Amaz­ing adop­tion of av­o­ca­dos

Chi­nese con­sumers just can’t get enough av­o­ca­dos with their pop­u­lar­ity set to grow even fur­ther.

The Orchardist - - >>Avocado Conference - Story and pho­tos by Denise Landow

Few peo­ple un­der­stand the Chi­nese fresh fruit mar­ket as well as Loren Zhao, the co-founder of China’s largest on­line pro­duce re­tailer, Fruit­day.

He told the New Zealand Av­o­cado In­ter­na­tional In­dus­try Con­fer­ence that over the past five years, China’s adop­tion of av­o­ca­dos has been amaz­ing. The mar­ket in­creased 2000 per­cent from 2011 to 2017 with av­o­ca­dos now ex­tremely pop­u­lar. When Fruit­day launched in 2009, it chose to pro­mote two prod­ucts, cher­ries and av­o­ca­dos. To­day it sup­plies pre­mium fresh fruit to mil­lions of con­sumers in hun­dreds of cities across China and nine coun­tries. Loren makes fre­quent trips to New Zealand to source pre­mium fresh pro­duce for cus­tomers, in­clud­ing av­o­ca­dos. He works di­rectly with many NZ brands, such as Ze­spri. Fruit­day was the first com­pany to in­tro­duce Rockit ap­ples into China about four years ago, and the first to pro­mote or­ganic NZ prod­ucts.

Two years ago Fruit­day bought su­per­mar­ket chain, City Shop, which opened more chan­nels to sell fruit, in­clud­ing on­line. It has in­vest­ment from China’s sec­ond largest e-com­merce plat­form, JD.com, and sup­plies the e-com­merce gi­ant with fresh prod­ucts. Now Fruit­day is mov­ing from be­ing a re­tailer to be­com­ing a dis­trib­u­tor, and is build­ing of its first av­o­cado

wrap­ping room in Shang­hai.

Last year Mex­ico pro­duced a record-break­ing 1.99 mil­lion tonnes of av­o­ca­dos and ex­ported 8800t to China. Chile

“Now Fruit­day is mov­ing from be­ing a re­tailer to be­com­ing a dis­trib­u­tor, and is build­ing of its first av­o­cado wrap­ping room in Shang­hai.”

which en­tered the mar­ket in 2015 has be­come one of China’s largest av­o­cado sup­pli­ers with 16,700t sent there last year, a 44 per­cent in­crease from the pre­vi­ous year. Peru sent 6700t last year, an 88 per­cent in­crease on the pre­vi­ous sea­son. It has a big ad­van­tage with a long har­vest sea­son and so a mar­ket win­dow only it can sup­ply.

Loren said it was im­por­tant to fac­tor in tar­iffs, which is zero on av­o­ca­dos from Chile and Peru be­cause of a free-trade agree­ment, but Mex­i­can av­o­ca­dos still in­cur a seven per­cent charge.

“The good news for NZ av­o­ca­dos is the free trade agree­ment, and I be­lieve it will be zero,” he said.

The only other sup­plier is the United States.

“For Fruit­day cus­tomers that means hav­ing a 12-month avail­abil­ity of av­o­cado sup­ply,” he said.

“This is an­other rea­son why re­tail­ers and dis­trib­u­tors want to get in­volved with the av­o­cado busi­ness be­cause it’s easy to pro­mote.”

The main mar­kets for pro­duce are still through whole­salers as China is so large an on­line de­liv­ery ser­vices can’t ac­cess all the cities. Less than 40 per­cent of fruit stays in the largest cities but in Shang­hai, if peo­ple pur­chase on­line, prod­uct is de­liv­ered to cus­tomers’ homes in two hours from nearby shops. An av­o­cado’s look, size and colour are crit­i­cally im­por­tant to the Chi­nese with the favourite size in the mar­ket right now 30-35 count in 6kg trays. Whole­salers want green, smooth­skinned fruit with pit­ting or skin flaws be­ing un­ac­cept­able.

“We have to tar­get whole­salers – not just end cus­tomers.”

