Exports have long formed a part of the Lenswood Cold Stores Co-operative Society’s business, but new apple varieties, innovations in the packing shed and new relationships with overseas customers are helping to boost the iconic South Australian business’ profile on the world stage.
Even in the early days of the co-operative, soon after its inception in 1933, Lenswood exported crates of apples to the United Kingdom.
While exports have ebbed and flowed over the past 84 years, in recent times the co-operative has put considerable effort into building that side of the business and that effort is now starting to pay dividends.
Over the past five years, Lenswood’s exports have grown from one per cent of its business to eight per cent and, in line with the co-operative’s strategic plan, the aim is for that figure to reach 30 per cent by 2022.
“To grow exports is always going to be a challenge as there are factors outside of our control such as currency, climate, new varieties and getting the technical points right, but we see by 2022 when our new varieties really start to come online that we could have up to 30 per cent of our product being exported,” Lenswood Chief Executive Officer James Walters says.
There are a number of divisions within the co-operative: packing, marketing, sales, storage, exports, organics, the Lenswood Produce Company stand at the Adelaide Produce Markets, the Joint Venture Juicing Company at Monarto and Next Fruit Generation Australia (NFGA).
Lenswood currently packs about 20,000 tonnes of fruit annually and last year it exported more than 1,000 tonnes of fruit to markets around the world including the UK, Middle East, Thailand and Malaysia.
Pink Lady® apples are a substantial part of Lenswood’s exports with Joya®, Rockit™ and Granny Smith making up the remainder.
But it is the export potential of some new varieties the co-operative is commercialising as part of its NFGA division which presents the most excitement for James.
New kids on the block
NFGA was set up by Lenswood in 2013 and in 2016 it started commercialising three proprietary varieties – Rockit, RedLove™ and MiApple™.
“Rockit is a very unique miniature apple and is sold in a tube,” James says. “With that fruit and its packaging, we are challenging the true fast moving consumer goods (FMCG) category.
“We are trying to push the boundaries with fresh fruit which has its challenges, but last year it worked very well, particularly in the more populous cities of Australia, and we exported some of it into the Middle East through our master licensee, the Rockit Global Limited.”
MiApple is a similar apple to Royal Gala, albeit better yielding, better packing and comes into season earlier.
“It’s grower friendly, it’s pack house friendly and, most importantly, it meets consumers’ expectations by being a great eating experience,” says James. “It’s a very consistent eat and it can handle the warmer climate. It’s going to add value along the whole post-harvest chain.”
Then there is RedLove, a new internally red apple – one of the first of its kind in Australia.
“We’re doing brand development for RedLove through the home garden market, so it’s quite unique,” says James. “We are going to sell probably 30,000 trees over the next 12 months. It’s all part of our brand development focus and push.
“What we like about RedLove is that it’s not just a good fresh apple, but it is also an apple for homemade apple sauce, apple pies, cheese plates and other home cooking uses. It doesn’t go brown when you cut it. You can cut it and leave it out for two days and there’s nothing wrong with it. It is going to be a unique proposition.”
James believes these varieties will only help to boost Lenswood’s footprint on the world stage due to their unique nature. This is part of a broader strategy for the co-operative of not locking itself into the domestic market.
“Everything we produce has got to be for the domestic market but must also have export potential,” says James. “If there is no export potential for the variety then there’s no point looking at it.
“All of our markets are looking for new, innovative varieties like Rockit, MiApple and RedLove and we have a lot of excitement brewing around these varieties.
“We’ve had a good run on the domestic market and now we’re very excited about the export potential with them, especially with Rockit and MiApple.”
Growers on board
Most of Lenswood’s growers understand the need for exports due to the current glut of commodity varieties in the domestic market exceeding consumer demand and thus leading to lower returns for the grower.
James believes the longevity of the Australian apple industry lies in finding niche export markets so growers can receive a premium for what he says are some of the best apples in the world.
“The biggest challenge for the Australian industry is that we’re saturated with Pink Lady,” he says. “I think nearly 50 per cent of Australian production is Pink Lady and it’s not the most preferred apple for Asia.
“It does have its challenges but we’ve been able to find markets for it. It’s about making sure you understand the variety and pick it to the right specifications.
“Not every apple is suitable for export and that’s what people need to understand. Export is a tough market and the importers and customers we sell to have very high expectations because we do ask for a premium for our product, compared to what they can get from other countries.
“We have to be able to deliver on a superior piece of fruit. For growers who want to entertain export, they have to present their best fruit. There are no shortcuts.”
Between 75 and 80 per cent of Lenswood’s grower group are doing the required work to meet export standards. To help them meet these requirements, Lenswood employs two people in its technical team and enlists the help of other agronomists and consultants.
The co-operative also has a quality assurance (QA) manager who works with growers so they can meet the compliance and QA protocols for the European Union market.
