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Development of an Internationally Competitive Eastern Australian Cauliflower Industry

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Development of an Internationally Competitive Eastern Australian Cauliflower Industry Development of an internationally competitive Eastern Australian cauliflower industry Clarrie Beckingham NSW Agriculture Project Number: VG00037 VG00037 This report is published by Horticulture Australia Ltd to pass on information concerning horticultural research and development undertaken for the vegetable industry. The research contained in this report was funded by Horticulture Australia Ltd with the financial support of the vegetable industry. All expressions of opinion are not to be regarded as expressing the opinion of Horticulture Australia Ltd or any authority of the Australian Government. The Company 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. ISBN 0 7341 0383 2 Published and distributed by: Horticultural Australia Ltd Level 1 50 Carrington Street Sydney NSW 2000 Telephone: (02) 8295 2300 Fax: (02) 8295 2399 E-Mail: [email protected] © Copyright 2002 Horticulture Australia DEVELOPMENT OF AN INTERNATIONALLY COMPETITIVE EASTERN AUSTRALIAN CAULIFLOWER INDUSTRY Final Report for the Project VG 00037 (31 December 2001) Compiled by: Clarrie Beckingham Asia and Australia 3* Horticulture Australia NSW Agriculture Lachlan Valley Horticultural Network Development of an Internationally Competitive Eastern Australian Cauliflower Industry. Final Report for Horticulture Australia Limited Project: VG 00037 Principal Investigator: Clarrie Beckingham Former District Horticulturist (Vegetables) NSW Agriculture POBox 1386 Bathurst NSW 2795 Tel: (02) 6330 1200 Fax: (02) 6332 1458 Email: [email protected] Team Members: Jim Murison Rod Attwood Manager, Agsell Executive Officer NSW Agriculture Lachlan Valley Horticultural Network PO Box K220 PO Box 839 Haymarket NSW 2000 Cowra NSW 2794 Tel: (02) 9372 0126 Tel: (02) 6341 2777 Fax:: (02) 9372 0155 Fax: (02) 6341 2788 Email: [email protected] Email: [email protected] Purpose of Report: To prove that it is feasible to develop an internationally competitive eastern Australian cauliflower industry by using a scoping study to identify new viable markets, consumer and retail requirements and provide trial shipments of product to buyer specifications to test the markets. Any recommendations contained in this publication do not necessarily represent current HAL policy. No person should act on the basis of the contents of this publication, whether as to matters of fact or opinion or other content, without first obtaining specific, independent professional advice in respect of the matters set out in this publication. Horticulture Australia =^^4 * NSW Agriculture Lachlan Valley Horticultural Network CONTENTS Page INDUSTRY SUMMARY 3 TECHNICAL SUMMARY 5 RECOMMENDATIONS 7 ACKNOWLEDGMENTS AND CONTACT DIRECTORY ON INDUSTRY STRUCTURES 9 INTRODUCTION 14 5.1 Background 14 5.2 Industry Statistics 15 5.3 Literature Review 17 MATERIALS AND METHOD 18 RESULTS 19 7.1 EXPORT MARKETING - FRESH CAULIFLOWER 19 7.1.0 Plan Plan Plan - Networks and Alliances 19 7.1.1 The Export Market Place 20 7.1.2 The Export Chains 21 7.1.3 The Golden Rules of Customer Rela tionships 24 7.1.4 Market Profiles 25 • Export Market Profile Proforma 25 • Japan 26 • Hong Kong 35 • Taiwan 42 7.1.5 Profitability of Exporting Fresh Cauliflowers 48 7.7.6 Market Access or Conditions of Entry 54 7.7.7 CultivarSelection 55 7.7.8 Storage and Transport Conditions 56 7.7.9 The Cool Chain 58 7.1.10 Post Harvest Technologies for Extended Shelf Life 60 7.7.77 Black Spots and Rots and Blemishes 62 7.7.72 Packaging 63 7.7.73 Quality Assurance 64 7.7.74 Logistics - Freight CouncisI and Australian Institute Of Export 70 7.7.75 Trial Shipments and Specifications 71 7.7.76 Insurance and Customs 73 7.2 DOMESTIC MARKETING - FRESH CAULIFLOWER 74 7.2.1 Background 74 7.2.2 Consumers Study 74 7.2.3 Wholesale, Retail and Food Writer Viewpoint 82 1 8. BUSINESS SUPPORT 85 8.1 Federal Government Programs 85 8.2 State Government Assistance 87 9. DISCUSSION 90 10. BIBLIOGRAPHY AND RECOMMENDED READING 91 11. APPENDICES 92 2 1. Industry Summary The primary aim of this 1 year project is to prove that it is feasible to develop an internationally competitive eastern Australian cauliflower industry by using a scoping study to identify new viable markets and grower networks, consumer and retailer requirements and provide trial shipments of product to buyer specification to test export markets. During the 13 years 1986-1999, NSW and Victoria which are domestic market focussed have suffered respectively a 42% and 58% decline in production. Domestic per capita consumption has declined by 52% in the same period and the eastern Australian