South Africa is in the process of emerging from a dry summer with little rainfall, which may not have been conducive to producing a bumper avocado crop, but has certainly been a boon as far as fruit quality is concerned. This year’s estimated export crop is pegged at 9.5 million 4kg cartons, roughly in line with last year’s volumes. “This is by no means a bumper crop - some years, quantities have been as high as 12m cartons,” says Derek Donkin, ceo of the Sub-Tropical Growers’ Association, which comprises the South African Avocado Growers’ Association (SAAGA) and three other producer organisations.
“Production was slightly limited again this year by a bout of dry weather during the growing period, but there are still sufficient levels of product to meet market demand, and there has been some rainfall in the last few weeks which should help ensure a good crop is pushed through,” he continues.
But the arid conditions have meant that threat from disease was minimal, and fruit is set to be in good shape, according to SAAGA chairman Don Westcott, who started as a field officer at the association in 1988 and is also a small grower. Production is centred in three main regions - Limpopo in the north of the country, Mpumalanga in the east (both of which are earlier growing regions) and, further south, KwaZulu-Natal. Late-season fruit tends to arrive from the latter province, although mountainous regions in Limpopo and Mpumalanga also yield some produce further into the year.
HL Hall will export in the region of 1.8m cartons this season from South Africa, sourcing from its 430 hectares of avocado farms in the Mpumalanga province as well as other suppliers from across South Africa. Around 50 per cent of this will be sent to the UK. “We have just come out of a bumper season from Israel, whose crop was in the region of 90,000 tonnes,” says director in the UK Paul Devlin.
Halls first sent product to the UK in week 14, although only in limited volumes. “Many South African exporters have been monitoring this market due to the large volumes still available from Israel,” explains Devlin.
Shipments of green-skinned varieties, mainly the Fuerte cultivar, have already begun to arrive in the UK and Europe in limited volumes, and will continue through to early October. Volumes of Hass will kick off in two weeks’ time and peak supply of all varieties will fall between May and July. Supplies to Europe are expected to be split roughly 50:50 between Hass and green-skinned varieties, and around a third of volumes slated for export will end up in the UK, which continues to be the largest single country market for South African avocados. A large proportion is sent to Holland and then redistributed around Europe.
“South African exporters have had relationships with UK importers for many years now, and our guys see it as a stable market for prices, unlike other countries, such as France, which can be far more volatile. The UK is also a market in which the time and money ploughed into promotions, which SAAGA has organised over here for 13 years now, have definitely paid off,” explains Westcott.
The UK avocado market saw an eight per cent value increase in sales during the 2006 season, according to TNS data for the week ending August 16, 2006, while household penetration grew from 23.8 per cent to 26 per cent.
This year, SAAGA’s campaign will return to a more integrated approach. “When the promotion originally started we worked on a combination of in-store campaigns and media coverage, but then activities took much more of a media slant, with appearances in national and weekly consumer newspapers, regional press, radio and online portals,” says Donkin. “This year, we are returning to our original approach, maintaining a high level of consumer media coverage but also organising in-store tasting sessions, which will be centred in late June and July to coincide with the peak of the season.”
Recipe production and photography are other key elements of the campaign, and the Healthy Avocado booklet, which was produced in 2006, will continue to secure consumer magazine and newspaper coverage. “It will be available in-store at South African avocado samplings and also online at our consumer website,” says Donkin.
No consumer campaign these days is worth its salt without the backing of a celebrity chef or fitness guru, and SAAGA’s is no exception. Nicky Hambleton-Jones, South African-born nutritionist and presenter of television show 10 Years Younger, will throw her weight behind this year’s activities, appearing in supplements with different magazines including She and Top Santé and acting as the face of Summer Avocado Month in July.
“Growers felt we needed to diversify the campaign’s approach this year, hence SAAGA’s decision to incorporate in-store activities into the promotion once again,” explains Donkin. “We always work with the retailers anyway, and in fact last year two of them, Sainsbury’s and Waitrose, featured South African avocados in their television adverts during the peak of our season, which really helped boost penetration.”
