi exporters were also affected in Korea, with the New Zealand industry only supplying 18 per cent of the planned 250,000 trays.
Avoco exports to Asia under its Avanza brand and this year, Thailand became its largest market by volume outside of Australia. Serviced with air freight, early negotiations with airlines meant there were minimal issues securing the required weekly freight space and, while costly, ensured shipments arrived on time.
“Thai customers are prepared to pay a premium price for New Zealand fruit and largely absorb the extra costs that come with air freight shipping,” says Steve. “What’s encouraging for us are the signals we’re receiving from retailers that there is potential to keep growing our presence in Thailand.”
While Thailand was a star performer, Steve says it was disappointing to end the season so early in Korea and China, especially when fruit quality had improved on previous seasons.
“The drier growing conditions of 2020 helped give us better quality fruit but, unfortunately, those two markets didn’t get to experience this. Japan was another significant Asian market both Avanza and industry had to hit the pause button on this season.”
On the flipside, Avoco developed some new customer relationships with prospects for continued growth in other parts of Asia.
The season’s highlight was the key retail customers in Australia demanding greater volumes of fruit from Avoco, in part due to shorter domestic supply of avocados, especially in Western Australia.
“On the back of quality improvements made in the season prior, we were able to lever our strong relationships with major supermarkets to secure a bigger slice of the Australian market. Importantly this included significantly more volumes of smaller size fruit for prepack programmes.
“While Trans-Tasman shipping was a massive challenge, given the shortage of Australian fruit, this extra demand couldn’t have come at a better time, especially when sea freight shipping to many Asian markets became untenable.”
Steve says growers will be rewarded well for their efforts in adhering to best practice, especially at the time of harvest – work that leads to better quality fruit overall.
“Our Quality and Technical team and the work that Danni van der Heijden has done especially in reviewing harvest guidelines and working with our packhouse partners on recommendations to improve our export quality systems is now paying dividends.”
Early estimates suggest that next season could generate a similar or potentially even greater volume of New Zealand avocados, coinciding with a projected bumper Australian crop.
Steve says Australia will always be the main platform of Avoco’s export strategy, but a focus for the next five years will be driving demand for New Zealand avocados in Asia.
“As New Zealand’s crop grows, so too must our efforts in raising the profile of our brand in Asia so it can absorb up to 50 per cent of our total volume at value.”