ap96054 fruit growers to asia (june 1997) dan...

AP96054 Fruit Growers to Asia (June 1997)

Dan Hailoran Northern Victoria Fruit Growers Association

danikah

Stamp

AP96054 This report is published by the Horticultural Research and Development Corporation to pass on information concerning horticultural research and development undertaken for the apple and pear industry.

The research contained in this report was funded by the Horticultural Research and Development Corporation with the financial support of the Northern Victoria Fruitgrowers Association, the Central Murray Regional Development Corporation, G&A Vigliaturo Pty Ltd, RJ Cornish & Co Pty Ltd, Perona Orchards, Cherry Hill Orchard, & M&N Perona.

All expressions of opinion are not to be regarded as expressing the opinion of the Horticultural Research and Development Corporation or any authority of the Australian Government

The Corporation and the Australian Government accept no responsibility for any of the opinions or the accuracy of the information contained in this report and readers should rely upon their own enquiries in making decisions concerning their own interests.

Cover price: $20.00 HRDC ISBN 186423 947 6 Published and distributed by: Horticultural Research & Development Corporation Level 6 7 Merriwa Street Gordon NSW 2072 Telephone: (02) 9418 2200 Fax: (02) 9418 1352 E-Mail: [email protected]

©Copyright 1999

HROVC

HORTICULTURAL RESEARCH & DEVELOPMENT CORPORATION

Partnership in horticulture

mailto:[email protected]

flP&rCi

REPORT

'GROWERS TO ASIA' June 1997

Sponsored by the Horticultural Research and Development Corporation - 1997

Growers to Asia For twelve days towards the end of June 1997 a group of Goulburn Valley pome and stone fruit growers visited major fruit markets in South East Asia to assess the quality and reputation of Australian produce. The group met importers, wholesalers, street stall owners and supermarket buyers in all three cities and came away from the visit confident that Australian fruit has a sound future in these markets.

The Horticultural Research and Development Corporation (HRDC) provided funding for the tour.

Market Overview.

The touring party visited the three ports of Jakarta, Singapore and Kuala Lumpur which receive large quantities of Australian fruit. Singapore also re exports product to other Asian countries.

Product is distributed through a lengthy market chain that includes Importers, Coolstores, Wholesalers, large and small Retailers and 'wet market' street stalls. Cool store facilities, transport infrastructure and networks, and tropical weather conditions greatly influence fruit quality.

In Asia, 40 - 50 % of customers buy on 'price' alone. The wet markets accounts for the greater majority of these customers. Large supermarket chains cater for approximately 50 % of the population who purchase fruit because it represents 'value for money', and to a lesser extent 5 -10% (eg. Expatriates) who are willing to pay a higher price for quality.

Variations exist between the countries visited. In Indonesia a large quantity of fruit is sold on price because customers are less affluent compared to other Asian countries. Singaporean consumers are health conscious and are more selective when purchasing fruit. Kuala Lumpur caters for a blend of customers via 'Cash & Carry', price and specialist lines.

Product sweetness and colour are decisive and common considerations for most Asian consumers.

Importers play a major role in accessing supply for respective markets. Wholesalers sell, distribute and in some cases pack product for supermarkets, small retailers and street stalls thoughout each country. Supermarkets continue to increase their market share at the expense of the small retailer.

Pears

Packham pears have a strong reputation in SE Asia and meet a steady demand from consumers who require fruit with a firm, green appearance and a sweet taste.

From June there are diminished quantities of Packhams from southern hemisphere competitors such as Chile and South Africa . However the SE Asians source pears from around the world and new season Chinese pears will enter the market from August/September, along with USA Red Anjou and WBC. Chinese pears serve another market segment that requires small yellow pears.

Australian Packhams are not only differentiated by their appearance and taste but also by their price and storage life. Most cartons are sold at $3 - $4 above competitor prices. Storage life surpasses that of all other pears and stocks are kept until late November. For this reason Packham prices and sales increase markedly from June onwards.

