Plenary session 4 building value through the supply chain - a blueberry case study - ridley bell
The Australian Blueberry Industry An Attempt to Build International partnerships And Building Value To Supply ChainsA Brief HistoryThe first Australian blueberries were marketed at the Victorian Wholesale market in January1976. A dozen 12 punnet trays of 475 gram punnets from Research and Developmentplants at the Horticultural Research Institute, Knoxfield were taken and offered to a number ofmerchants. Despite their popularity in the United States, blueberries were unknown inAustralia, and not one agent recognized them at that time. I suspect that the Macadamia storymight have some parallels with this in terms of public recognition at the same time.A program of raising seedlings brought in from the University of Michigan breeding programhad been initiated in the early 1970’s, and from that program, a number of Knoxfield selectionswere released (very quickly, under pressure from potential blueberry growers) to nurseries forpropagation. From those releases, by far the most successful variety released was Brigitta,which is still the most popular variety planted in Southern Australia, and is still grown today inthe Americas and Europe.The harvesting season for the industry in the Southern States was from December throughuntil February, using local selections and varieties imported from the U.S.It became very clear that there was a “window of opportunity” in the Northern Hemisphereblueberry market between the end of the season in Michigan in early September, and thecommencement of production in the Southern Hemisphere blueberry producing countries ofNew Zealand, Chile, Argentina and South Africa. A similar “shoulder” also existed in Northernhemisphere Markets from late February, at the end of the Southern Hemisphere season, untilmid April when the Florida growers commence production. Even today, these two shouldersare still the highest priced periods in the markets. What was apparent as an opportunity inseasonality and export for blueberries again had a parallel in macadamias with the recognitionof the potential to export.Varieties were imported from Florida and Georgia in the late 1970’s and from these trials weremade to identify the earliest varieties that could fill the export September – October window ofopportunity from Australian growers. The industry in Northern NSW began to flourish in theearly 80’s with corporate farms in the Coffs Harbour region, and by 1986 the industry thereaccounted for a high proportion of the Australian production.The two year quarantine for bringing in blueberry varieties may be an issue for the impatient,however, it has had some interesting positive consequences. To date there have still not beenany viruses of blueberries identified here. Until 2003, blueberry rust, had been kept out ofAustralia, meaning that most of the varieties tested had kept their leaves over winter and thisevergreening affect led to earlier producing plants. Trials with winter fertigation led to thedevelopment of a practice now followed in many parts of the world and known as
“evergreening”. Particularly when grown in tunnels and in very dry climates, evergreeningallows the plants to produce fruit very early and a long season of production became possible.The Australian Blueberry Growers AssociationThe peak body representing blueberry growers in Australia is the Australian Blueberry GrowersAssociation, with 150 members ranging from small organic growers to the large corporategrowers. The ABGA funds its promotions and research and development programs with avoluntary levy .Members of the ABGA rejected the notion of a statutory levy for a number of reasons,including the fact that it did not have the teeth to levy fresh imports from New Zealand andfrozen imports from Chile, Canada and China, as is the case with the North AmericanBlueberry Industry. It was considered by the members that by having a voluntary levy, of 30cents per tray, this would give the industry much greater flexibility in deciding its own fundingpriorities. The levy raises in excess of $230,000 each year, and is supported by all majorgrowers and, representing over 80% of the industry.Since its inception about 5 years ago, the levy has been used to fund an annual promotioncampaign as well as various Research and Development priorities. The marketing subcommittee contracts with a promotions group to provide various marketing strategies, includingin store promotions, getting blueberries into people’s mouths, the most effective way ofincreasing store sales. Also, there are promotions at food and wine festivals, advertising, torchdisplays in front of shopping centres and contributions to newspapers and magazines.Blueberries are reported to be the fastest growing fresh produce product in both majorsupermarket chains over the past year, and this has obviously been helped along by thearticles that keep popping up in newspapers and magazines about the health benefits ofblueberries. Supermarkets are reporting a surge in demand for convenience food, with onechain reporting that 65% of shoppers in its stores now use hand baskets rather than trollys.People are visiting the stores more frequently to purchase fresh and choose products such aspunnets that suit shopping baskets.The Research and Development budget is important in the funding of the following areas : Market access issues, both domestic and for export markets Chemical registrations and supporting research towards providing the APVMA with data Some research into cultural issues. An example of this is the current research projects being carried out on the effects of biochar from waste organic materials on soil health.The North American Highbush Blueberry Council has a research and development budget inexcess of $US1 million annually, and the highest proportion of this is spent supportingresearch at both scientific research centres and medical research centres into the healtheffects of the various phytochemicals in the blueberry. The growth in consumtion of blueberriesin the US and worldwide has been a direct result of the research data becoming widelypublicized that blueberries are a very healthy food. Perhaps more can be done along theselines to assess and promote the health benefits of macadamia nuts.