industry needs revitalisation. This project has identified export and domestic market opportunities and that importantly, there is interest amongst growers to develop exports. A strong viable industry and production base will need export growth for future survival. Key findings are: 1.1 Export Markets Profitability studies have shown that the Japanese market has potential to nett return 40c-86c per kg for the window April to September. Importers in Japan are interested in progressing import of Australian cauliflowers. There is a reasonably stable demand for fresh cauliflowers. Competition from China is thought to be a developing issue and over a longer period there could be export opportunities. Taiwan is also a market with potential as importers were keen to source more product following a trial shipment. Export infrastructures in NSW are a limiting factor and need to be developed at the production base. • Planning: Careful planning and market research is a priority and should be ongoing. Research should include a market profile A service directory is provided and it is preferable to work with export coordinators who have experience. Important variables to consider include freight rates, currency fluctuations, competitors, weather etc. Success will happen by being professional, and building positive customer relationships also beginning to export and building infrastructure, developing an identity (brand), avoiding simple mistakes, timeliness, providing a service and providing big volumes. • Networks and Alliances: The biggest opportunity to bring more growers into exporting and improve then- position in an export chain, will be achieved by working together, as networks and/or alliances, to provide consistency of product quality and scale of production. Developing networks or alliances with experienced export coordinators who are already exporting, is a means to getting started smoothly and will provide all the benefits of a coordinated approach to marketing. Two arrangements were initiated, a local Central West NSW network and an alliance between the Lachlan Valley Horticultural Network and Lockyer Valley Export Group to prepare two trial shipments. • Cultivar Evaluation: Possibly the most important decision a grower will have to make is what cultivar to plant. Cultivar performance will vary with district, management time slots etc. Cultivars are the single most important determinant of quality and are critical to meeting customer specifications. Cultivar evaluation needs to be ongoing as breeders continue to release new lines. Cultivars must not be only specification at harvest, but also after 15-21 days of sea freight storage time. Buyers need to visit farms to see cultivars and plant breeders also need to be kept informed. • Profitability: Grower profitability to justify development of the farm production base is also a priority and an "electronic model" has been developed to prepare budgets. Profit margins will always be challenged and economies of scale will be an important flow on from networking. • Export Chains: Five different export chains are described which require a coordinator, either a grower, packing shed, export agent, export broker or e-commerce. It is important to know industry structures, members and their roles in each chain. • Contracts: There is an opportunity to develop contractual arrangements as exists in the domestic processing industries. This will build confidence, relationships and improved relationships with the buyers. • Direct Sales: Going direct to supermarkets through a reduced number of intermediaries and europeanisation of supermarkets, offers opportunities; eg Japan - Justco, Taiwan - Walmart, Hong Kong - Park. • Specifications: Asian markets are particular about product quality and specifications. Producing to customer needs requires special care and consideration. • Innovation: There is a need to be aware of and evaluate developments in new innovations and styles of marketing eg E-commerce, video conferencing. • Trial Shipments: Trial shipments will develop awareness and experience of exporting and begin to build customer relationship. There may be a commitment to provide immediate follow up commercial shipments. Alternatively research and plan in advance and commence with commercial shipments that can be gradually built up. • Domestic Priorities: A strong domestic market base will be a priority, before exporting. 3 • Customer Relationships: Golden rules have been developed (Section /.1.3). There needs to be openness to ensure flow of information from customers through to plant breeders. There is no substitute for meeting and developing relationships with buyers in a professional manner. • Quality Assurance: A Quality Assurance program must be appropriate for customer
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