HRDC Report 'Growers to Asia' 1997 Page 1

Price

Importers purchase fruit by the carton. Unlike the Australian market where fruit is mostly sold by weight (price per kilogram), pears in SE Asia are sold by number. From Feburary to May prices vary from $21 to $25, the latter being paid for better quality fruit (size colour etc). Importers add their own costs (storage, transport etc) when carton are sold to wholesalers and retailers. This price varies from $26 to $33.

Retailers calculate competitive price points based on fruit size and sell fruit loose, in two packs or in any number up to about ten. It is vital that packers and exporters supply the fruit size asked by the importer and retailer to ensure that the fruit can be sold at the advertised price in order to meet sales targets.

Price mark up in the street markets is not great. A street stall operator usually sells only one or two lines of fruit. For Victorian pears the owner would be buying at the wholesale market from A$30 to A$33 and selling count 80 for A$40. In Kuala Lumpur the sale price of one ringgit per pear equates to these figures and typifies the important relationship between fruit size and price.

Packaging

Niche marketopportunities for high quality Packhams exist in all three countries visited. Retail outlets attach a premium price for fruit, but they are not large volume traders. However many of their customers seek high quality fruit that is attractive and convenient to serve as a meal. For this reason fruit is mostly packaged with two pears of count 56 or 64 to a pack, to 4,5, or 6 pears of counts 90,100 or 110 to a pack and at a high price. This niche has yet to be fully exploited by Australian suppliers.

Pears were generally packed on flat white polystyrene trays with a plastic overwrap if they were not in loose stacks. Packaging is used to minimise handling by shoppers and to improve hygiene. No real evidence exists of fruit breakdown in the packs and stocks are mostly cleared within the day.

Quality.

Growers were able to witness and understand the progression of fruit through the market chain and examine fruit quality issues. Tour participants were frequently disappointed to see sub standard fruit that was scarred by limb rub, russet, nail marks, sunburn and black spot not only in cool storage but also on supermarket shelves and street stalls.

Supermarkets are becoming more conscious of the quality received in each purchase order. Some retailers reject orders that are above a certain percentage point (eg. 10%) because of the lower profit margins and increased costs that occur through rejection (by customers).

Because street stall owners are at the end of the market chain they struggle to maintain fruit quality. The lack of cool storage facilities and frequent handling of fruit detracts from quality standards thus resulting in a fair amount of product rejection from a carton. Subsequently, the owner incurs a loss of product and has small profit margins (approx A$2 per carton).

The production, packing and export chain was questioned by participants who were at odds to explain why some Australian fruit was allowed to pass through the system and arrive in any market in such a poor state.


Promotion

Importers, Wholesalers and Supermarkets support promotional strategies and ploys for selling fruit and increasing market share.

Large retailers accept promotional funds from suppliers to conduct taste tests, cooking demonstrations and to display advertising material. Apart from the benefit of being able to supply large quantities under a single brand, the USA industries provide strong retailer promotional support for their products. These include give aways with each purchase eg. a plastic lunch box for kids with each purchase, and some other gimmicks.

Brochures and flags advertising 'Australian Fresh' produce were to be found in many retail shops. Street stall owners warmly accepted any promotional material offered for display by the tour participants. The current AHC promotional campaign in Asia works well overall but requires some improvement in select areas. For example, in Jakarta advertising material that promotes Australian apples was being used when there are few (if none at all) Australian apples.

Apples

Australian apples (Red delicious, Pink Lady etc) face an up hill battle to sustain a market position. American and New Zealand fruit command a large share of the Asian market by respective pricing and promotional strategies.

This season Washington apples have been delivered to the three markets at record low prices, US$14-$15 per carton, making it very difficult for other appie suppliers to compete. The popular block red, Red Delicious Washington apple has sold well in SE Asia this year.The USA has a very good name for consistent supply and quality with single brands eg. Washington Red Delicious apples and Sunkist oranges. The consistency in quality far out weighed that of Australian fruit. In some cases, Tasmanian apples ranked as a class 2 fruit and barely catered for consumers who require red (full coloured) sweet fruit.

