By Glen Dunseath, CEO New Zealand Operations, Darling Group
As most in the avocado industry know, the last two years have been tough. Like many businesses in horticulture, our New Zealand avocado supply group, Just Avocados, has taken a harder approach towards streamlining operations, reducing cost, and in some cases carrying out restructuring. None of that is nice and some of it is hard; however, the business remains well set up and in a stable position with an excellent team ready to get into the 2024-25 season.
Orchard gate return results for Just Avocados growers for the 2023-24 season were announced in March and final payments are being made by the end of May. Overall, we are happy with the result although I am aware that it doesn’t make orchard profitability a reality, but we have delivered an orchard gate return that is at the top end of the export sector.
Given the challenges we faced last season – weakness in the Australian market and the ongoing risk in that space going forward, it is good to see that our investment and focus in Asia and our flexibility to push for new markets is delivering an optimised outcome for Just Avocados growers.
A specific challenge for our industry in the 2023-24 season was the large Western Australian volume of over 11 million trays. This reaffirmed Darling Group’s strategy to develop Asia and drove the need to review new market opportunities outside of Australia. The latter action resulted in our well-considered decision not to supply this market and instead we created the opportunity to be the first exporters to supply Canada with New Zealand avocados.
The 2023-24 season again showed that Darling Group can pivot within our existing business model to adapt to the changing environment.
Combining Darling Group’s New Zealand avocado business with its offshore trading activities means we are in the international markets all year on several product categories, not just as an exporter for the New Zealand avocado window. Our consistent customer interface allows us to easily identify the best start and end period for Just Avocados’ supply and quickly engage on opportunities (such as Canada) when they are available.
Another challenge in 2023 was a short New Zealand crop which challenges harvest, transport, and packing capacity optimisation. Just Avocados’ strategy to transport all harvested fruit to one location for packing proved a solid platform for a reduction in costs. A single site managing quality, volume, and logistics and a single dispatch system allowed us to maintain packing and packaging charges at similar rates to previous years. It also minimised quality variables and maximised the quality of fruit heading to our international customers. On such a short volume year the cost of multiple pack sites, packaging, container transport, and other associated costs would have impacted our return.
As we start to review what’s around the corner for the 2024–25 avocado crop, it’s great to see that our industry looks to have a far better crop on the way both in terms of volume and quality which will support our resilience in-market.
Our strategy this coming export season is to supply Asia (Hong Kong, China, and Korea), North America, and potentially Australia.
Darling Group will run one pool and will look to push having 80% of crop off before flowering (November). This in theory will allow us to maximise our opportunity to service long destination customers without exposing ourselves to quality issues.
Overall, Just Avocados’ focus will be similar to last season with value-based market selection, a cost-focused logistics and packing process, a well thought through technical programme, and good communication.