Produce exporter Darling Group and its New Zealand avocado supply arm, Just Avocados, are gearing up for the 2020-2021 season with optimism despite the challenges of COVID-19.
Darling Group’s general manager of sales and marketing, Jacob Darling, says the primary matters are increased freight rates, interrupted port operations and altered supply and demand trends affected by the slowdown of food service.
“But then in contrast we see online and offline retail are operating quite well.”
Jacob says Darling Group is working with their freight service providers and communicating directly with airlines to better understand what they can control for the coming season.
“There is also discussion happening on possible collaboration with other exporters to ensure growers are not disadvantaged in uncertain times.”
Jacob says the 2020-2021 export marketing strategy for Just Avocados will continue to focus on Asia and the building of Darling Group’s consumer brands Darling Avocado and Jake’s Avocado.
“Positive progress has been made towards our aim to put 50 per cent of export volume into Asia; the total volume shipped last season increased from 28 per cent in 2018-2019 to 42 per cent in 2019-2020.”
Jacob says Darling Group’s Australian business operation continues to add value to their NZ avocado exports. “Darling Group’s new warehousing and logistics facility in Brisbane, due to be completed August 2020, is positioned to help ease the challenges of import handling and throughput.
“Australian import protocols continue to be challenging so our investment in technology and capability to handle this well for our growers is important.”
Jacob says Just Avocados’ focus on accommodating growers’ needs in regards to harvest timing, tree health and ongoing fruit production has driven Darling Group’s plan to place 50 per cent of their NZ avocado export volume into Australia and 50 per cent into Asia.
“Targeting key ‘premium’ markets in Asia, having a stable operation on the ground in Australia and providing a model with multiple supply options means growers can consider market dynamics and their orchard management preferences and decide what option best fits their business model.”
Supply contract options for Just Avocados growers are ‘On consignment’, ‘Pool 1/Early season pool’ and ‘Pool 2/Late season pool’.
Jacob says the primary reason for the move away from a season-long pool in 2019 was to drive better understanding of profitability.
“Having growers pick late in the season and convince them that they are getting a better financial outcome needed to be addressed.
“The national grower base is also changing; there are new participants and the timing of each region is changing. With this comes a more commercially-focused approach required from exporters to accommodate all growers.
“Hence, the need for a variety of marketing options which can work in with a grower’s goals for their orchard.”
Each marketing option is designed to suit needs which Just Avocados has identified among its growers.
“The purpose of the consignment option is to offer a solution to growers with early maturing orchards that are of significant scale and can focus on maximising early market outcomes.
“Pool 1 caters to growers who place importance on harvesting pre-flowering to optimise their return crop. Pool 2 offers the opportunity to hold crop late if that is in the grower’s best commercial interest.”
Jacob says Just Avocados’ supply model allows for discussion between exporter and grower to weigh up harvest timing and the implications of that versus market selection and values.
“We are in the business of growing fruit profitably and sustainably and to provide that the pool structure needs to put the orchard’s best interests first. Higher pack-outs and consistent annual production are key drivers to profitability, these are not sacrificed through our pool structure.”
Darling Group exports Just Avocados’ NZ avocado volumes from growers who pack through Just Avocados – Darling Group’s own dedicated avocado packhouse in Katikati – and is an option for those packing through Eastpack in the BOP, and Natural Touch and Far North Packers in Northland.