Other fruit

Stonefruit is mostly imported from the USA which has a very good market position in Asia. Supplies from Sth African imports are increasing. Most imports of Australian stone fruit are airfreighted from Western Australia. Opportunities exist for increased shipments of 'Golden Queen' peaches that appeals to the Chinese consumer because of its fragrance, skin and flesh colour, taste and name! Nashi fruit has limited appeal in the markets visited because it is deemed to be a 'cold' piece of fruit.

'Amber Jewell', Autumn Gianf and 'Fortune' (US) plums sell reasonably well because of their taste and red flesh. Asian markets require supplies of large, red, sweet plums.

Traders

Supermarkets are increasing their involvement as traders in the Asia market. Asian retailers (Heros, NTUC etc) use their expanding market position to influence supply, distribution and sales. They are very keen to access consistent lines Df quality fruit from growers / packers and willingly accept consolidated containers / shipments. One Australian supermarket is exporting Victorian pears at competitive prices into Asia.

Supermarkets seek new product varieties to cater for changing consumer demands. Whilst customers essentially want fruit that is clean and sweet they are willing to expand their choices to newer varieties. Suppliers of new fruit varieties :an obtain price premiums.


Information systems.

The Indonesian Government plans to install a database that records imports of fruit and vegetables. Indications are that it will be available on the Indonesian Interactive Site (IDS). Malaysia's information service is hindered by the manual entry of data and information thus creating a 18 month to 2 year delay before import figures are publicised. 'Austrade' in Singapore provides a 'fee for service' to access the most up to date information.

Ready, 'matter of fact" information was accessed from the organisations visited in S E Asia who were enthused by the visit of Australian growers and were curious to know why more growers had not come to inspect their fruit. Each establishment willingly gave information on shipments, quantities sold, product quality, market prices, consumer purchasing behaviour and competitor activity thus providing genuine feedback to attending growers.

Opportunities exist in Asia for:

Large retailers wish to access new fruit varieites to place on their shelves and to cater for a growing consumer demand for such products.

Orders for consolidated shipments are becoming more common and are seen to be a real alternative to shipping only one product line in a container.

Co operative and direct selling of large fruit volumes or for select market niches has real potential for future sales. Presently, Class 1 fruit has a limited market (5 -10%) but as Asian countries become more affluent this market niche will expand.

Take home messages. Grower who participated in the tour received some loud and clear message :-

Participants were told on different occasions that Australians have a "...she'll be right attitude" when product delivery, quality and presentation is questioned. Compared to other nations Australians need to improve their commitment to delivering the best possible product to our Asian customers.

The horticultural industry's fragmentation has been observed by one leading Asian Importer who made the comment that " It only takes two Australians to have a fight". He believes that a lack of unity has resulted in a weakened position for Australian exporters, packers and growers in the Asian market. Australians must have a longer term view of and be committed to their export markets.

Growers were clearly told that they need to lower their costs of production because a highly competitive market place offered no improvement in prices received for fruit in the forthcoming years.

Product needs to be competitively priced and managed better during the production and packing stages to ensure a consistent supply of fruit quality.

Promotional and educational activities targetting consumers are effective methods of increasing product sales. Such activities must be carefully orientated toward customer requirements. Importers suggested that it would be advantageous for Australian fruit suppliers to have each piece of fruit stickered and product labelled.

Growers who participated in the tour strongly recommended that other growers visit these countries to gain a better understanding of the issues relating the marketing of their fruit.

HRDC Report 'Growers to Asia'1997 Page 4

Conclusion

Australian Packham pears have a sound reputation in SE Asia which we need to protect the group of Goulburn Valley growers concluded after their twelve day visit. In order to defend our Packham market we must increase promotional support for our pears, continue to promote the Australia Fresh label and clearly identify our fruit as coming from Australia.

The growers supported the push for improved product quality. While there was excellent quality Victorian Packhams in the markets there were also some very ordinary fruit lines. Tour participants believed that the packers must work hard to ensure that only good quality fruit is packed. They also identified that it is the responsibility of the grower to ensure that good quality fruit is supplied to the packer. While quality supplied to the exporter can be compromised depending on the negotiated price there is no room for misleading the customer and consumer. This will damage future sales especially when a sizeable market segment and many millions of dollars can be lost to international competitors.

