By Jacob Darling, GM Group Sales and Marketing
Week 44 marks the halfway point for Just Avocados’ crop exported.
Our volumes to date are running about 7% ahead of industry volumes which is in line with our focus on picking larger volumes early to manage orchard productivity long term.
Australia continues to take 80% of Just Avocados’ volume with the priority on supplying Australian retail.
Shipping delays continue to be the major challenge for the 2020-21 season.
Shipping
We have experienced considerable delays and disruptions out of New Zealand over the past few months.
These delays have been the result of multiple factors, including:
- Ongoing industrial action across all Australian ports with rolling strikes resulting in vessel berthing delays.
- Typhoon season in Asia causing delays to inbound vessels.
- Different Covid-19 requirements for vessel crews across different states in Australia forcing carriers to make changes in port rotations meaning vessels are arriving outside their scheduled berthing windows.
- Strong import volumes into Australia combined with reduced export volumes meaning a large surplus of empty containers clogging up empty container depots in Sydney in particular.
- A fatality at the Port of Auckland in late August resulted in significant delays and congestion there. This congestion flowed on to Port of Tauranga as importers and exporters shift volumes away from Auckland.
These actions have not only added cost to the supply chain but also created very irregular shipping schedules, often resulting in large 10-14 day gaps in vessel departures, typically followed by 2-3 vessels departing in the same week – which makes planning loadouts and minimising fruit age to market an extremely challenging process.
We remain optimistic that the situation will improve in the lead up to the Christmas/New Year period, but all signs suggest the challenging shipping environment is likely to persist for the remainder of the season.
Asia
Asia has been a highlight for Just Avocados this season. We have only placed 20% of total volume into the Asian markets but we have had successful sea freight outturns in all of our key markets – Singapore, Korea, Thailand, China and Taiwan. Just Avocados represents over 25% market share of all New Zealand volume into these key markets which puts us in great stead for future seasons where we will need our Asian customers to take more significant volumes.
We have placed a massive focus on supply chain management this season, mitigating on shore fruit age by optimising our picking and packing timelines. We have also made changes to our onshore logistics by trucking large volumes from Northland to the Bay of Plenty for prepacking to take advantage of Tauranga port services inclusive of avoiding weekend delays that have challenged us in the north. This has contributed to great outturns in Asia especially considering the fruit has been 35 days old in some cases.
Promotions in Asia
Following our activity to kick off the season in Thailand, we have been busy fulfilling requests from customers in China and Hong Kong who are keen to utilise our point of sale material. This has included the creation of three “Grower stories” videos featuring three orchards in the Bay of Plenty. These will initially have Chinese subtitles but will also be offered to customers in other countries with further translations.
We have also been promoting the Darling Avocado brand online through social media – Facebook and Instagram targeting our Thai consumers. In the past 28 days (11 Oct – 7 Nov) we have reached over 21,000 people with our facebook posts. Our website which is linked to scannable QR codes on our packaging and point of sale material has also allowed us together feedback from consumers with a very simple survey – to date this has received only positive feedback in regards to perception of the brand with all respondents selecting “Excellent” or “Great” when asked what they think of the brand.
Australia
In the Australian market. Just Avocados has prioritised retail. To date, we have delivered 110,000 trays into this channel (65% of our total volume to Australia). Keeping in mind that a large majority of volume shipped to Australia by the industry has not been applicable to the retail size profile. This has put pressure on market values at wholesale. Our weekly volume into retail is being managed well with no rejections or quality issues so far this season. We have been challenged with aged fruit which has been a function of shipping delays and port congestion.
Grower returns
Values continue to look pleasing for both pools early and late. Our early pool will be finishing 18 November and has a focus on aligning early picking to maximise productivity. Market values will range from OGRs of $25.00+ for 16 – 30 CT, note this is indicative. Just Avocado growers will have 25% of their total volume harvested between Dec and February in comparison to the industry’s 45%, these figures need to be highlighted as they show very different export strategies at play which will ultimately have an effect on returns. Placing larger volumes into the post-Christmas window will pull the weighted average of pool returns up as we expect high returns for the post-Christmas market. We ask growers to take per tray returns into consideration when they review their results vs the effect on long term production, pack outs and fruit quality. We understand that a large volume (70%) of fruit needs to be harvested pre flowering to maximise future production which is why we see the difference of 20% of all volume picked during December, January and February when looking at competing exporters.
Quality
Quality to date has been very good. Two dry years in New Zealand has contributed to a lack of moisture in orchards along with improved orchard practice. Pleasingly, we have not seen the chequerboard colouring in the fruit due to mixed maturities which has been present in past seasons.
Size profile has been problematic all season due to the high volume of small fruit. The industry is currently tracking at 50.2% of 28 CT and smaller, while Just Avocados through proactive management is tracking at 30.2% 28 CT and smaller. This will be extremely beneficial for growers as we allow small fruit to size and maximise values in later months.