AVOCADO EXPORTS: INSIGHTS AND OUTLOOK - HENRY MCINTOSH EXPORT MARKETING AVOCO AVOCADOS: THE TARANAKI OPPORTUNITY WEDNESDAY 17TH MARCH 2021 ...
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Avocado Exports: Insights and Outlook Henry McIntosh Export Marketing AVOCO Avocados: The Taranaki Opportunity www.avoco.co.nz Wednesday 17th March 2021
Plan for today AVOCO overview Exporters – what do we do Where does the fruit go, and how does it get there? Sitting in the ‘Premium’ end of the market Forecast volume (10 year plan) Outlook: Challenges and how to manage them henry@southernproduce.co.nz www.avoco.co.nz
Exporters - what do we do? • Support growers with technical info, food safety, field days etc • Administer grower pool • Manage flow of fruit to match customer requirements • Negotiate season-long programs with customers • Manage in-market activities (promotional & technical) • Organise shipping and logistics from packer to customer • Support customers and build consumption/brand recognition 800+ growers 60% of Industry volume henry@southernproduce.co.nz www.avoco.co.nz
AVOCO henry@southernproduce.co.nz www.avoco.co.nz henry@southernproduce.co.nz www.avoco.co.nz
AVOCO Packer Partners henry@southernproduce.co.nz www.avoco.co.nz
NZ Avocado Growers henry@southernproduce.co.nz www.avoco.co.nz
Industry Production – Hectares by Region 4500 4000 3500 3000 2015/16 2500 2016/17 2000 2017/18 1500 2018/19 2019/20 1000 500 0 Far North Mid North Bay of Rest of NZ Total Plenty henry@southernproduce.co.nz www.avoco.co.nz
Industry Production – Export volume Export Production by District 5000 4500 4000 3500 5.5 Trays (000’s) 3000 2015-16 2500 2016-17 2000 2017-18 1500 2018-19 1000 2019-20 500 0 Far North Mid North Bay of Plenty Rest of NZ Total NZ henry@southernproduce.co.nz www.avoco.co.nz
Industry Yield – tonnes per hectare (av.) 14 11.1 11.5 12 10 8.9 8 8.3 8 7.4 Tonnes 6 4.7 6.1 5.9 4 2 3.4 0 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 *Research suggests 12-15 tonnes per hectare is required to be economically viable henry@southernproduce.co.nz www.avoco.co.nz
Where does the fruit go? Historic 2020-21* 10% 20% Australia Australia Asia Asia 80% 90% *The effects of COVID-19 on shipping and demand henry@southernproduce.co.nz www.avoco.co.nz
Industry Exports to Asia henry@southernproduce.co.nz www.avoco.co.nz
How we Prioritise Markets • Balance between optimising grower returns and long term market development • Identifying high potential markets and building a position for our brand and product • Having a sensible spread of markets • Identifying the markets where we can be relevant • Access, duty, distance, competitors • OGR henry@southernproduce.co.nz www.avoco.co.nz
Competing Origins henry@southernproduce.co.nz www.avoco.co.nz
Thailand Avocado Imports KGs henry@southernproduce.co.nz www.avoco.co.nz
Korea Avocado Imports Tonnes henry@southernproduce.co.nz www.avoco.co.nz
Australia • Has historically been typified by: Strong demand / High values • Highly dependent on WA supply – more on this later • Biggest challenge is meeting retail specs •
Australia Historic 5 Years Time 20% Australia 45% Australia Asia 55% Asia 80% • Increasing WA production • New plantings in AU and NZ • Chile gaining access to AU henry@southernproduce.co.nz www.avoco.co.nz
Chile 450,000 trays in the first year henry@southernproduce.co.nz www.avoco.co.nz
The ‘premium’ market – how we stand out Increasing cheaper competition means that we need to work hard to command a premium. NZ will never be able to compete on price, so the focus is on value added products/brand/service. The goal: to get supermarket buyers and end consumers to choose NZ avocados first. How? • Focus on fruit quality – entire supply chain • Build brand recognition • In-market support • Technical and merchandising training • Extensive promotional campaigns henry@southernproduce.co.nz www.avoco.co.nz
Photos From the Markets henry@southernproduce.co.nz www.avoco.co.nz
Industry Export Volume – 10 Years 6,000 5,645 5,450 5,201 5,000 4,850 4,800 4,731 4,000 3,616 2,979 3,000 2,551 2,235 2,000 1,000 - 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 henry@southernproduce.co.nz www.avoco.co.nz
Outlook – Industry Projection • Planted before 2016 • Planted post 2016 • Large plantings 2016-2022 • Forecast estimate of new plantings post 2020 henry@southernproduce.co.nz www.avoco.co.nz
Outlook - Challenges • Increasing global production (notably AU) • Increased competition from South America • Potentially more NZ exporters • COVID-19 • Disruption to sea freight • Packing/harvest requirements (China) • Travel restrictions • Increased costs of air freight (2020 was 2-3 x 2019) • Increasing compliance costs • International perception of avocado sustainability (e.g. Chile water crisis) henry@southernproduce.co.nz www.avoco.co.nz
Outlook – Positives and Managing Challenges • Consumption is increasing globally – opportunities in Asia • New export market opportunities (Vietnam, Indonesia) • Decreasing effects of biennial bearing • Fruit quality focus through entire supply chain • Improved branding and consumer messaging • Product differentiation • Market prioritisation • Improving shipping technology and routes henry@southernproduce.co.nz www.avoco.co.nz
Thank you Any questions? henry@southernproduce.co.nz www.avoco.co.nz
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