Just as no two growing seasons are the same, so too are no two marketing seasons, James says. For this reason, Lenswood tries to program most of its export so it can gauge demand during the growing season and organise the appropriate number of bins for export.
“Export is a higher risk,” explains James. “There are slower payment terms and those sorts of things associated with it, but at the end of the day it could also be a higher return.
“For example, the protocols for the UK market are quite strict. We have to meet GlobalGap requirements and the packing shed has to be British Retail Consortium accredited, so meeting the customer requirement in the UK is quite tough and not every grower is up for that, but still most of our growers do all the required work for the UK market.”
The right equipment
To help cater for export demand, Lenswood invested almost $6 million in new packing equipment and building redevelopment.
This included a new pre-sizer built by French company MAF Agrobotics with capacity to process 24 tonnes per hour while also identifying internal and external deficits on the fruit and sorting it accordingly.
“The new pre-sizer gives us greater speed-to-market capacity for our early season varieties,” James says. “When we were exporting to the UK last year we could fill 50 shipping containers in only three weeks. There is no way previously we could have done that plus our existing domestic supply program.
“With this new equipment, we were able to entertain new business on the export front where windows or timeframes of shipping are restricted.
“When overseas markets say jump, it really is a case of us saying ‘how high’. You’ve just got to get the job done otherwise they’ll look at another country to get the fruit. In 2016, we were able to jump and meet their expectations.”
James says the co-operative has also been able to drop back to one shift because they are able to do all their packing in only eight hours.
Lenswood has had an ongoing relationship with MAF for eight years which James puts down to similar family values, integrity and innovation in developing new packing technology.
The co-operative is home to Australia’s only bio waxer, which gives an extremely shiny finish to every apple. Despite some major supermarket chains in Australia no longer buying waxed apples, James says that finish means they were able to achieve a premium for apples exported to Asia for growers.
While Lenswood has already forged itself a considerably great path overseas, James says there are plenty more growth opportunities for Australian apples abroad. He cites the United States as a significant area of potential export expansion, particularly for Lenswood’s new proprietary varieties.
Other parts of the EU as well as more of the Middle East and Indonesia are also potential growth areas.
“There’s no reason why those varieties we own here could not be sent into the northern hemisphere out of season,” explains James. “While it is a long game plan, that’s where we think our strategy will align itself at some stage.
“More work and market development opportunities lie in these areas for the Australian apple industry for those prepared to put the yards in and they are all markets Lenswood has invested in.”
But more opportunities also lie in existing markets, according to James.
“For example, what we’ve done in the UK is realise that it used to be a good hunting ground for our exports, so we’ve gone back and worked on old relationships and established some new ones,” he says. “We are understanding their requirements more and that way we’ve found a better window to ship our fruit.
“By shipping our fruit in bins we’ve managed to save some money here and for our customers at the other end and have a better product out-turn for them.
“Doing the research on the market, understanding the market and what the customer really requires means there’s better flow-through and we are reducing as many costs as we can along the way, adding value to both our customer and our grower.”
Something which could help the South Australian apple industry to get its foot in the door in some countries, particularly mainland China, is having the Adelaide Hills recognised as a pest-free area.
“Recognition of the Hills as a pest-free area could mean we have access to other countries once the accreditation is accepted by those countries,” James explains. “That would mean we can start exporting apples to China before other states on the mainland. It’s something we’ll hopefully have established over the next two to three years.”
Small dog, loud bark
The last five years has been a period of tremendous growth for Lenswood.
New proprietary varieties through NFGA and having trees planted nationally, the technology upgrades in the packing shed and the establishment of the Joint Venture Juicing Company, not to mention increasing exports, are all highlights.
While in many cases a co-operative structure can be a challenge to work with, James says it is to the grower members’ credit that Lenswood has been able to adapt to a changing marketplace and take advantage of new opportunities as they present.
“In everything we do as a co-operative, we’ve got to make sure we consider what the grower needs and what the market requirements are,” he says. “It’s a constant balancing act. It can be very challenging for management to deal with these things when you’ve got such a dynamic marketplace with innovation and change everywhere and a co-operative structure which, by its very nature, can be slow to react.
“But to the credit of Lenswood’s grower directors, for most opportunities we’ve been able to be reactive and take on the dynamic of the market, support management in the vision presented to them and help take the business to new levels.”
For Lenswood to be one of the largest apple exporters in Australia when it only makes up just under 10 per cent of Australia’s crop is also significant.
“That says a lot about the product and the people who grow it and work within the business to make these things happen,” James says. “We might be considered a small dog but we’ve got a very loud bark.”
Thank you to the team at Lenswood for helping in the preparation of this article and to Brenton Edwards of Stories Well Told for his photography.
This article has been prepared as part of the National apple and pear grower communications program that is delivered by APAL and funded by Hort Innovation using the apple and pear industry levy funds from growers and funds from the Australian Government.
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