2. Organisation of the industry
2.1 The South African Avocado Growers’ Association
2.2 Quality standards and food safety
3. Export logistics
4. Generic promotion
5. Current trends in the industry
5.1 Integrated fruit production
5.2. Consolidation within the industry
5.3 Growth in the South African market
5.5 New markets
5.6 Cultivar development
South African Subtropical Growers’ Association, PO Box 866, Tzaneen, 0850
The South African Avocado industry consists of 12 000 ha of commercial avocado orchards, the majority of which are situated in the North Eastern part of the country in the Limpopo and Mpumalanga provinces. Avocados are also grown commercially in certain areas of KwaZulu-Natal Province. Annual production is the region of 90 000 t, of which approximately 40 000 t is exported the Europe and the United Kingdom. The remainder of the crop is consumed domestically and approximately 10% is processed (oil and purée). The South African Avocado Growers’ Association (SAAGA) has a voluntary membership accounting for 85% of export production. The aim of the association is to improve the profitability and sustain the viability of growing avocados in South Africa. SAAGA’s activities are funded by its members and include technical research, extension services, generic promotion to develop the local and export market, and the provision of marketing information. Generic promotion is based on public relations techniques and accounts for 45% of SAAGA’s budget. Current trends in the industry include consolidation within the export business, private cultivar development, integrated fruit production, processing, growth of the South African market and efforts to access new markets.
Avocado, South Africa, Trends, Generic Promotion
Avocado production in South Africa is concentrated mainly in the warm subtropical areas of the Limpopo and Mpumalanga provinces in the North East of the country between latitudes 22 o S and 25 o S. Annual rainfall in most of these areas is high (> 1000 mm p.a.), but there are some orchards in semi-arid regions with rainfall of± 400 mm p.a. Approximately 8% of commercial avocado orchards are in KwaZulu-Natal province where the conditions are cooler due to the more southerly latitude (± 30 o S).
The South African Avocado season extends from mid-March to September. Due to climatic variability between growing regions, most of the major cultivars are available over an extended period during the season. For example, ‘Fuerte’ is harvested from mid-March to May in the northern regions, and is harvested in July and August in KwaZulu-Natal.
The avocado industry in South Africa expanded steadily in from the early 1970s to 2003, with plantings of ±2000 ha in 1970 increasing to ±12 000 ha in 2003. Growth in plantings, however, has slowed since 2003 with total area planted to commercial avocado orchards remaining stable at around 12 000 ha. ‘Hass’ and ‘Fuerte’ are the major cultivars each accounting for 37% of the area under avocados. Details of cultivar composition are provided in Fig. 1. Due to the European Market’s preference for ‘Hass’ less ‘Fuerte’ has been planted than ‘Hass’ in recent years, and in many cases ‘Fuerte’ orchards have been re-planted to ‘Hass’.
Approximately 70% of the trees produced by avocado nurseries are ‘Hass’ and the remaining 30% is comprised mostly of ‘Fuerte’, ‘Ryan’ and ‘Pinkerton’. Avocado nurseries are currently producing ca. 110 000 trees p.a. These trees are mainly being used to replace old orchards, but there are also some completely new orchards being planted.
Fig. 1 Cultivar composition (by area planted) of the South African avocado industry. (Total area planted = 12 000 ha).
High summer rainfall (> 1000 mm p.a. in most areas), and warm temperatures contribute to the incidence of root rot caused by Phytophthora cinnamomi. This disease is effectively controlled through phosphorous acid trunk injections integrated with practices that promote root health, such as the addition of compost and mulches. The majority of plantings since the early 1980s have been on Phytophthora- tolerant rootstocks such as ‘Duke 7’, and in recent years a growing number of trees on the rootstock ‘Merensky II (Dusa®) have been planted. Approximately 60% of current nursery trees are on ‘Merensky II’. Other commonly used rootstocks include ‘Duke 7’, ‘Bounty’, and Velvick seedling.
Exports of approximately 40 000 tons p.a. account for ca. 50% of production. The United Kingdom and Western Europe absorb at at least 90% of the exported crop with the remainder feeding Eastern Europe and the Middle East.
Although the South African industry is export orientated, the South African market also plays a significant role with demand having grown considerably over the past few years.
The South African Avocado Growers’ Association (SAAGA) has a voluntary membership that accounts for 85% of South African avocado exports. Activities of the association are funded by its grower members through levies on local and export sales. The aim of SAAGA is to improve the profitability and sustain the viability of growing avocados in South Africa. To this end, the association is involved in the following activities:
Although SAAGA is funded by growers other role players, such as export companies, are also members.
Quality standards for export are determined by SAAGA in association with the National Department of Agriculture. These standards ensure that a good quality product – meeting the standards of the country of destination- is exported, and include factors such as fruit maturity, size, and blemish levels. Quality inspections are carried out by a parastatal organisation, the Perishable Products Export Control Board (PPECB) on a consignment basis prior shipping. The PPECB also ensures that standards for refrigerated road transport and refrigerated containers are met. In addition, growers that export have to comply with Good Agricultural Practice standards that are laid down by the Department of Agriculture. This however, is the minimum standard and more than 95% of the industry is EurepGAP accredited. Other accreditations such as HACCP, BRC. LEAF, Fairtrade and Tesco Nature’s Choice are commonplace. The Food safety and traceability systems in place are an indication of the sophistication of the industry.