“Price promotions have certainly helped to draw new consumers to the category, but educating consumers as to the health and nutritional benefits of avocados is of key importance,” says Devlin. “We have seen significant growth in UK retail programmes over the last few years and demand is still on the up. Over 15m people now eat avocados in the UK, where the market is valued at approximately £47.5m.”
A further boost to the category has been the advent of celebrity chefs like Jamie Oliver actively using the fruit on television, and nutritional gurus such as Gillian McKeith highlighting the health benefits of the fruit, according to Mike Lister of importer Topgro. The company will be bringing in some two to three containers a week of South African supplies, and is expecting the first arrival on May 15.
“We operate fixed programmes with Tesco in the UK and supply Tesco in Ireland through Keelings, so volumes will be fairly steady throughout the season,” says Lister.
Topgro is 50 per cent owned by South African grower association Afrupro, which supplies the firm directly from its own farms.
“Avocados are certainly a growing category in the UK,” Lister explains. “When you consider that average consumption here stands at 250g per capita per year, as opposed to 2.5kg per person annually in France, where perhaps it might be fair to say that consumers tend to be more adventurous in their tastes and savvy with fresh produce, it is clear there is enormous potential to grow sales [in the UK]. A key element of boosting purchases is to teach people how to handle avocados, and we are working with the SAAGA campaign to achieve this.”
There is certainly a trend towards Hass in the UK, whilst in France, Italy, Holland, Spain and Germany, green-skinned varieties are more popular. “Some UK supermarkets even operate a ‘Hass only’ policy,” says Devlin. “The variety is available 12 months of the year, is fairly easy to procure and is more robust than other fruits, as well as being more predictable in terms of when it is ripening. Many top retailers also sell green-skinned cultivars such as Fuerte, Pinkerton and Ryan, but it is the UK foodservice and wholesale sectors that mainly concern themselves with these varieties.”
And Lister agrees. “UK retailers predominantly demand Hass, mainly because that is the variety that consumers recognise as a traditional avocado,” he says.
Logistical innovations have had a huge impact on the industry in recent years, according to Westcott. “We can now offer two sailings a week to Europe, to Tilbury in the UK and Rotterdam, as well as less frequent deliveries to Lisbon. For the last 10 years, an avocado train has also operated in production regions for 10-15 weeks of the season, running straight from the packhouses to the port, which maintains the cold chain for as long as possible and helps keep product fresh upon arrival.”
Since October 1, 2006, SAAGA has fallen under the new umbrella of the Sub-Tropical Growers’ Association, which also covers avocados, mangoes, lychees and macadamia nuts. SAAGA itself comprises 420 large- and small-scale members.
“Our growers are not just into making a quick buck,” says Donkin. “They are committed to providing a consistent supply and helping grow the avocado category.”
SAAGA and individual exporters are ploughing money into variety research, with particular emphasis on extending the season, improving eating quality, boosting yield and developing cultivars with higher disease resistance. But Westcott is quick to point out that the process is a lengthy one. “It can take 15-20 years from conception to marketing for avocado varieties, because it is a tree crop,” he says.
Reducing pesticide usage is another key element of the research. “We are committed to ensuring quality while not impacting negatively on the environment,” says Westcott. “SAAGA is very aware of the growing interest in the impact farming and exporting of fruit has on the environment. While organic and Fairtrade avocados remain niche sectors for South African growers, SAAGA has always encouraged its members to farm in the most environmentally friendly way, including using fewer pesticides.”
Around 500,000-700,000 export cartons are certified organic, roughly seven per cent of overall shipments. “Demand for organic product has been phenomenal,” says Westcott. “However, growers are limited in what they can supply, as the product is hard to grow and combating fungal disease is tough. At the moment, only three export firms handle organics.”
