AVOCO delivers growers a record OGR

A record Orchard Gate Return payout to growers has reinforced Avoco’s solid reputation as New Zealand’s leading avocado exporter.

Last month the Avoco – which is the trademark name for The New Zealand Avocado Company Ltd – supply base of more than 800 growers received their pool statements and final payments for the 2017-2018 season, with the OGR outstripping previous values.

The achievement coincides with the fifth anniversary of the company’s formation. During this time, Avoco has built a proven record of delivering top level returns to avocado growers, year in year out, whether facing short crop seasons or large.

Marketing and communications manager Steve Trickett attributes the outstanding result to various elements of the Avoco business model combining to drive more positive outcomes for growers.

“It starts at the New Zealand end of the supply chain with loyal, committed, quality-minded growers, and ends in the marketplace with the best pick of customers in Australia and across all the markets we serve in Asia.

“In between, the strengths of an experienced team of staff across all facets of the business have applied their skills in market planning, shipping, logistics, forex management, sales and marketing, to extract the best possible result.”

Steve reports that without exception, values in all markets were ahead of expectation and budget, with Avoco managing a responsibly balanced market mix, sending 80 per cent of volumes to Australia and 20 per cent to the rest of the world. This ensured existing long-term key customers were supported while at the same time, continuing to build emerging markets for the future.

“In Australia we enjoyed very strong performances in both our major retail chain programmes where the vast majority of fruit was directed. Avoco growers enjoy the benefit of a very efficient and cost-effective direct delivery supply model without extra margins and costs faced by some others exporting there.”

The Asian market arena combined to deliver higher values. Volumes supplied, however, were less than what has been sent in previous seasons and inevitably “supply versus demand 101” came into play.

“With every season our marketing team are developing a better sense of how best to prioritise market allocations within the prevailing NZ avocado production environment of alternate bearing.”

In Korea, Japan, Singapore and Thailand, which currently comprise 85 per cent of NZ’s avocado exports to Asia, close to seven out of 10 pieces of fruit shipped carried Avoco’s premium ‘Avanza’ brand. In other emerging markets, such as India, Avanza represented 100 per cent of sales made there.

The bulk of NZ growers – 60 per cent – supply Avoco and with that industry leadership comes responsible decision-making, adds Steve.

“We could have taken the easy route and exported a higher volume to the lucrative Australian market but Avoco must provide the leadership in driving new and emerging market development to future-proof the industry for the seasons ahead when crop volumes are projected to ramp up.”

With avocado heavyweight Chile exploring access to the Australian market, it was a timely reminder for exporters to have both a five-year market view and ongoing engagement with a network of customers across the globe.

Avoco will debut exports to China as the 2018-2019 season starts in September. For this first season, Avoco will source fruit from a tight selection of compliant BOP growers, to be packed by three packhouses in the region.


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