Even though trading conditions have been subdued, the Avocado Collective's Wayne Robinson remains confident the category is building toward stronger, more stable growth, with a maturing industry eventually compensating for the tough times.
"Overall, it's been an incredibly challenging season," Robinson says of Shepards, which are now finishing up. "Price uncertainty in the world, we've seen a lot of consumers move away from fresh produce while the cost of living is going up, and it has exacerbated what was already going to be a challenging season."
The result was sustained pressure on returns. "There's a fair bit of time that was spent where, unfortunately, the market was sitting below the cost of production," he says. "It's been tough, but we're almost through to the other end."
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Retail influence has been a defining factor. "Shepards, the timeline that they live on within the market is typically dictated by large retail, when they want to start and when they want to finish the season," Robinson says. "So there's a pretty hard deadline there as far as your crop has to be done if you want to be in that retail space."
That dynamic can force fruit into the market too quickly. "Growers could have had more opportunity to take their time and make sure that they're not oversupplying the market," he says. "But that's the structure we're working within."
Attention now turns to Hass, where supply is expected to be tight through the remainder of the year. "There's just not a lot of Hass to come between now and the end of the year," Robinson says, although he can see the upside of that. "I think there's a good opportunity to see value come back into the category for growers."
Even so, pricing must be handled carefully. "A $4 or $5 avocado on the shelf isn't good for anybody; consumers just leave the category," he says. "It's a delicate balance between wanting to recoup some lost returns but at the same time not wanting to see avocado priced out against other fruit."
Export dynamics add another layer, particularly as domestic prices strengthen. "Hass for us typically is anywhere from 30 to 35% of our total crop," Robinson says. "But we will face challenges this year where domestic pricing will be very buoyant, be high most likely, and it's really years like this where it's not about breaking records on volume, it's about maintaining relationships."
He expects some international supply to respond. "New Zealand will send a lot of its avocados this year. I would expect we'll see Chilean fruit at some stage," he says. "But it won't have a drastic effect on overarching pricing."
At the same time, export conditions remain uneven. "Australia might hit a high domestic price, but that doesn't mean Hong Kong, Malaysia, Japan, or Thailand are at the same level," Robinson says. "You've got to manage those markets carefully."
Freight costs have been a major constraint. "We've seen freight costs go from what was $3 a kilo to $8 a kilo," he says. "What was made up through maturity and market was unfortunately lost in freight or logistics costs."
Despite the challenges, he points to clear structural gains. "The industry is maturing, it is getting better," Robinson says. "If I look back two or three years ago, prices were $2 to $4 cheaper than they are this year. That tells me we are seeing maturity in the market."
Shepard exports are a key example. "We'll get close to about 450,000 to 500,000 trays of Shepards exported this year, which is a massive number," he says. "That's real growth in a very short period of time."
For Robinson, the current season is part of a longer arc. "I think we're on the bottom part of a curve," he says. "What we're going to see over the next eight to ten years is more maturity, more exports, more robust exports, and access to new markets."
The outlook, he maintains, remains firmly positive. "Like anything, there's growing pains," Robinson says. "But growers are getting better, the market is getting better, and while there are still a couple of clouds, there are clear skies ahead."
For more information:
Wayne Robinson
The Avocado Collective
Tel: +61 432 640 097
Email: [email protected]
www.theavocadocollective.com.au
