The New Zealand avocado industry is a small player on the global stage – accounting for less than two per cent of the world’s avocado production – but as an export nation we’re punching above our weight.
In her two addresses at 2018’s New Zealand Avocado International Industry Conference, NZ Avocado CEO Jen Scoular said we’re the ninth-largest avocado exporter in the world – and the aim is to grow the industry even further.
“We talk of avocados as the third-largest export fresh fruit from NZ. So far we’re still quite a long way behind kiwifruit and apples, but we’re working on changing that.”
“We’re export-focused but we know the value of the NZ market – and how important it is to deliver to wonderful avocados to our NZers as well.
“We have export season of August-March. During this period – until now – we’ve exported all of our class 1 fruit. This year we’ve changed the Export Marketing Strategy to allow export of class 1 and class 2 for food service to our markets. That hasn’t started happening yet but is a change on our EMS.”
Jen says the NZ industry has 14 packers, 10 registered exporters, and 11 export markets. “We’ve also gone from two major nurseries to five in the last few years.
And the industry return, calculated from the returns NZ Avocado receives from exporters and the OGR, has shown a significant increase in value.
“As we talk of a step-change over the last five years – now we need to say: how do we make the next step-change going forward?”
Jen said volume is the big challenge going forward, citing exporters approaching a market one year and talking them into increasing volumes taken only to have to apologise the next for not being able to deliver it.
“We know things are changing, are happening on-orchard but this undulating and inconsistent– it’s not even alternate anymore, it’s irregular – volume is our big challenge that we need to keep working on.”
Jen said when the industry talked of $70 million in net sales in 2012-2013 and set a plan to quadruple sales to $280m and triple productivity by 2023 – “we weren’t quite sure how we were going to get there and we thought it was pretty audacious”.
“Having got to $200m already it’s pretty exciting we’re very much on that journey. I think part of that is all of you in this room working out how to get there and putting your efforts into that progression of our industry.”
And Jen said the rise of avocados has been felt worldwide. “Holy guacamole how the Hass avocado has changed the world.”
She pointed to avocado consumption in the US doubling, Mexican exports jumping from 11 million kilograms in 2000 to 800 million kilograms in 2015. “Chinese imports are increasing 250 per cent year-on-year…and restaurants are doubling the amount of avocados they’re using in recipes.”
Jen said social media has also been very good to the fruit – avocados are the most photographed food on Pinterest. “They’re also the ‘Oprah’ of Instagram. And apparently the way to post your engagement online nowadays is with your engagement ring in an avocado.
Jen said export volumes for 2017-2018 – a low-volume year – still saw NZ put 80 per cent of fruit into the Australian market, an incredibly important market to us.
“This market is from the very strong relationship our exporters have built up over the years. These relationships can’t be underestimated going forward.”
Risks and opportunities
Especially since NZ is the only avocado exporter into Australia – and its closest market – but this looks likely to change.
“We recognise Australia is progressing phytosanitary requirements that would enable Chile avocados to be imported. It’s definitely a risk for us.
“So part of the mitigation was we agreed with exporters to develop a campaign in Australia last year talking about great avocados, grown, with care, from our part of the world – Australasia – to quietly differentiate ourselves from Southern American avocados.
“We believe we’re a year away from Chilean avocados being in Australia, but we’re making sure we’re building up that market, to allow for new avocados coming in.”
Other export markets are evolving too. “Until two years ago Japan was our largest Asian market. South Korea has taken over, with Thailand pushing behind, Japan, Singapore and Taiwan now emerging as a market.
“China is a great market to be developing, with an ability to absorb some of the additional millions of trays we hope to be producing in the next 10-15 years.”
Investment in avocados in NZ is growing too, said Jen. “We’ve seen significant new investment into avocados in Northland.
“These are non-productive yet, but add another 800ha to our 3800ha. So an added 20 per cent on current production. And talking to consultants there’s continued ordering for new trees and land purchases for new orchards.
In the BOP a real rejuvenation of orchards is occurring, to improve low-producing parts of the orchard, or new parts being planted.
A $1b industry?
So what’s the potential impact of new plantings in terms of volumes? “Modelling this from current plantings not yet producing, by the end of 2030 we’ll gain another 2.4 million trays of avocados from the extra 800ha,” said Jen.
And NZ Avocado has started to model what the industry might look like in 2040. “Again we’ve been audacious – saying why wouldn’t current plantings continue? So we’ve modelled another 500ha of avocados in 2040. From a return perspective, we’re getting to a $1 billion industry by 2040,” said Jen.
“We believe we’ve got infrastructure relatively in place – we just need to sort out some more labour – and our export markets are being well-developed to take these volumes.
But there are things to manage. “Environmental issues are real – we need to tackle those. And we need some evidence-based research on sustainability.”
Jen also cited the meat industry’s concern over the popularity rise of plant-based proteins being “all okay with us…avocados have protein in them”.
“So we believe we’re very well-poised to meet our audacious goals. We believe the sales goal of $280m is something we can manage – and we’re ensuring we have as much structure, information and connection to help you meet these goals.”