Orchardists must realise that is time to remove unproductive and out dated varieties that bear lesser quality fruit and are costly to grow. Growers who went to Asia held little hope for Buerre bosc pears and felt that the best option was to remove them and plant attractive pear or apple varieties.

The Victorian pear industry is well placed in the Asian markets as an exporter of fruit. To increase consumer demand for product Australian suppliers will need to update and employ a range of strategies that will counter those used by competing nations. Certainly fruit quality management; the structuring of cooperative arrangements between grower and packer; the creation of information systems; implementation of unified pricing strategies; and improved promotional activities will enhance Australia's market share in a very competitive Asian market.

Dan Halloran - Quality Coordinator. Pear Industry Steering Group )3 58 215844.

4RDC Report 'Growers to Asia' 1997 Page 5

Indonesia. Jakarta

Hero's Supermarket distribution Centre.

Heros is a large and expanding retail supermarket chain with 48 supermarkets in Jakarta and 70 other outlets located in key Indonesian cities. It accesses vegetable and fruit supplies direct from various exporters within different countries, and coordinates and distributes the product to its supermarkets.

Australian packham pears ('Blue Mountain' label) are exported by Woolworths, packed by a NSW packer and supplied by Zurcas (Vic). Growers noted that the fruit quality was barely acceptable because the product was marked and russeted.

Consumers who shop at Heros are health conscious, are aware of pesticides & herbicides, and have a preference for small to medium size, sweet, quality fruit.

Pears are re packed into single plastic bags (photo) to prevent damage from consumers who touch and feel the fruit.

Some Australian stone fruit is accessed and airfreighted from all states except Vic. Product includes yellow flesh nectarines and white flesh. The latter must be sweet.

Heros representatives state that Australians need to address issues such as pallet size, packaging and fruit quality standards especially those that relate to cosmetic defects. For these issues greater confidence was expressed in American and NZ fruit suppliers.

USA and NZ are very good at promoting their fruit. Both countries have well developed promotional activities and ploys that include: Use of females to promote fruit at stalls; 'give always' such as water bottles and T shirts for every 2 or 3 kgs purchased; and free Hero staff luncheons.

Other fruits: Korean pears (photo) sell very well. Nashis are not in demand. Chinese pears are very good although there are difficulties noted with supply. Burre Bosc pears have a limited market and do not sell well.

Message - Quality, Price and Promotion.

Indo Pacific (Public relations Company)

Acts on behalf of the AHC and sub contracts to a 3rd party to conduct AHC's promotional campaign. The campaign embraces Importers and Retailers (Heros, Matahari and Goro supermarkets) and uses Point of Sale (POS) material such as Flag chains, give aways, placards and taste testing to promote Australian fruit. Stone fruit is not included in current promotional activities. Merchandising programs are conducted with street stall holders (hawkers).

No formal market research is being conducted to evaluate the effectiveness of AHC promotional activity, although a regular audit is held to ascertain that POS has been used with effect.

Indonesian customer segment is structured as follows : 5% - Quality conscious, 35% seek 'value for money' product; and 60 % buy fruit on price.


Indonesian city of Surabaya (pop 3-4 million) in central Java warrants further consideration to increase the profile of Ausf fruit.

Preferred Ausf apples are: Red Delicious and Royal Gala. These apples must be 'red' and sweet.

Competing countries, NZ - 'ENZA' & USA ie. Washington State Apple Commission (WAC) employ high powered promotional activities to enhance the sale of respective fruit. Activities include: Trade lunches provided for Importers and Retailers; On site display and cash prizes; direct promotions with individual / large retailers; give aways; new designs on POS material every year; POS material written in Chinese mandarin and local dialects.

Message - Australia should use its close proximity to Indonesia to greater advantage and at the same time reduce its cost of production. Importantly, Australians need to get their act together and start co operating.

