Just Avocados are one of the growing avocado exporters in New Zealand. As a group they exported just under 670,000 trays this year. "We represent 15% of the New Zealand industry and that is growing. We exported 570,000 trays to Australia, 60% of which went to the Australian retail programme, a significant growth on last year where we only did 18% to retail," explains Jarrod Redwood, General Manager of Operations and Growers at the company.
Just avocados has 6-7 hectares of avocados and kiwifruit in Katikati, there is a packhouse and cold storage as well as ripening rooms on the site.
The company has put a lot of effort into adding value to growers across their business. This involves helping the orchards become more productive by providing practical technical advice and tailored management plans, "We have a lot of new growers, as well as a lot of established and experienced growers.
"In New Zealand a lot of the new technology and growing techniques have not reached these growers yet and we have brought an experienced orchard management advisor over from South Africa to help our growers learn these new techniques."
Ian and Liz have 8 hectares where some of the trees are nearly 25 years old.
Avocados are alternate bearing and the volumes for the 2017-18 season are expected to be around half of this season. Although this remains a major challenge, Just Avocados is sharing management practices with its growers in an effort to mitigate the effects. Pruning and applying the right nutrition at the right time and in the right form are two topics they have covered with growers through practical demonstrations and one-on-one consultations.
"This coming season will be all about consolidation, the ability to achieve growth in our categories will be challenging, but we need to retain our relevance and shelf space with our customers in a low volume season with a view to next season, which may be double again," explains Jarrod.
Ävocado is a biennial crop and this year will see much lower volumes.
"Retailers work on a 12-month cycle and you are based on your last year's volumes and performance, so we need to make sure we communicate what is available but at the same time we have relationships throughout Asia which we have built up so we need to try to manage the expectations of all our customers. How do we do that when we have very limited volumes of fruit? The key will be to choose very carefully where we send the fruit and look at the value of the fruit in that market and also look at it over a 24 to 36-month.
"But we have to be accurate with what say to all our customers at the beginning of the season, we have to be realistic about what we can achieve. We can't over-promise and under-deliver. Thankfully most of our customers have been trading in avocados or at least fresh produce for quite a number of years and they understand that these things happen."
Harvesting will start in September when Ian will pick half the crop and then the other half in May, the Australian market is particularly good in January and February so it is good to have fruit at that time.
"We are still a very young industry in New Zealand," explains Jarrod. Growing practices and orchard husbandry are on a constant improvement programme. As an industry, we are on at steep learning curve to understand the dynamics of the avocado tree in our environment where implementing orchard best practice to maximize alternate bearing is of high priority. Alternate bearing can also sometimes mean one year of good earnings and one year of leaner earnings which can lead to making short term decisions and by doing that you lose site of the 3-5 year plan. "
The marketing programme into Asia is as significant strategy of Just Avocados, whereby new markets are developed with a very strong focus around optimising volumes to maximise value from the right markets. Just Avocados has made significant progress across a number of markets building solid programs with significant customers in this part of the world, according to Jarrod.
The avocado trees are grown slopes, some of them really quite steep, they use an all terrain picker which can lift the picker up to get the fruits on the top.
"This can be a challenge at times as there is different demand at different times of the season. Demand from SE Asia is early when demand from Australia is not strong; they tend to want fruit from us early December onwards and it can be a challenge for us to meet the Asian sea freight programmes at that time as the maturity of the fruit can cause problems at the other side. But having the ability to make those decisions on a commercial basis works better for us and for our growers. Detailed pre-season planning and strong disciplines on executing the plan are crucial to a successful outcome for our customers and our growers. Controlling the whole process and supply chain is imperative.
Brett Jarvis, Operations Manager and Midge Munro Group Communications Manager.
Export markets
Just Avocados' biggest export market is Australia followed by Japan. "Japan can be challenging for us, as it doesn't always get the same values which we get from the other markets, such as SE Asia or Australia. Last season, as an industry, we exported 280,000 trays to Japan, which imports between 9-11 million trays of fruit. This is a significant market for our industry in the context of Asia and the most developed market we supply. We have extremely good customers that we work with and, going forward, it's a very important market for us to maintain our presence in.
The packhouse has state of the art ripening and coolstorage facilities and a packing line to service its Bay of Plenty supply.
Korea is another very good market where we get continued growth and good values too. It has a much better rate of growth than Japan and the day may come when it over takes Japan," said Jarrod. "We send smaller volumes to Thailand, Taiwan, Singapore and Malaysia. The challenge is making the right commercial decision in the current commercial climate to make sure we return the values to our growers and remain competitive, but at the same time make sure we are looking two years or even five years ahead to make sure we are not limiting ourselves
At the moment market returns are in the $20-$24 dollars range per tray back to our growers and, as international demand increases at the rate it is, we expect values to at worst hold but more than likely strengthen.
The different boxes in which the avocados are packed, on the right the Mr Avocado brand.
Just Avocados' model in Australia is quite different to other exporters as they are aligned to JH Leavy & Co., through their parent company Darling Group. JHL is a wholesaler, distributor and marketer based in Brisbane. "We can manage our own supply there which gives us a much greater ability to manage cost, supply inventory and quality whilst trading directly with wholesalers and retailers.
"We also work with Costa Group, Australia’s leading grower, packer and marketer of premium quality fresh fruit and vegetables. Working with them allows us to be involved in a 12-month avocado supply programme, with Costa Group utilising their Australian supply in our off season. Being able to be a part of and provide a 12-month Avocado supply solution has resonated well in the retail space.
The packhouse pack for the local as well as the export market. The fruit can be stored for 40 days before shipping.
For more information:
Midge Munro
Darling Group
Tel: +64 7 549 3027
Email: midge@darlinggroup.co.nz
www.darlinggroup.co.nz