The majority of avocados are exported by sea in refrigerated containers under controlled atmosphere (CA). 1-MCP (SmartFresh®) treatment is used as an alternative to CA for fruit destined for markets where avocados are not ripened prior to retail. Airfreight is expensive and is only viable when prices are abnormally high. Fruit exported by sea is packed and cooled in the production regions. It is either loaded directly into refrigerated trucks at the pack house or into refrigerated containers for transport to by road or rail to the port. Avocados transported in refrigerated trucks are containerised in the port prior to shipping. Cape Town is the major export port and is approximately 1800 km from the production regions. The sea voyage from Cape Town to Europe takes 12 to 14 days. Because it takes fruit about 25 days from packing to reach the European retailer, strict control of all links in the cold chain is vital in order to maintain high standards of fruit quality.
SAAGA has been funding generic promotions in the United Kingdom for the last 11 years and in the South African market for the last 9 years. A campaign was also launched in France in 2007. Promotional activities account for ± 45% of SAAGA’s annual budget. All of SAAGA’s promotional campaigns are based on Public Relations (PR) techniques, as opposed to advertising. A PR approach to promotion is one that makes use of journalists to write articles that will change perceptions and educate the target audience. Using this approach, journalists are not paid to write about avocados, instead, they are supplied with interesting information, recipes, press releases and photographs that will encourage them to write about avocados, or include them in a feature on a radio or TV programme.
Advertising differs from PR in that one has to pay directly for space in the media and is therefore more costly than PR. Advertising is more target orientated because adverts can be placed in a specific place at a specific time, whereas with PR, one can never be sure when a journalist’s article will be published. As a result, an advertising campaign would usually have more of an immediate effect than a PR campaign. On a relatively modest promotions budget, PR is deemed to be more cost-effective than advertising. But in order to be effective, a sustained effort is required. This is why SAAGA has persisted with its PR campaigns over a number of years and regularly receives media coverage with an advertising equivalent value in excess of 10 times of the total amount invested in particular campaign.
SAAGA’s promotional activities in the UK have contributed to an annual average growth of 11.6% per annum in that market. The UK is South Africa’s most stable and lucrative market and is the market in which South African avocados are most prominent during the South African season. In 1995, prior to the onset of South African generic promotions, 16.7% of the South African export crop was sold in the UK and in 2006, 34.3% of SA exports were sold in the UK. Research carried out by Taylor Nelson Sofres indicates that the number of households in the UK that eat avocados has grown from 16% in 2001 to 25% in 2006. It is believed that the availability of ripe and ready to eat avocados has also stimulated consumption. In 2005, the Chilean industry started with generic promotions in the UK. These promotions start at the end of the South African season and the beginning of the Chilean season, thus extending the period in which avocados are promoted and kept foremost in the minds of British consumers. Consequently, the Chilean promotions are also have playing an important role in increasing household penetration.
Integrated fruit production is well established in the industry. Growers are aware of the negative effects of the injudicious use of pesticides- both to humans and to the orchard ecosystems. Insect pests are monitored, and registered insecticides are only used if economic thresholds are exceeded and pre-harvest intervals can be adhered to. Similar principles are applied to disease control and fungicide applications. Compost production is common on many farms and the value of compost in terms of maintaining a healthy population of soil microbes for tree health and optimum tree nutrition is evident.
A need for continuity of volume in order to meet the requirements of supermarket programmes has resulted in significant consolidation within the South African avocado export business. Contracts with major retailers provide greater price stability than selling fruit on the open market. Eighty percent of exports are controlled by four companies, all of which have strong grower involvement. These exporters either have their own importing companies in Europe and the UK or work very closely with established importers.
Since 2000, the South African economy has been growing at a rate of 3.5% per annum. Coupled to this, is rapid growth of the middle class. Greater levels of dispensable income, together with generic promotion and an awareness of the importance of healthy eating, have increased the demand for avocados. There has also been growth in the upper income group that is willing to pay high prices for value added products. Consequently, there is strong growth in sales of avocados that are sold ripe and ready to eat.
It is estimated that 10% to 12% of the annual crop is processed either into Guacamole or oil for cosmetic or culinary use. Only ‘Hass’ is used in the production of Guacamole, whereas all cultivars are utilised for oil extraction. Processed avocado products are sold locally as well as on the export market.
The South African industry is working on accessing new markets such as the USA, Japan and China. Access efforts are being carried out within the bounds of official government-to-government protocols. Research is underway in order to develop mitigation procedures for phytosanitary pests, according to the specific requirements of new markets.
Historically, development and testing of new varieties and rootstocks has been viewed by growers as something that SAAGA should engage in on behalf of the industry. However, in recent years, nurseries have entered this field to take advantage of commercial opportunities linked to cultivar ownership.
National readership survey www.nrs.co.uk
SAAGA, 2005. South African Avocado Growers’ Association Avocado Tree Census.