Cool climate avocados secure niche market with big reputation

Rabobank expects the avocado market will become increasingly competitive as producers will need to become more efficient and improve sustainability to keep up with public demand.

The report, Global Avocado Growth Far From Over, detailed that global avocado production expanded a compound annual growth rate (CAGR) of about 7 per cent over the past 10 years, whilst over the same period Australia's production grew by 9pc.

The report identified a 35pc rise of avocado exports in 2022, with more than 11,000 metric tonnes recorded.

Rabobank associate analyst, Pia Piggott, said Australia's key export regions were evident of this, as Australian market share increased in Singapore to 73pc and Malaysia to 62pc.

"The weaker Australian dollar also supported Australia's competitiveness against its peers, with prices rising 6pc to a FOB (free on board) export price of AUD 5.02 per kilogram," Ms Piggot said.

She said export market growth came at a time when the Australian industry experienced an oversupply and domestic retail prices in 2022 averaged AUD 1.61 a piece, 32pc below the five-year average.

"The Australian avocado industry has been experiencing a period of volatility as it learns to cope with the growing pains of increased supply in the market," she said.

"However prices have since come down, coinciding with the beginning of the Shepard variety avocado season, and, with the Hass season beginning again this month, we expect increases in supply to further weigh on domestic prices."

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Peninsula Avocados owner, Steve Marshall, has worked more than 30 years to farm avocados in an unusually cooler climate for the fruit, along the Mornington Peninsula, Victoria.

Although he doesn't export the produce, Peninsula Avocados holds a niche market around Melbourne and demand continues to rise due to its fruit's rich flavour profile and creamy texture.

"We are very different to the normal Queensland grower, because we're out of their season and we fill a very niche little spot into the Melbourne market, we're not big enough to export but we're putting a lot of effort into it," Mr Marshall said.

"[Our avocados] hang on the trees for longer creating a higher oil content and it allows for greater development of flavours and oil content in the fruit and from a nutritional point of view they're often referred to as nature's vitamin pill and when you see a breakdown of what's in them they're pretty darn healthy.

"With a lot of the Rabobank reports, there's been huge investment into the industry; you've really seen the corporatisation of the avocado industry with a lot of Queensland growers with sons and families who didn't want to continue and usually it sells to a company with big financial backing that keeps getting bigger and bigger."

Being a small scale farm for the avocado industry, but large for their geographical location on the Peninsula, Mr Marshall said most of his fruit ends up in Melbourne.

"It goes mostly through one agent and some greengrocers in Melbourne and a buyer in Tasmania who knows the quality of our fruit," he said.

Peninsula Avocados has now become a brand in itself as it continues to build, and Mr Marshall said the company is able to grow in cooler regions over a longer period of time.

"Avocados don't like frost, the Peninsula has water on three sides so it's very unique and we generally don't have sub zero temperatures in winter," he said.

"There's a fair few frost-free zones down here and it allows us to get a foot in the door to keep the trees alive and we have different crops on trees for a period of time.

"You have to manage the two crops, flower in November but generally don't pick till February, so that's 15 months old, even up to 18 months old, which is dependent on markets and available labour."

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