By Jacob Darling – GM Sales and Marketing, Darling Group Marketing
Having decided to leave the marketing collaboration AVANZA in 2015, seven years later we are seeing the benefits of backing ourselves to deliver on a specific and unique strategy as we pay a first pool OGR of over $10.00, in what will be remembered as one of the most challenging years the NZ avocado industry has ever experienced.
Just Avocados/Darling Group represent 37% of the total industry volume including both export and domestic crop. Of our total export volume, Just Avocados placed over 66% into Asian markets, compared with the industry average of just 28%.
We do face challenges in terms of the time it takes to get fruit to many of our markets, and the rate at which dry matter rises and can, if not managed appropriately, influence fruit quality. For these reasons, if we want to optimise the opportunity in Asia, we need to go hard early. We also have a strong philosophy that this strategy helps long term consistent orchard production.
One positive from this season is the need to review the commerce. What is clear is hanging crops late is not viable. The two manageable factors for a grower are production and production cost. At a $15+ per export tray OGR over a long-run average, growers need to be producing 20 tonnes per Ha at a 65% export packout or greater to give a sustainable profitable outcome. However, altering the production or packout below these points starts to put a question mark over the viability of the grower going forward.
A real success for the Darling Group has been our China programme. Just Avocados represented 55% of the total industry volume exported to China this season. With China being the big driver in the Asia space going forward, we have set a good base to continue the growth. Across all our key tier-one markets in Asia, we represented an average of 37.5% market share. Our total volume into Asia exceeded 390,000 trays, a 400% increase from last season.
A big part of the success out of NZ is Darling Group’s wider 12-month supply strategy, built around ensuring we have relevance in the marketplace. Darling Group has been sourcing product through international partners for many years and we can now deliver our brand into key markets 365 days a year. When considering NZ’s avocado export volume to Asia this year only represented 6.2% of Asia’s total consumption, the need for relevance in these markets is critical.
We have an optimistic goal of building a brand that holds value in the eye of our trade partners and the consumers across our tier-one markets in Asia. To push the price in the right direction, we must add value outside of the obvious, which has been driven by how we tell our story.
Engaging with brand ambassadors in market, delivering a range of point-of-sale material, and utilisation of QR codes across all our marketing material are just some examples of what has been put together over the last few seasons.
Outside of our market development strategy, our focus is also on increasing both harvesting and packing capacity. With Covid-19 highlighting the importance of an efficient supply chain, it only helps sharpen the focus on what we can control in New Zealand going forward.
With one of the more difficult seasons behind us, we are excited about what the next 12 months has in store. Strategically we will likely remain unchanged in our view of the coming season, with a clear vision backed by the commercial imperative of profitability.
We look forward to discussing the opportunity for growth inside the wider group or joining the Darling Group family.