Halls offers Fairtrade-certified avocados from its farms from April to September, and, according to Devlin, this is a particular niche progressing well in the UK. A growing percentage of consumers are now looking to buy either organic or Fairtrade produce, be it for health or moral reasons, and Devlin believes this sector offers enormous potential for the future. “I also feel that South Africa is the preferred avocado origin for many retailers,” he explains.
South African avocados traditionally find themselves head to head with Kenyan and Peruvian product, as well as some late fruit from Israel and Spain at the start of the season and early fruit from Chile towards the end of the campaign. “SAAGA organises regular meetings with exporters and distributes information to all key industry players regarding production so that they can construct their export plans accordingly,” says Donkin. “There is integration along the chain, a sharing of common interest and a strong sense of communication.”
However, the global avocado industry enjoys a level of organised co-operation rarely found in the fresh produce trade. Key global players convene twice a year, once at Fruit Logistica in February, just prior to the kick-off of the South African, Kenyan and Peruvian seasons, and then again in October to coincide with the start of sendings from Chile, Israel, Spain and Mexico.
“We work closely with other grower associations around the world, as it makes sense if we can together grow the whole avocado category,” says Donkin. “If we all boost sales and increase our crop, then looking at the bigger picture it is a bonus for everybody. We know from past experience that the market can collapse, and driving international communication as SAAGA has done is one way to combat this. It’s all about building up trust and key partnerships.”
This international harmony has had a positive impact on the market over the last three to four years, according to Donkin, and both sales and volumes have risen significantly.
So what comes next for the sector? “Demand in Europe and the UK for our avocados is certainly growing,” says Westcott. “There is a strong move on the ground in South Africa to organic, natural farming, including better pest control, along with ongoing technical research to produce avocados offering better quality and shelf life.
“Essentially, SAAGA wants to ensure that our industry has a safe, sustainable future, while also tapping into unexplored potential for further growth,” he adds.
WESTFALIA VOLUMES ON THE RISE
Avocado specialist Westfalia is expecting to increase its volumes of South African avocados this year, largely as a result of improved crop management, but also due to a rise in the number of growers that have come under the Westfalia umbrella over the past few months.
“We expect to export around 40 per cent of the South African industry’s volumes in 2007,” says Simon Curry, marketing manager for Westfalia Marketing UK.
Early greenskins from South Africa arrived in late March, and supplies are expected to continue until late in October. Westfalia UK is already selling organic and conventional volumes of Fuerte, and will start with both conventional and organic South African Hass supplies in early May.
Westfalia’s main production areas are based in the Tzaneen region of Limpopo province, situated in the north east of the country, sourcing produce from the 1,200 hectares of its own avocado farms and from a further 800ha from other supply partners in South Africa.
“There appears to be a small movement away from Hass dominating the retail sector, with an increasing number of supermarkets stocking greenskins on a regular basis,” explains Curry. “Similarly, the wholesale sector, which has traditionally favoured greenskins, is now showing a slowly growing interest in Hass, namely on behalf of the foodservice industry.”
Because each variety has its own distinctive characteristics and market niches, much effort is being made by Westfalia Technological Services, one of the world’s leading avocado research bodies, to develop new varieties to suit the ever-evolving market. “There are some exciting new cultivars down the line now, which we believe could well become the sought-after varieties of the future,” says Curry.
Westfalia has been Fairtrade-accredited for four years now, and Westfalia UK is in the unique position of having an extensive Fairtrade offer during the South African season, but increasingly outside this period as well, according to Curry. “Fairtrade is not only a sought-after component of our product range, but is also extremely beneficial to our employees.
“Through our alliances with global suppliers, we now offer a year-round supply of green-skinned varieties and Hass,” Curry adds. “Several years ago, Westfalia UK recognised the need to expand its avocado supply to meet increased demand in this market, as well as offer its customers fruit year-round. These new supply partners now constitute an important part of our avocado business.”
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