Attention needs to be given to: 1. Branding to increase the profile of Aust fruit. 2. Use of co operative advertising with major retailers. 3. Placement of POS material on an on going basis and 4. 'Freebies' to be given out at point of sale.

P.T. Samudera Pacific Maju (ANL agent)

This company has two sea freight terminals as well as a transport and warehousing system to handle 'Hi cube' 40 ft containers. Terminal #1 is used to off load 'reefers'. As from 1 st August it is anticipated that the turnaround time for Australian vessels will be 3 weeks (ie. round journey from Australia).

Containers are inspected by SGS for cargo content and the number of cartons. Changes in port inspection system will speed up the process of un/loading and will witness random inspections of imports. If less than $5000, cargo will not be inspected. Importers usually under declare container content and make own transport arrangements.

Customs officials are not strict on fruit and vegetable imports. Indonesia will soon introduce a computer based program for clearing imports using EDI (Electronic Data Interchange) and link data between Importer/ Exporter/ Customs. From June 15th this data will be transferred via diskette to Customs.

Indonesian Government (BPS) proposes to have an Indonesian Interactive Site (IDS) available for the public to access information on imports and exports.

P.T. Wigah Perkasa (Importers)

Purchases fruit from Lockett Bros (Sydney). Packham pears (in demand) are obtained from Zurcas and Nethersoles via K McGillan (Exporter). Approximately 1 40 ft consolidated container obtained per week. The company sells fruit to Wholesalers who in turn sell to Retailers and Hawkers.

^Z Kiwi fruit is advertised on TV and receives a very good response. No monies needed for promotional purposes.

mports only small volumes of stone fruits, navels and cherries, but does require more stone fruit and navels. Purchases 3rapes from Mildura.

Australia is an equal supplier in comparison to USA and NZ but Washington State Apples (WAC) beats all other fruits on Drice and quality. Purchases 70 containers per week of WAC fruit. Sth African and Chilean pears are low on quality.


P.T. Laris Manis Utama. (Importers)

Imports mainly pears, apples and grapes by ship. Has exclusive rights to sell G Thomson fruit. Approximately 1 - 2 containers are imported each week and about 70 containers per year from Thomsons. Containers are an even mix of 20 and 40 footers.

Chilean fruit is only available up to the end of May. $5 difference per carton noted between Aust and Chilean fruit which the Importer would prefer not to pay.

Australian packham pears are better because of their longer storage life. These pears are bought because they offer" value for money". G Thomson's name sells the product.

Importer prefers sizes 64 to 70s. Pays $25 - 26 in February and $29 in June per carton. Demand falls in June because high paying consumer is usually overseas in June / July.

Australian Fujis are exported by the Heinz group in Adelaide. Consumers prefer 100% red colour. WBC pears sold well this season.

Received 2 containers of packhams this year from J Holman (Exporter) and paid $2 less per carton. No promotional activities are conducted.

P.T. Mekar Citra Abadi. (Cold storage & Importer) Distributes fruit to Jakarta only. Company has 18 refrigerated trucks to distribute product. Fruit problems arising from 'reefer1 containers are passed back to the exporter. Mixed maturity problem noted with a shipment recently.

Importers prefer not to deal with supermarkets because of 3 month delay in payment.

Ships 1 - 2 40ft containers per week from G Thomson because of the loyalty and trust that has been established with Thomsons. Both parties communicate regularly. Thomson wrapping paper is very good.

Zurcas has an exclusive arrangement with Mr Cheong. Also imports 'Sunrise' packhams from B Ceresa.

Lost money in 1996 on WBC pears. Prefers Australian pears that are 64 - 70 in size, hard, crisp, green and sweet. Demand for large size fruit is low.

Chilean pears are very competitive but cannot be stored for a long time.

Australian apples are almost non existent in Indonesia because of the US and NZ domination of markets. US apples sell at $14-15 per carton for 5 months of the year. Chinese fuji apple sells very well. Imports 8-12 40 ft containers per week.

Also purchases plums (Angelinos) from Australia. Plums should be red and sweet. Potential exists for growers and packers to supply mandarins and apples.

