Apple and pear exports of 10 per cent of production are achievable within a decade according to the ambitious new Apple & Pear Industry Export Development Strategy released this week.
Key to achieving this goal will be a focus on high-value varieties, targeted at niche and neighbouring markets and seasonal opportunities through programmed, ongoing sales contracts managed by collaborative and globally-competitive export supply chains.
This will be underpinned by a series of programs and strategies to boost grower knowledge of export requirements, encourage establishment of supply networks, grow exporter capability, infrastructure and logistics, target marketing in priority markets, conduct trade missions and establish systems delivering robust commercial trade intelligence.
Apple and Pear Australia (APAL) chief executive Phil Turnbull welcomed the release of the strategy and said it set forward a clear road map to driving export growth and industry profitability.
“Boosting exports is a key priority in reducing industry risk related to our heavy reliance on the domestic market” he said. “This is an industry-developed strategy with a clear outcome-focused approach and we look forward to working with growers on putting it into action.”
The initial five-year strategy developed by Melbourne-based consultants McKinna et al in consultation with industry, and funded by Hort Innovation using the apple and pear levy and funds from the Australian Government, maps and prioritises a range of markets from ‘prime prospects’ to ‘low priority’ and sets forth a road map for capturing them.
It identifies six strategy platforms to strengthen export competitiveness:
- Building integrated export chains
- Investing in brand-based marketing in prime prospect markets
- Growing opportunistic trade
- Developing targeted product strategies for priority markets
- Establishing prioritized market access plans
- Improving market intelligence.
In the short term, export targets have been set at exporting 15,000 tonnes of apples (nearly treble the 5136t exported in 2016) and 12,000t of pears (up from 9820t in 2016) by 2020.
The report stresses that to reach the longer-term target of exporting 10pc of marketable yield by 2027 will require “cultural shift and significant investment” as the industry repositions itself from opportunistic price takers to strategic exporters.
Boosting exports is a key industry priority and viewed as critical to maintaining grower sustainability at a time when falling per capita domestic consumption and new plantings of higher yielding varieties boosting overall production are combining to put downward pressure on domestic prices.
Although historically an export-oriented sector, rising domestic prices, high labour costs and a high Australian dollar have all combined to make Australian apple and pear exports uncompetitive and the industry domestic-focused.
Exports have fallen from around 30pc of production in the 1980s to just 1pc of apple production and 6pc of pear production in 2016.
The report found a large proportion of exports were “opportunistic”, sourced by consolidators in wholesale markets in narrow seasonal windows or to fill a shortfall in supply rather than a planned export program.
The export approach was fragmented and the culture of the industry one of a ‘reactive price taker’ rather than a ‘proactive market developer’ the authors said.
“Industry must learn how contemporary export supply chains function and rebuild an export culture.
“Although opportunistic trade will always be part of the export mix, Australian growers must place more focus on programmed, ongoing sales contracts.”
To do this, the report proposes an export strategy that focusses on helping industry to build globally competitive supply chains that will create opportunities for contract growers and alliance partners as well as the exporters themselves.
The emphasis is on a unified, collaborative and coordinated, industry-wide approach
It advocates a ‘contemporary export model’, embracing a more integrated approach with large, coordinated supply chains, supported by a network of export-capable growers and packhouses all linked together by strategic supply agreements.
The report highlights Australia’s competitive advantages including:
- Geographical location allowing Australian growers to fill seasonal shoulders other countries cannot
- Close proximity to Asian and Middle Eastern markets
- Reputation for high quality product “clean green image”
- Ability to produce ultra-premium product
- Ability to leverage other export fruit trading relationships/arrangements.
It highlights that the development of globally-competitive export supply chains is critical for the export success of the Australian apple and pear industry.
Wider industry participation in consolidated, globally-competitive export supply chains is to be achieved by:
- Including small growers in collaborative strategic alliances
- Encouraging growers of some scale to form alliances with exporters
- Providing Future Orchards® programs on export QA systems and growing for export.
The report identifies the growth in managed varieties, with their premium product, assured eating quality, marketable ‘brand’ and world-wide networks as a significant export opportunity.
While pear exports have been on an upward trend in recent years, the report says there are further opportunities for blush pears which will arise from better aligning exports to demand from Asian markets for coloured varieties over the traditional European Williams and Packham varieties.
Other areas for attention include developing
- Integrated supply chain capability
- Long term trade relationships
- In country trade and consumer research
- Market tailored product and packaging
- Clear understanding of export supply chains, and their importance
- Infrastructure and logistics
- Establishment of a voluntary export QA scheme and code of practice
The report proposes the establishment of exporter forums – one for apples and one for pears – and the establishment of two export advisory panels (one each for apples and pears) to oversee the export marketing strategies.
A copy of the Apple & Pear Industry Export Development Strategy is available to apple and pear levy payers by contacting Alison Barber at APAL.