Six years ago the Chi­nese didn’t know how to ripen av­o­ca­dos or their op­ti­mum time for eat­ing, with Fruit­day’s re­search show­ing one out of ev­ery five was wasted. But last year with its re­tail­ers it pro­vided them ‘ready to eat’, try­ing to con­vince cus­tomers to buy dark av­o­ca­dos.

It was dif­fi­cult to ed­u­cate the mar­ket as cus­tomers felt dark av­o­ca­dos looked ugly, and so they didn’t have a pre­mium price at re­tail. And in the whole­sale mar­ket, dark fruit had to be sold for lower prices be­cause it had lim­ited shelf life.

An­other com­pany, Su­per­fresh, used coloured la­bels to show dif­fer­ent ma­tu­rity states, with 90 per­cent mean­ing the fruit is nearly ready to eat.

With ‘ready to eat’ a grow­ing trend in China at least 10 com­pa­nies are build­ing ripen­ing rooms for av­o­ca­dos. Pre­vi­ously, ba­nanas were used but it’s dan­ger­ous be­cause the process can’t be con­trolled, he said. In the fu­ture, pro­fes­sional sup­pli­ers of fruit-ripen­ing equip­ment are ex­pected to in­vent spe­cially-de­signed con­tain­ers which can be trans­ported any­where.

China did plant av­o­ca­dos 20 years ago but har­vest vol­umes are small and the va­ri­eties are not the pop­u­lar com­mer­cial types such as Hass. Of 500 hectares planted only 200t were picked, with an av­er­age har­vest of 500kg/ha com­pared with al­most 16t/ha from over­seas or­chards.

But a Cal­i­for­nian av­o­cado com­pany has an­nounced it will grow the crop in China’s South­west Yun­nan prov­ince, pro­vid­ing more do­mes­tic pro­duc­tion in the next five years.

“The good news for NZ av­o­ca­dos is the free trade agree­ment, and I be­lieve [tar­iffs] will be zero.”

NZ Av­o­cado’s work in an in­no­va­tive and dy­namic en­vi­ron­ment was fan­tas­tic, Prime Min­is­ter, Jacinda Ardern told the re­cent New Zealand Av­o­cado In­ter­na­tional In­dus­try Con­fer­ence.

“That’s why it’s so ex­cit­ing to be here be­cause the av­o­cado in­dus­try demon­strates the po­ten­tial in our hor­ti­cul­tural sec­tor,” she said.

She re­mem­bered a time when av­o­ca­dos were per­ceived by some to be a nov­elty, es­pe­cially on a restau­rant menu – “and now they’re be­ing blamed for mil­len­ni­als’ spend­ing habits”.

Her grand­par­ents were dairy farm­ers but bought their first or­chard in Mor­rinsville in the 1980s where they grew nashi pears. When her par­ents bought that or­chard when she was at pri­mary school, her job was to pro­tect the fruit from birds.

Her grand­par­ents then went into ki­wifruit be­fore buy­ing an av­o­cado or­chard at Wel­come Bay, Tau­ranga and she re­mem­bered walk­ing through the trees, pick­ing up av­o­ca­dos from the ground for lunch.

“But I also knew that it was hard work for them, and for those who con­tinue in that field and are tak­ing, what is for me, a nos­tal­gic prod­uct to the world.”

She said the av­o­cado in­dus­try was im­por­tant to NZ as the coun­try’s third largest fresh fruit ex­port. In world terms, NZ is the sixth-largest ex­porter of av­o­ca­dos, topped only by Mex­ico, Peru, Chile, the Euro­pean Union and the United States.

“Not only is the av­o­cado in­dus­try im­por­tant to our na­tional econ­omy, it’s par­tic­u­larly im­por­tant for our re­gions, and the ones that we as a Govern­ment are fo­cused on, in­clud­ing the Bay of Plenty and North­land,” she said.

The in­dus­try’s value to the coun­try was set to reach $500 mil­lion by 2040 and ac­cord­ing to in­dus­try es­ti­mates, global de­mand for the fruit was in­creas­ing by 10 per­cent an­nu­ally.

They were in­creas­ingly be­ing recog­nised as part of a healthy, nu­tri­tious diet.

“In fact, New York now has its own av­o­cado bar where av­o­cado is in ev­ery sin­gle item on the menu.”

And she felt it was only a mat­ter of time be­fore Auck­land could have a sim­i­lar type of eatery.

