“Let's prevent avocado from becoming a luxury product”
“There’s still room for growth in the market, and we’re expecting considerable growth in the coming years,” says Greg Vicherat of Halls. “Right now, consumption is still growing quicker than production globally, so there’s definitely still room for growth.” The growth figures don’t lie. For example, the European market grew by 17 per cent last year. The average European consumes about one kilogram of avocados per year. Despite the quick growth of the market, this consumption pales in comparison to the average three kilograms consumed by Americans. Greg mentions the difference between Scandinavians, who consume about 2 to 2.5 kilograms on average per person, and the Germans, who are far behind with only 600 grams per person. “Germany is a market of more than 80 million consumers, and it is expected that this market will definitely start growing,” he says. Double growth figures have also been recorded in Eastern Europe.
The same trend can be seen on other continents. In the US, 15 per cent more avocados were consumed last year, and the Middle East is also a promising market. However, the truly impressive growth figures can be found in Asia. In Japan, the market grew by eight per cent. That’s low compared to other countries, but the high disposable income of the Japanese make it an interesting market. In South Korea, consumption allegedly tripled, and China, where the market is still in its infancy, imported more than 30 per cent more avocados than in 2016. The Indian subcontinent is a final market with much potential. Last year, Peru exported to India for the first time ever. The Chinese market is currently not open for the South Africans, but they are working on that.
Shortage of avocado trees
Comparing this to Halls’ ambition for growth gives a good image of the exponential increase in consumption. The South African company has as its goal the expansion of their production area by 250 hectares annually for the next three to five years.. To achieve their goal, Halls have now, together with Du Roi, developed their own clonal tree nursery for premium trees to enable them to supply their grower partners and their own farms with trees. The waiting time for trees at some of the top grade nurseries in South Africa can be between 8 and 10 years.
The outlook is optimistic for the current South African season. The effects of the drought of two years ago have disappeared and the rain in the east of the country, where majority of the avocados are grown, has resulted in positive production figures. The South African production is expected to be 40 per cent higher than last year. The expectations for Halls’ production is higher, closer to 60%, with exports amounting to roughly 1.9 million boxes. “This is as a result of a number of factors,” Greg explains. On the one hand, some of our grower partners orchards are not irrigated, which means these orchards suffered more from the drought. Recent rains have meant these orchards are now back to full production. Besides this, new plantings are also coming into production, and yields are up due to improved farming practices.
Cape avocados extend season
Most of the avocado production for Halls can be found in the east of the country. “That will soon change, because we have plans to plant in the Western Cape in the very near future,” Greg says. By taking this step, Halls doesn’t just expand their area, but they’ll also extend the season for South African avocados. “The Cape region has a Mediterranean climate, comparable to Malaga’s climate in Spain. It’s a completely different type of climate than in the rest of the country,” Greg explains. The South African season usually lasts from March to September or October. With the new planting in the west of the country, Halls is aiming for a seasonal extension until December.
Hass vs Greenskin
The Hass avocados are very popular, but this means the greenskins are pushed further into the background. Demand for Fuertes and Pinkerton is gradually decreasing in favour of demand for Hass. Germany is an example of this change. Five years ago, German consumers still chose greenskins, and the dark colour of Hass was associated with decay. Thanks to promotions, this sentiment has changed in favour of Hass.
Quality of Hass and Greenskins is comparable. The rise of Hass is mostly thanks to the promotion of this variety and the large supply because countries like Peru and Chile are completely devoted to this variety. “The advantage of Hass is that the peel colours during ripening, so consumers can see this,” Greg explains. Besides, a ripened Hass is less fragile during transport. “Greenskins have a thin peel, so they bruise more easily during transport.”
Although there are still good markets for greenskins, the market is clearly moving more and more towards Hass. That’s resulting in an additional challenge for growers in South Africa, where a large part of the area consists of greenskins. “The soil isn’t right for growing Hass everywhere,” Greg continues. Because of that, yield can be lower in certain regions, making production unprofitable in those regions, so that the production of Fuerte becomes more profitable. “That switch isn’t easy.”
Growing avocado seeds
European retail is supplied from offices in the UK, France, the Netherlands and, since April this year, Spain. For that, year-round supply is necessary. Greg says their own year-round production is needed in future. That’s why the company isn’t just looking at the possibilities of seasonal extension in South Africa, they’re also looking into the possibilities in countries such as Chile, Colombia, Portugal and Spain. “Kenya is important for us as well,” Greg says. “We have a partnership with Kakuzi, the largest avocado production company in Kenya.” In the coming eight years, Kakuzi wants to double the area from its current 600 hectares to 1,200 hectares. “The season partially overlaps with South Africa and Peru, but theirs lasts longer.”
Considering the problems of tree availability, it’s not surprising Greg mentions the shortage of avocado trees as the largest challenge for the sector. “We need more tree nurseries in order to supply plenty of good quality trees ,” he says. Due to the shortage, seedling rootstocks are currently used to grow trees, but this has risks. Greg says the quality of the avocados on the trees can become disappointing in the long run, and that these trees are insufficiently resistant against certain diseases.
“We have to plant more to prevent avocados becoming a luxury product,” he continues. “Prices have increased considerably in recent years, that’s why we have to prevent prices becoming too high, and consumers losing interest in avocados.” While a box of avocados cost only 6 euros in 2014, that price had doubled to 12 euros by last year.
“We’re proud we’re Rainforest Alliance certified for both the production in South Africa and in Kenya, as of this year,” Greg concludes. Last year, the certificate was issued for the Kenyan activities. This year, South Africa followed, and the process for getting the Peruvian production certified has now also started.
More information:
Halls
Greg Vicherat
greg@hlhall.co.uk
www.halls.co.za