Plum opportunities ahead for horticulture
Australian horticulture is basking in the glow of solid domestic and international growth – and fruit and nut exports to China provide proof, having increased by 500 per cent in the past four years.
As ANZ’s Future of Fresh report – released this week in China – shows, the upward trajectory has played a significant role in horticulture becoming a $A10 billion industry and Australia’s fourth-largest agriculture export commodity, worth $A3 billion in 2016 alone.
“To fully realise its potential Australian horticulture must focus on continuing to reliably and sustainably present a quality product.”
Underpinning this growth is the well-documented rise of the Asian middle class, with revised figures putting the size of the demographic at 3.2 billion people at the end of 2016 and set to reach 3.5 billion by 2030.
Looking at the trends and figures it appears the middle class has already developed a strong liking for Australian fruit and nuts, particularly almonds, macadamias, tropical and stone fruits, as well as the traditional apples and table grapes – and a willingness to pay for quality.
There’s no doubt Australia’s reputation has been a significant advantage for the horticulture sector.
National Farmers’ Federation CEO Tony Maher says Australian agriculture’s safety standards and production guidelines extend over and above other exporters, with a continuous focus on biosecurity and rigour around traceability, productivity and environmental sustainability. But as competition in the global market continues to tighten, this reputation and image won’t be enough.
While it will earn Australia the right to access export markets, it won’t always mean we’re in a position to demand a premium price.
That’s not to say we should lessen our efforts to tell this positive story – in fact, there’s still much to do to ensure our track record and high standards are well understood, especially when it comes to commodities not immediately synonymous with Australian agriculture.
To fully realise its potential Australian horticulture must focus on continuing to reliably and sustainably present a quality product. To do this requires a collaborative approach, scale and capacity to supply both domestic and export markets. Maher says this is something horticulture can learn from other sectors.
“In terms of competing in the global market, it is really having the ability to get that balance right between having unique brands and unique market opportunities,” he says.
“[It’s about] coming together in a coordinated way so we have the capacity and sustainable supply of products into these markets because we have to supply the product in reliable and sustainable ways if we’re going to have an ongoing presence.”
“It’s sustainability, reliability and maintaining the high quality of standard and regulation which underpins our food and fibre.”
For producers looking to Asia or further afield for export opportunities the old rule remains. To be successful overseas you first need to be successful at home.
The domestic horticulture market alone is challenging and exporting creates new levels of complexities, but it can be worth it in the long run.
Businesses must give themselves adequate time to develop a greater understanding of a market’s nuances and build strong and trusted relationships.
Across the industry new innovations in production, processing, packaging, transport and logistics are creating unique opportunities and attracting new capital – both vital to the industry’s long-term evolution and survival.
In recent years Australian horticulture has increasingly shifted towards capital-intensive forms of production like indoor or hothouse propagation, a trend continuing as larger investors seek to expand undercover production systems, attracted by the reduced exposure to seasonal conditions and income volatility.
Corporate entities are also increasingly on the lookout for opportunities amongst some the of the stronger, emerging fruit and nut exports with almonds, macadamias and mangoes at the top of the list.
In the coming years new opportunities will also continue to emerge through e-commerce as consumers change the way they interact, access and consume fresh foods.
Australian agriculture must be nimble, flexible and willing to adopt technology and new sales platforms.
It all adds up to a dynamic outlook for Australian horticulture and despite some challenges remaining around production costs and market access, this industry carries an air of excitement.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
Author – Mark Bennett: Head of Australian Agribusiness at ANZ
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