Indonesian Importers place less emphasis on promotional activities. Street stall owners are very keen to access promotional material. Message. Australians need to be price competitive.


Singapore Singapore Fruit Importers.

Major importers of fruit and vegetables into Singapore. Imports from Thompson, 'Fresh pack', C. Mostyn & 'Southern Cross'.

Thomson is the best brand in Singapore, followed by 'Sunflower1

Imports 30 20ft containers per year from C Mostyn.

Consumers prefer sweet, crispy & green pears from Australia. Many varieties of Chinese pears are available but Aust packhams are in demand because of their colour, red pears are required for display purposes and only if the price is right.

Pay A$22-24 per carton for packhams.

US - Californian fruit is very good eating quality.

Australian 'Golden Queens' is a preferred variety because of its price and fragrance. Require 70 - 80s for festive season. Prefer stone fruit with white colour and pinkish blush (ideal).

Plums - prefer fragrant red colour during Chinese new year. Do not like yellow. Imports 'Amber jewel' from WA and 'Fortune' from the US.

Apples. Purchase from Tasmania and Victoria (Grannies, Royal Galas (demand decreasing) and Fujis). Pink lady not in demand because of high price. Jakarta requires top quality red apples. Singapore takes less coloured apples. Pays A$15 per carton for most apples but A$20 for Chinese fuji apples. Prefers apples to be sweet, crispy, red/pink and size 88 -100+ Chinese will influence markets because they are developing CA facilities and are able to deliver high volumes.

Message. People have to be committed to their export markets.

Singapore Fruit & Vegetable Importers and Exporters Association.

Exports to China organised via Hong Kong and a Company must have contacts in HK. Alternatively, via pressure on Chinese Gov't - eg. WAC now exports over 100 containers per month into China.

Some fruit is exported toVietnam which is still very much a closed market. Small quantities of WAC apples (Red Fancy), grapes and some pears are being exported. Fruit is used mainly as a gift and later for consumtion. Vietnam has a distinct ack of CA facilities.

Singapoeans are very health conscious and eat more fruit per capita than any where else in Asia.

Dremium prices are gained for top quality fruit and vegetables. Cannot sell poor quality fruit. G Thomson is #1 in Singapore. WA "Black Knight pears were of high quality in 1997. Burre Bosc pears in Singapore have a limited market.

'VA stonefruit - need to know no' of fruit in box (count); boxes have to be standardised and packed to specifications.

4RDC Report 'Growers to Asia'1997 Page 9

Nectarines are imported from USA, including doughnut peaches. Sth Africa is becoming a more dominant player in this region.

Message. Any country exporting quality fruit will have no problems selling the product. New varieities attract better prices.

Sogo Supermarket Food Hall

Packham pears (G Thompson) - very poor fruit quality noted (photo). Fruit is marked by limb rub, bruises, russet and stems. Fruit also needs to have consistent colour (green)

Customers require information on pear attributes and eating quality, along with 'Eastern' style recipes. Also should have stickers that indicate country of origin.

Message. Education and promotion are very important.

NTUC Supermarket (Fair Price Supermarket)

Sells 10 carton of packhams per day.Packham pears (G Thompson) - Quality problems (russet, limb rub and sunburn) were quite evident. Store manager wanted to know if Thomsons have a Quality Control system!!

Australian 'Hi Early' apples were of average quality and blemished by DPA markings. Grannies (Varapadiou & Thomson) were of a good quality. Australian fuji was poor in quality with cosmetic defects and browning noted.

Customers are price conscious

Austrade. Overview of Asia.

Fruit and vegetables are viewed to be valuable commodities in Asia because the Asian sub continent is not a viable place for fruit and vegetables.

The market is in a state of change / evolution that is driven by changes in the retail sector, ie supermarkets.

Singapore is focal point for trade and distribution in this region. Its economy has grown 17 fold since 1965. Singapore has a very good relationship with Australia although there is some concern with the Pauline Hanson factor. Singapore faces increased pressure from Malaysia and Indonesia to use their ports.

