The spike in avocado prices last January — with some outlets selling the fruit for $6 each — is unlikely to ever happen again, according to one of the industry’s biggest players in Western Australia.
Jennie Franceschi runs one of the largest avocado packing and processing companies in WA, a state that produces more than 60 per cent of the nation’s summer avocado crop.
She said a perfect storm of Christmas holidays, fire, rain and transport problems led to a temporary supply problem on the east coast this year.
“We were a bit short and there was a bit of panic buying and some people thought ‘oh there’s no fruit, there’s no fruit,’ so some people panicked, but realistically in the marketplace there was probably three days of it,” Ms Franchesci said.
Only some retailers raised their prices as high as $6 she said, and the major supermarket chains absorbed the temporary price hike.
“A lot of people will question whether Coles and Woolies were price gouging and I can categorically tell you that they probably lost money at that time because they kept the prices the same. They probably paid a week of particularly high prices, but apart from that it was pretty normal,” she said.
“The price point people paid for avocados weren’t that expensive and I will make this point — what do you pay for a cup of coffee?”
Production to quadruple as farmers go high-tech
Avocados are booming in WA with new tree plantings set to quadruple the state’s production.
“The south-west will probably do in the next five to eight years a crop larger than the whole of Australia currently, so it’s a significant growth,” Ms Franchesci said.
Her Manjimup-based company Fresh Produce Alliance anticipates a potential oversupply issue and has invested $5 million in a high-pressure processing facility to add value to fruit left on the ground because it fails to meet supermarket specifications.
She said the plant was ideally located to add export value to the Southern Forests region’s near-$130 million agricultural industry with an estimated 30 per cent of horticulture crops failing to leave the farm gate.
“Even though we might have free trade agreements we don’t have market access protocols for many countries, so what we can’t necessarily do with fresh we can do with processed, be it frozen or high-pressure processed or whatever,” she said.
“Some of those products we are developing specifically for the export market and they’re meant to be a high-end product so it’ll be sold at a higher return, which means we’ll be able to give back better returns.”
Southern Forests looks to build international brand
The high-pressure processing facility is coming into production as the Southern Forests region is building a regional brand and seeking new markets beyond WA.
A $7 million Royalties for Region’s investment from the WA Government has been used to establish the Southern Forest Food Council to help promote the region’s new Genuinely brand.
Council chairman Bevan Eatts said the region was hoping its well-established reputation for quality in WA would help it find new markets, especially in Asia.
“One of the problems we have in WA, there’s only 2.7 million people in the state and therefore we’ve got a small domestic market on the west coast, so basically the first thing we had to identify was where our new markets will be.”
More than 380 producers had joined the alliance representing 50 different types of fruit and vegetables and 20 per cent of WA’s agricultural value.
WA’s Minister for Regional development Terry Redman said there was huge potential to expand beyond the region’s existing 80,000 hectares of agricultural land.
“There’s not many places where available water and land come together, this is one of those regions,” Mr Redman said.
“There’s a lot of undeveloped potential both in the south-west and the Great Southern. We think the signals from the international marketplace for investment into agri-business are strong.”