CEO Report – end of 2017

When I started in this role, just over 12 months ago, the Board charged me with the responsibility of preparing a new strategy for the organisation. As an organisation, we sought to respond to the opportunities presented by the changing state of play, namely:

  • Levy funded projects are not a sustainable means of funding APAL’s activity.
  • APAL has no formal relationship with Hort Innovation to direct marketing activity.
  • Thanks to the income of the commercial business, APAL was in a good financial position, however there were opportunities to more strategically invest commercial income in industry-focussed initiatives.
  • There was a clear opportunity to share APAL capability and knowledge in brand management and international markets built through the Pink Lady® business, with industry.

For APAL to play a more productive and impactful role in our industry, we needed to make changes. These include:

  • Removal of the historical internal divisions in APAL between industry services and the Pink Lady® brand management business and replacement with a team-based operation with a shared focus on delivering measurable value for Australian growers.
  • Recruitment of staff with deep commercial skills, highly relevant experience and the capability to deliver the strategy.
  • An overhaul of the APAL financial systems and processes to provide, accurate and transparent reporting to management and the Board.
  • Changes initiated to the way APAL delivers Hort Innovation-funded projects with a focus on delivery of complete program outcomes for
    industry, rather than attempting to create an expert-driven agricultural/technical consulting business (which APAL is not).
  • Changed how APAL works with stakeholders in the Pink Lady® global business, to include a closer and more direct working relationship, taking full responsibility for the obligations that come with trademark ownership.
  • Integrating Coregeo Ltd (APAL’s UK subsidiary) to enhance our staff’s global marketing knowledge and capability.
  • A review of the APAL’s Prevar investment to ensure it is delivering value for Australian growers.
  • Bolstered APAL’s lobbying and advocacy capability by focussing on industry strategy priorities.

Whilst our long-term view of the industry is that branded apples and pears will dominate the markets and offer growers the best returns, in the short term, we see taking a more disciplined approach to the domestic market, and driving exports, as critical to improving grower returns. Our reliance on the domestic market to absorb and pay for our increasing production costs, and on a relatively small marketing investment to create demand, has proven to be ineffective.

The recently published Apple & Pear Industry Export Development Strategy prioritises export of branded varieties in seasonal windows, through a consolidated number of packers/exporters who are prepared to invest in these export markets. A successful export program will:

  • Relieve the supply pressure in the domestic market,
  • Strengthen our negotiating position both domestically and globally,
  • De-risk our businesses by diversifying our sales channels, and
  • Strengthen our position if/when we have import competition.

Growing the volume exported is absolutely fundamental to our future and all of us have an obligation to participate – we shouldn’t expect other growers or regions to export if we are not prepared to do the same.

APAL has a significant role to play in leading this activity within industry.

Our recent participation at the China Fruit and Vegetable Fair provided us with the opportunity to engage key Chinese government and non-government decision makers involved in making market access-related decisions. This is really timely for the apple industry as we’re
next in line for market access negotiations.

The learnings and commercial network we have developed in our global Pink Lady® business will be used to support all branded apple and pear exports and also to support exports of non-branded apples and pears.

Looking forward to 2018

I would like to thank those members who took the time to attend the stakeholder meeting and AGM on November 29 to share their thoughts and issues. We had good input from industry and will communicate back on the issues raised in the coming weeks.

We have just completed another interesting and informative round of spring Future Orchards® walks. Future Orchards continues to deliver practical
learning opportunities for growers to improve their practices and business profitability. Grower participation at orchard walks has continued to increase and this activity remains a core program for APAL.

I would like to thank you all for your patience while I assembled a team that can best serve you. On behalf of APAL I wish you a safe and happy Christmas with your families and we look forward to working with you as we work through the industry challenges and opportunities in 2018.

By |December 20th, 2017|CEO report|

About the Author:

CEO, Apple and Pear Australia Ltd
03 9329 3511