Indonesia economy is steadily evolving but less than 1% of the population (2 -3 million people) earn in excess of $US 20,000. Question mark hangs over the successor to the current Indonesian president. The army is the main power broker in the political arena and therefore has an influence in business decision making and partnerships.

Trading / business relationships are built on trust and cultural understandings.This is very important when dealing with Chinese and Malaysian business people. Contracts are a secondary consideration.


NTUC - 'Fair Price' Supermarket.

Major retailer with numerous outlets in Singapore and 7 in Kuala Lumpar.

In 1987 fresh produce comprised 5% of all stock purchased. Today, it has grown to 17%. NTUC prices are used as benchmarks by its competitors.

Preferred fruit purchased - 1 . Oranges (fastest turnover), 2. Apples and 3. Pears. Together they account for 16 million sales and 40% of the business's turnover.

Quality is the #1 consideration when purchasing fruit and price #2.

Prefers packham pears because of their taste (sweeter) versus Sth African, Chilean & Chinese pears that have different qualities. G.Tompson has better quality fruit. Three Brothers' brand is not recognised as having good fruit quality. Australian growers need to improve the taste, overcome matruity problems, deliver size 80 - 90 and have stickers on their product. Young children are a very good indicator of pear preferences.

NTUC advertising in newspapers proves to be very effective.

Purchases stonefruit and plums (Autumn Giants & Amber Jewells).

USA has a very good system of selling stonefruit by numbers and provides a table (contact Rob Cornish) that assists in the purchasing decision as compared to the Australians who sell by weight. USA has agents in the markets to provide information and gather feedback.

Australian sea freight is not all that reliable as compared to the US. Air freight maybe a better proposition.

NZ apple (Pacific Rose) is a preferred fruit because of its taste and sweetness. Chinese fuji is a very good apple that sells at$A15-16 a kilo.

^TUC would seriously consider direct sales between NTUC and growers.

Message" More growers need to travel to Asia". - Tng Ah Yiam. NTUC.

IRDC Report 'Growers to Asia'1997 Page 11

Malaysia. Austrade.

Austrade supplied notes are available on request.

Australia exports 22% of its fruit to Malaysia. Tariffs in Malaysia are being reduced.

Apples - 'Royal Gala' is quite popular. Sth African fruit (pears) becoming more evident.

Information on fruit imports is limited because of the time taken to collect and collate reports on imports. No computerised system exists therefore data is nearly 2 years in arrears.

Branding. - Labelling of Australian fruit at a retail level is fragmented and low. Fruit should have 'Australia Fresh" logo attached. Importers provide funds to retailers for promotional activities (SA2-3000 contribution). These activities are known to work well and Export/ Import Companys should have promotional budgets.

Supermarkets are increasing in number and becoming key players in retail sales. At a retail level supermarket shelf space must be bought since these stores have a large supply base and can choose from other suppliers / countries.

Supermarkets are viewing favourably containers with consolidated product. New buyers are emerging in Penang who wish to purchase such containers. Message. "Australian growers need to work together".

Parkson Corporation - Supermarket stores.

Parkson has 34 stores in Malaysia and 7 in China. From a $ M1.2 billion turnover supermarkets contribute 6% of which 20% is derived from fruit sales. The supermarket chain believes that its future direction and potential growth is in China where it aims to export and establish a counter seasonal supply of fruit and vegetables.

Parkson targets the consumer who seeks 'value for money' produce. 90% of its customers fall into this market segment.

Produce is accessed from USA (apples, pears and citrus) and traditionally purchased from Wholesalers. Parkson is now importing direct from the grower / packer (eg. Zurcas). G Thomson has a reputation for quality. Zurcas is known for their better price structure but not for product quality (fruit could have a better shine).

3 - 4 containers of Australian fruit is imported each month. Accesses 'Hi Early1 and 'Royal Gala' apples from Tasmania. NZ apples must be imported via Singapore. Malaysians have a strong preference for apples.

Pears purchased by Parkson is mostly sold in loose pack on the supermarket shelf with some being packed into 4 or 6 piece trays. Large size packhams sell well compared to medium sized fruit.