There was also in­creas­ing in­ter­est shown from Asian coun­tries. In Jan­uary, new mar­ket ac­cess into China for NZ av­o­ca­dos was a huge mile­stone as it was one of only four coun­tries with ac­cess. Its to­tal av­o­cado im­ports were grow­ing rapidly from un­der $1 mil­lion a year in 2012, to nearly $150m in 2017.

The re­cently signed Com­pre­hen­sive and Pro­gres­sive agree­ment for Trans-Pa­cific Part­ner­ship (CPTPP) could also bring new trade op­por­tu­ni­ties which NZ could tap into. But

“Not only is the av­o­cado in­dus­try im­por­tant to our na­tional econ­omy, it’s par­tic­u­larly im­por­tant for our re­gions… in­clud­ing the Bay of Plenty and North­land.”

Ardern warned there were chal­lenges to over­come. Ex­port vol­umes and val­ues were still driven by swings in the ir­reg­u­lar­bear­ing pat­tern of av­o­ca­dos, with the sea­son to June be­ing a low-bearing year which saw ex­port vol­umes only half those of the pre­vi­ous record sea­son.

A par­tial re­cov­ery is fore­cast for the 2019 year, with po­ten­tial for an­other high pro­duc­tion sea­son the fol­low­ing year. The ir­reg­u­lar fruit-bearing cy­cle of pro­duc­tion makes it dif­fi­cult to de­velop mar­kets but she said she un­der­stood steps were be­ing taken to re­duce this. Th­ese in­clude the ex­pan­sion of North­land plant­ings where ir­reg­u­lar- bearing pat­terns are not so great be­cause of its cli­mate. More in­vest­ment and re­search into va­ri­eties and man­age­ment tech­niques would help.

There were also many other ways the in­dus­try was striv­ing to add value, in­clud­ing pro­duc­tion of av­o­cado oil, im­prov­ing the qual­ity of re­tail fresh­ness by in­vest­ing in cool chain in­fra­struc­ture and cap­tur­ing in­creas­ing mar­ket de­mand by ex­tend­ing the grow­ing sea­son.

As a re­sult of the 2014 Pri­mary Growth Part­ner­ship with Govern­ment, NZ Av­o­ca­dos Go Global, the in­dus­try had seen best per­form­ing or­chards grow with the ma­jor­ity of them chang­ing their prac­tices as the new in­for­ma­tion be­came avail­able, which Ardern de­scribed as a step change in the way the in­dus­try op­er­ated. An­other pro­gramme led by Plant & Food Re­search and funded by the Min­istry of Busi­ness, In­no­va­tion and Em­ploy­ment (MBIE), Av­o­ca­dos for Ex­port, aims to iden­tify the trig­gers for ir­reg­u­lar-bearing at re­gional and or­chard lev­els. And the Sus­tain­able Food and Fi­bres Fu­tures Pro­gramme launched in Au­gust would be ac­cept­ing in­vest­ment ap­pli­ca­tions from Oc­to­ber.

“We need to work with you to help all of us move to a smarter, more in­no­va­tive space,” she said.

“I know there needs to be more col­lab­o­ra­tion in the ar­eas of sus­tain­abil­ity, sup­ply chains and build­ing on-or­chard man­age­ment ca­pa­bil­ity, and we’re open to dis­cussing all of those things with you.

“Thanks for the work you are do­ing, the in­no­va­tion that you’re show­ing, and the fact you are lift­ing New Zealand’s brand as the best, most ef­fi­cient, most sus­tain­able grow­ers in the world.

“We’ve a lot to be proud of and it comes down to a lot of you here to­day.”

The ex­hibitorsʼ area was packed with all things av­o­cado.Av­o­ca­dos ʻa plen­tyʼ at the con­fer­ence ex­hi­bi­tion stands.Loren Zhao, co-founder of Chi­nese on­line fruit re­tailer, Fruit­day.com

Prime Min­is­ter Jacinda Adern shared spe­cial mem­o­ries.At the Oli­vado stand, from left; An­drea Dick­in­son, Pip Llewellyn and Ge­or­gia Smith.NZ Avo­cadoʼs stand was al­ways busy.

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