Waiting for the growth spurt

Target of 12 million trays in industry's sights, writes Elaine Fisher
THE Avocado Industry Council has a stated aim of exporting 12 million trays of fruit by 2015 and at least one exporter is eagerly anticipating that growth.
"As a marketer, I can't wait for our export volumes to grow. It will be a challenge but an exciting one and we are more than ready to handle it," said John Carroll, Director of Primor Produce which works in partnership with post-harvest service provider Apata.
The industry has a long way to go to reach that 12 million tray target. In 2007-08, its best season so far, 2.6 million trays were exported and last season the figure was 1.39 million trays.
"Realistically, given the plantings in Northland and the Bay of Plenty, we probably should be a four to five-million tray industry by now but biennial bearing and unfavourable weather have worked against us," said John.
However, he's confident the problem of trees producing a commercial crop every second year will be overcome through research and with thousands of young trees coming on, the industry is poised for growth.
Primor is already the country's biggest avocado exporter with 34 per cent of the export crop, equivalent to 760,000 trays, in 2009-10. The company contributed 46 per cent of the total volume New Zealand sent to Japan and the US and the remainder was exported to Australia.
In its final March 31 payment to growers Primor achieved an average net orchard gate return of $20.80 across all sizes.
Apata CEO Todd Muller shares John's optimism in the ability of both partners to cope with increasing volumes of avocado thanks to their years of experience in the industry.
Since the 1990s when the partnership was formed, Primor and Apata have developed a marketing model based on a long-term vision to supply quality avocados to the market year on year, he said.
"We operate on a disciplined picking, packing and exporting volume of fruit each week for 22 to 24 weeks, meeting our customers' requirements and achieving the best value for growers over our entire pool."
By controlling the volume of fruit exported Primor was able to better influence the price in the market and also able to give clients an assurance of volume and quality.
"It is important when dealing with supermarkets to be confident about what you are offering. It is not always possible to say yes to their requests, and it is important to have a healthy business relationship that allows good debate. Pricing decisions must be fair to all parties, not least our growers."
It was also vital to deliver the quality, quantity and service promised to customers, John said. "Price is not the most important factor. Customers want to be sure you will consistently do what you say you will do."
Todd said "grower power" was vital to the future success of the industry.
Growers had significant investment in their orchards and relied on avocado returns for their livelihoods and so needed assurance that they would have on-going markets for fruit. Those who supplied Primor understood the logic of controlling volumes to achieve the best overall returns, he said.
"Our results are standouts not just financially and operationally over one season but we can show there is lasting value in building a sustainable and profitable export industry for the long term.
"Our growers tell us they like the way we work together from orchard through to market and see the value we return from this co-ordinated approach."
John said the partnership's long-held vision was to continually strengthen its supply and marketing chain. "We aim to provide truly excellent quality and value adding services to suppliers and customers that also promote export growth for the New Zealand industry.
"We've got the expertise, capacity and investment onshore and in the marketplace to handle bigger volumes and optimise the returns. It's been a bonus to have come this far in growing exports for good returns, but the real value will be realised when we hit the large volumes our industry is surely capable of producing," he said.
Eighteen years ago Primor formed an alliance with Apata when the Katikati based post harvest company was asked to establish a packing facility in Northland to handle avocados, establishing the basis for the on-going relationship which today operates an integrated orchard to customer supply and delivery system.
"Primor fruit was already being packed by Apata at Katikati in facilities also used for kiwifruit but the Northland packhouse was to be just for avocados," said John.
Increasing volumes of fruit did not necessarily mean reduced returns for growers as there were plenty of opportunities to grow new markets said Todd.
"We are fortunate to have our own high value market, Australia, right next door." However, the Asian and Japanese markets offered virtually untapped potential for high quality New Zealand fruit, he said.
John said Primor was working hard with Japanese distributors to improve their handling of avocados.
"Once we educate the Japanese to handle avocados the way the Australians do I know we will be successful," he said.
New Zealand's main competition in Japan is from Mexican fruit which John said was often small and unripe.
Todd said Japanese consumers wanted to buy ready to eat fruit which was of high quality.
"They tend to shop daily for fresh, ready to eat foods and we can deliver that with avocados because the shipping time from New Zealand to Japan is not much longer than to Australia."
Todd believes growth in avocado production will come from existing orchards maturing and from new plantings, which will probably be largely greenfields developments.