By Midge Munro – Group Communications and Marketing Manager, Darling Group.
Final export avocado volumes for Just Avocados and Darling Group growers were loaded out early this month, ending another challenging season.
Over the 2022-23 season Darling Group placed 66% of its volume into Australia and 34% into Asia – a strategy that Jacob Darling, Chief Operations Officer for Darling Group says is slightly different to the industry overall.
“The industry split is likely 72% of export volume into Australia and 28% into Asia.
“Asian markets performed well in the early part of the season and volumes at this time were focussed as much as possible to this region.”
Support of Asia with early volumes of quality fruit is key to Darling Group’s strategy of developing this market for the future.
“Although our volume into Asia has been back from last year, we remain New Zealand industry leaders in this space, with all key markets representing a weighted average of 30% or more supplied from Just Avocados.”
In Australia, the slowing economy had a significant effect on demand and caused weaker than anticipated values in the wholesale market. However Darling Group’s exposure to the wholesale market was mitigated.“Darling Group is fortunate that 90% of our volume shipped to Australia goes to retail. The gap between retail and wholesale in Australia this season was from AUD $8.00 to $12.00 which was far greater than previous seasons.”
The Australian food service and processing market has also been positive for Darling Group.
“At the end of January, we completed a significant programme into the food service channel with estimated orchard gate returns to be north of $5.00. Although this figure is low, it will make a considerable difference when noting that 30% of industry volume (Class 3 / process) was not packed or sold into the oil market this season.”
Harvesting conditions this season were impacted strongly by record rainfall. Quality and shipping issues also hampered supply.
“In the Bay of Plenty, 45% of our available harvest days were lost due to rain and our Class 1 pack out was 14% lower on average than last season.
“Shipping services this season were the worst we have seen with inconsistent services meaning what were supposed to be weekly services sometimes were up to four weeks apart.
Jacob says the inconsistency of the supply chain cost their growers and customers, but their business model shielded them from the worst of the outcomes.“Remaining flexible and adjusting to difficult conditions was imperative to getting through this season. Managing the total supply chain enabled us to work with the different departments to ensure we gave our customers what they required despite the challenges.
“Managing harvest plans amid relentless rain through the busiest part of our season and delivering on market expectations was nothing short of diabolical; however, the Darling Group team navigated through well, and I can confidently say that all grades and volume were picked, packed and sold.”
Jacob says that this season has highlighted the importance of growers maximising production and pack out and of the Darling Group team selling all grades at value.
“Production and packout has a far greater impact on profitability than dollars returned. We encourage growers to invest in their knowledge and/or new technology to improve these elements.
“Having an integrated supply chain has meant that our team can deal with the diversity of challenges and still get all crop picked, packed, and sold to hopefully result in a total dollars per bin this season that will be respectable.”