The organisation is conscious of pesticides & herbicides and resultant chemical residues as it has the potential to cause a loss of market share. Accessing a supply of exclusive product is of paramount importance to Parkson.


World Fruit Importers.

Purchases fruit from 'Fresh Trade' / Brian Ceresa in Melbourne, requires pears that are Green, Crispy, Sweet and clean (blemish free). Supplies some Retailers and large Wholesalers. Shipping is very costly because ANL has little or no return freight.

Pear shipments have dropped dramatically in the last 2 years. Fruit is purchased from Chile and Sth Africa who supply fruit at a cheaper price but at a lesser quality. Imports 1 40 ft container per week from Sth Africa and 2-3 containers from Australia per week.

When Chinese pears are in season the demand for Australian pears decreases with resulting lowering of price. Market price is the key determinant for the sale of pears. Pears need to have a very good storage life.

Interested in accessing a supply of new varieties as long as the product meets market requirements.

Promotional activity is conducted at Supermarkets and funded by the Exporter whose brand is being promoted and some times linked with AHC and 'Aust Fresh' campaigns. 'Unsurpassed' brand (J Barraclough) uses 'Aust Fresh' brand quite well.

Message.

Australian fruit growers need to be more price conscious and prepared to accept lower prices because of the increased competition from major export countries.

Essentially, the Australian industry needs to re engineer itself on: • National policy.

Focus. It needs to be more customer focussed. • Industry cost efficiencies. • Trade barriers. Further reduction in trade barriers is required.

Australian packers have the attitude that"... she'll be right*.

Makro (Cash & Carry)

6 large stores in Malaysia. Customers must pay cash on every purchase. Customers are mainly professionals, 'end users' and small retailers who seek 'value for money' produce. 80% of sales are derived from fruit.

Produce (pears) is supplied by an Importer who accesses the product from a Singaporean agent. Makro has limited storage facilities and therefore calculates carefully, using a computerised stock control system, the amount of product required in the coming weeks.

Reject fruit is returned to the supplier since the Importer is responsible for quality. Stock is rotated when necessary. Approximately 1.5% (sales value) is rejected per month.

Importer packs fruit to order which is usually 15 pieces per bag. Bags are bar coded. Small retailers usually purchase fruit in bulk (cartons) by the truck load at a 10% price discount.


Purchase Australian pears on a regular basis - including 'V19' (Nethersoles) and others. Problems noted with fruit size. Makro requirements are not usually met. In comparison, few problems are noted with the US, Chilean and Sth African produce.

Makro Malaysian customers prefer large size fruit that is green, crispy, and clean. Price is an important consideration.

Australian funds are available for in store promotional activities.

Koxin Enterprise - Fruit Importer and Packer.

Importer of Fruit (35%), Vegetables (45%) and dairy product (20%). Most of the fruit is imported from the USA, France and Chile.

Packs pears for different market requirements. Lesser quality fruit tends to go to the wet markets. Sth African pears, that are usually of a high grade, are sent to Singapore. Chilean pears have a poor storage life and are low in quality. G Thomson is a supplier who has a slightly better pear quality than most.

USA is a far Better Exporter in terms of Price, Quality and Timing of delivery than Australia.

Stone fruit. 'Golden Queen' variety is preferred by supermarkets. Require size 16-18 .Golden Queens are considered to be high value items because of their colour and name. Nectarines do not sell.

Apples. Fuji and 'Royal Gala' apples are in vogue. China produces a very good fuji apple. 'Sundowner" is out because it is not sweet enough. 'Pink Lad/ is good but its price is too high. Australian apples need to be price competitive -presently 30% higher in price.

Nashi is not a preferred fruit because the Chinese believe that it is a 'cold' fruit.

Koxin provides the finances for promotional activities in select supermarkets.

Chemical residues are a consideration. Excess MRLs have been detected on Australian plums.

Message. Australia needs to get rid of the".. she'll be righf attitude, provide labels on each piece of fruit, consolidate the industry, and diminish the number packers.


ap96054 fruit growers to asia (june 1997) dan...

Documents