Global growth in demand for avocado and mangoes has been consistently increasing, rising 10% per annum in some instances. However continuous promotion and consumer education campaigns are essential to ensure the exponential growth of the crop has a stable, profitable market going forward.
Speakers at this year’s annual Subtrop Marketing Symposium held in White River, Mpumalanga, said that although market growth has been high, there is still further room for expansion provided promotions are correctly aimed at consumers.
Greg Vicherat, European Business Development Manager at Halls, noted that in 2018 globally traded avocados reached 1,9 million tons, up 11% from the previous year. “The European Union (EU) broke through the 1kg per annum per capita consumption and the United States (US) avocado breakfast market alone reached $65 billion. At this rate we would need an additional 190 000 tons of avocados per year to meet demand world-wide.”
He said that while consumption per capita in China is still low, it had the potential to become the largest avocado market in the world if promotional activities were geared up.
With the bumper crop that was experienced globally in 2018, prices were consequently suppressed, but Zac Bard, chairman of the World Avocado Organisation (WAO), noted that the current campaigns aimed at increasing avocado consumption, resulted in good returns to growers. “The priority for 2019 will be to ensure there are no bottle necks in future that would impact prices if we should be in an over-supply situation again.” WAO planned on the first promotions in the Chinese market, which would grow demand in this young market.
Trevor Dukes, South Africa’s representative of the WAO, added that future campaigns included a focus on the younger generation to grow the market base from a young age.
A marketing campaign conducted locally, tested avocado’s suitability and likeability when paired with South Africa’s most popular street food – magwinya or vetkoek. While there was an overwhelmingly favourable response to avocado magwinya, what was interesting was that 20% of the buyers were children of school going age. “We have an opportunity to instil new eating habits and develop a love for avocados from a young age, which offers great potential to grow this market in the future,” said Ruth Behr, owner of Promofresh.
Glynnis Branthwaite, from Protactic Strategic Communications noted that it was important to understand the purchasing habits of consumers, to accurately aim marketing campaigns to increase avocado consumption. “We need to change the consumers’ mindset from wanting an avocado to needing an avocado. There is also still much needed education on dark versus green skin fruit as consumers still perceive dark skin-types as overripe.”
In a survey to determine dietitians’ perceptions and likelihood of recommending inclusion of avocados in a healthy diet, it was found that over 97% would recommend it to their patients. Monique Piderit, registered dietitian from Nutritional Solutions noted that those that are not recommending avocados were deterred by the often high prices.
The biggest reasons dietitians were recommending avocados was for management of cardiovascular disease, weight loss and type 2 diabetes.
Focusing on market access, Derek Donkin, CEO of Subtrop, said that gaining and maintaining market access for South Africa’s litchis, mangoes and avocados was one of the biggest focus areas going forward. “This includes cultivar development to ensure we have the right varieties for specific markets, adhering to phytosanitary requirements and maximum residue levels (MRL’s) in our export markets. The latter two are especially becoming more stringent and non-compliance could cost us existing markets.”
He noted that gaining access to new markets was a notoriously slow process, taking on average 15 years. “We are expecting some progress on the US and Chinese markets next year to enable avocado and mango exports to those countries. These are currently the two countries that hold the biggest potential for our produce.”
While export markets were needed in peak season for mangoes when there was an oversupply in the market, Pieter Buys, SA Mango Growers’ Association chairman, noted that the local industry was for the most part more profitable than export markets. “International prices are not necessarily more lucrative especially when you consider the cost to export and market the product in those countries. In India the price can be as little as $0,60/kg and in China $1/kg.”
Buys is positive about the outlook for mangoes and expects demand to grow globally, especially considering the versatility of mangoes. “Available land for planting more mangoes is however limited and since demand is expected to increase, prices will follow the same upward trend.”
With regards to emerging markets, Jurie Welman, President CHEP SSA & Automotive Europe, India, Middle East Africa (EIMEA), said that they held much potential for exports, but a lack of protocols in place for fresh produce made border crossings problematic. “There is also a greater need for packaging that could aid in keeping produce fresher for longer and limit bruising. Packaging that was more robust and could withstand long journeys was crucial.”
Delegates at the symposium were given an overview of the expected political and economic climate for 2019.
Standard Bank economist Shireen Darmalingam, predicted the exchange rate to end at R14,30/$1 this year and at R13,40/$1 in 2019. “The emerging market rout is likely to continue in the near term. Disputes between China and the US will keep going back and forth – which doesn’t bode well for local financial markets.”
David Ansara, a policy analyst from the Centre for Risk Analysis, said that uncertainty around property rights is contributing to lower investment and higher unemployment in the agricultural sector. “Job creation is a by-product of investment. Creating a more conducive policy environment for agriculture to succeed will lead to higher levels of employment and give farmers the confidence to invest,” he said.
Front row – L – R: Ruth Behr owner of Promofresh; Glynnis Branthwaite, founder of Protactic Strategic Communications; Shireen Darmalingam, Standard Bank economist; Monique Piderit, registered dietitian from Nutritional Solutions
Back row – L – R: David Ansara, a policy analyst from the Centre for Risk Analysis; Pieter Buys, South African Mango Growers’ Association chairman; Greg Vicherat of Halls; Derek Donkin CEO of Subtrop