Australia: Mexican avocado entry “inevitable”, says exec

Editor's Choice More News Most Read Top Stories
Australia: Mexican avocado entry “inevitable”, says exec

The Australian avocado market made global headlines earlier this year reaching astronomical prices, and while the spike was no fluke it has made Australia appear to be a more attractive export destination.

The thought of Mexico knocking on the door for market access may be unpalatable for many local growers, but The Avolution director Antony Allen believes the industry has the wherewithal to make new opportunities when approval is granted to the Latin American country. avocado-on-toast-with-fetta-cheese-and-tomato-pexels-amy-wakley

“The Mexican application has been in for at least 10 years so it must be coming to the point where it would be actioned,” Allen tells www.freshfruitportal.com.

“It’s a matter of years, not decades now.”

He describes Mexico’s entry as “inevitable” and a kind of “double-edged sword” given the fact avocados can travel very well but would have a shortened shelf life arriving by sea from Mexico.

“You’re talking two to three weeks on a ship. The Mexicans are very good at exporting – they’re a clever, very professional industry with what I would argue are some of the most sophisticated packing sheds and marketing systems,” says Allen, who previously was CEO of Avocados Australia and president of the International Avocado Society.

“But in terms of the product when it lands, fruit age is the killer of avocado quality,” he says, emphasizing that for this reason the Australian industry only exports via airfreight in order to get the best quality outturn.

He adds once Mexican avocados arrive in Australia, the supply chain distance wouldn’t be very long but would still be challenging for the overseas-grown fruit.

“It’s just handling and temperature management. We’re not as good as we should be on our own product, but because it’s fresher it’s got more robustness.

“But once it’s been in a container for three weeks its ability to be left on the dock in the summer sun – and Mexico would be a summer product into Australia, not winter - that might make it even more difficult to manage the supply chain at the retail end.

He says the shelf life issue will be key for determining whether Mexican avocados can succeed in the Australian market.

“We know from all the consumer research that it is about delivering consistent quality, which means repeat purchases,” he says.

“We know that as soon as they get a bad experience, it’s four to six weeks before they come back again.”

He adds an inherent preference for locally grown product would also put pressure on Mexican competition.

“That’s potential, and that would probably drive the Mexican product to be as good as it possible can be. That’s what the market should do.

“That will depend on whether the price point is the same at retail – it’s not always the case that price points will be differentiated.

“Australian consumers will, from all the research I’ve seen, support Australian product but there’s a price at which that becomes not possible.”

Another issue will be the high cost of exporting to Australia from Mexico.

"It's a long way and the volume of general trade between the two countries means transport costs are very high," he says.

"Australian avocado volumes are set to increase significantly and this will put ongoing pricing pressures on the domestic market."

Australia’s participation in global avocado market growth

Allen makes these comments because he believes situations like an 80-year delay for allowing New Zealand apples simply cannot occur in an international marketplace where Australia too expects to participate.

“That’s not the world we live in, but it will be a challenge for Australian growers because their cost of production is so much higher than other parts of the world.

“They need to work on their quality, and so they need to differentiate their product to actually make it so they compete with a lower cost production country.

“Everybody has their competitive advantages, and if you’re able to leverage your competitive advantage effectively you’ve still got your place in the world, even if you are a high cost producer.”

He says for Australia this means building export markets overseas in places like India, the UAE, Indonesia and Vietnam.

“If we can drive demand further around the world, there won’t be enough avocados for Mexico to send here anyway,” he says.

“The New Zealanders are into India already and they’ve done a good job into that market – small scale but they really have a good market.

“India is a bit like dealing with 20 different countries with their state system – focusing on one and just being in a particular zone that’s got five times the amount of people that Australia has got is what they’ve done.”

While a great deal of focus has been placed on the potential of the Chinese market, and Allen agrees there are opportunities, he urges the sector not to lose sight of India’s potential either.

“Chinese cuisine is much trickier for something that’s savory and soft. That’s not to say it’s not possible, but it’s probably a bit more of a challenge from a Chinese perspective.

“In our house we have noodles with avocados and tuna on it all the time, so if they could get that to work it’d be great. That whole health position of avocados gives it that edge, but from a market perspective those two markets [China and India] are untapped.

“Even from a world perspective even if a small grammage per head happened, it will be a struggle to supply. It’s a careful balance not to go too fast, otherwise we’ll have an issue with supply.”

In contrast to China, Allen suspects soft avocados may actually be a very simple addition that could work very well in Indian cuisine; for example mixed with yogurt and eaten with raita.

“If they have avocados as part of that mix on a small scale as one of the options, I don’t think we’d ever be able to supply enough avocados to keep up with that. That’s the sort of simplistic addition that would be nice – healthy, about luxury of taste.”

He takes the Californian industry’s example of developing avocados in sushi as the perfect example of what the sector can try to emulate in India.

“They found something that it worked with and it made sense, and then it becomes more likely to be added,” Allen says.

“That’s what needs to happen across all of that zone [Asia]. You can’t expect them to go out and eat avocado with feta smashed on toast if that’s not in their cuisine.

The Avolution represents 27 packing sheds across Australia, sourcing product from around 120 growers. The goal is to always boost returns, but this does not mean the high prices seen earlier this year are good for the industry.

“There have been those challenging periods. You don’t want the price to go high; you want it to be stable and that’s part of the struggle of trying to manage where fruit comes from and how it works.

“It’s interesting that since then there’s been all this talk that avocados are a fad but it’s funny – that only happens when the price gets high and people become attuned to what they have to pay to get something they want.

“It’s not kale. It hasn’t happened in one or two years, it’s not instantaneous. It’s grown over the last 30 years in a very considered, regular way. That’s the difference between a fad and a consistent growth profile.”

Photo: Amy Wakley, via Pexels.com

www.freshfruitportal.com

Subscribe to our newsletter