MARKETSThe blueberry industry in Australia has three primary market targets … fresh domestic , freshexport and process. The proportion going to export and to process varies from season toseason depending on local domestic supply and prices, and can be used to divert fruit fromthe local markets to reduce the pressure on prices caused by large volumes of fruit.DOMESTIC MARKETS … one of the strengths of the industry has been the co-operation ofmany of the growers in marketing. Rather than going into the wholesale markets andsupermarkets and cutting prices, more than 80% of the domestic product is marketed throughthe Costa / Driscoll group, and with the fact that this group is also strong in other berries, thishas meant that the industry has maintained some control over pricing and supply. With supplyfrom both the northern, lowchilling areas and the southern states, as well as good results frommodified atmosphere storage at the end of the southern season it is possible for the AustralianBlueberry Industry to supply the domestic market for close to 10 months of the year. Co-operation within the industry has been a strength that should be investigated even at at aninternational symposium such as this.With local breeding programs pushing for earlier varieties in the north and lateness in theSouth, the “holy grail” is to have a 12 months consistent fresh supply of blueberries, muchsought after by the supermarkets. The local breeding programs of both Mountain BlueOrchards (MBO) and BerryExchange (BX) have also had a much stronger emphasis onconsumer qualities than many of the varieties developed in the United States. With theAustralian blueberries, the most important qualities that attract the consumer are as follows Taste … the flavor range of blueberries is quite wide, varying from strongly acid to high in sugar. A balanced sugar to acid ratio is the aim., there are some blueberry varieties currently on the market that are either acidic or mealy, and they bring a lower price when other varieties are available. Taste is most important. Crispness … With a number of convenience fruits now, such as cherries and grapes, there is a consumer preference for fruit that pops or crunches, and with blueberries there are now varieties developed in Australia that have this characteristic. It is one of the reasons that the Australian varieties are so sought after in overseas blueberry growing areas. Size … there is no doubt that the consumer has a preference for larger berries, with a strong bloom, that present well in the punnet. At MBO, we have developed a number of “jumbo” varieties that average between 4 and 6 grams per berry, compared with most of the public varieties and some of the varieties grown around Coffs harbor that average between 1 an 2 grams per berry.Our experience in the blueberry industry is clear and simple, and applies equally tomacadamias as well as anything else … marketing a good product and presenting it well, willbring a premium in the market, and have retailers asking for the brand in preference to others.
So far this season, we have again proved the fact that if the fruit presents well, and has beenproperly picked, packed and cooled, that it will bring a premium price in the market place.Growers that have taken a short term view and planted varieties that may be early, but havepoor consumer appeal,, will learn the hard way that the Supermarkets will only stock theirproduct when they are desperate due to a lack of quality fruit on the market.We have been accused on occasion of going overboard on quality, however, at times duringthe season last year, when there was a significant pressure on the prices because of volumeand poor quality fruit in the market, , MBO fruit stayed in high demand, and held a premiumprice always. We encourage our pickers to taste sample the fruit and get to know what a goodquality, properly ripe fruit looks like, and then to go and pick only quality berries. I am sure thatthis principle holds just as much for macadamias as it does for blueberries.Despite the fact that there are supermarket standards that allow for a certain percentage ofblemished fruit in a punnet, in our packing shed, we have a zero tolerance for blemishes andsoft fruit. We have a premium label, and another label that we pack into when the fruit quality issuspect due to conditions beyond our control, such as rain affected fruit. We track fruit traysin the shed to the individual picker. We have a policy that is enforced with the pickers, that ifthere are reports back from the packing shed about the fruit quality of an individual picker, thenthat person is shown again how to pick quality, however, if they continue to pick poor quality ,they are asked to leave. We pay higher harvest rates than most other growers, however, wehave savings with the quality in the packing shed, and we achieve better prices in the marketplace.Picker training in good hand picking methods is the key to blueberry quality. I suspect that inthe macadamia industry, the key to producing a “top shelf” product lies with the grower and theability to develop quality systems of harvesting and cultural practice.OVERSEAS MARKETSAustralian blueberries are exported to Asia, and to the UK in our unique window of opportunity,before fruit from Chile causes the prices to fall, due to the fruit being cheaper, and this largelydue to much lower labour rates.The Australian varieties are sought after by retailers, because the fruit is better flavoured, withgood firmness and bloom. On Blueberry Breeder “get togethers” with overseas breeders, aswe all walk through seedling fields looking at new possibilities, it becomes obvious that mostof the breeders look at non flavor characteristics such as productivity or fruit size, whereas, wetry the blueberry for flavor and texture, and if it doesn’t taste good, there is no use in persistingwith that seedling. I am sure that it should be the same in the macadamia industry, with buyersidentifying the most consistent and best quality product, paying a premium for it with a loyaltydeveloping to that brand. Varieties developed by both MBO and BX have been so much in demand in the UK thatMarks and Spencer invited the two companies to form a partnership with local strawberrygrowers, Agrogailes, in Morocco to grow and supply fruit from those varieties into the UK
market in the March early April period, the reverse season to here. A registered company ,African Blue S.A. was formed under Moroccan law, and the third harvest has just beencompleted, and successfully marketed into the United Kingdom. This is a clear example ofwhat can happen if you have a premium product … the world will come to you.BX and MBO both formed alliances with American companies to grow their varieties in bothCalifornia and Mexico. BX licenced their new varieties to the big American berry company,Driscolls. MBO licenced their new varieties exclusively to Family Tree Farms, a large stonefruit and corn producer, whose commitment to quality very much matched where MBO wantedto be aligned in the market. FTF will licence exclusively MBO varieties from Australia, and willpay an ongoing “production royalty”, based on yields and market returns. I understand thatsome of these collaborations with overseas producers are already happening in themacadamia industry, and this can be of very significant benefit to all parties.Joint ventures and licencing possibilities are being looked at by both companies in variousAsian localities and also in South America.In the blueberry industry, BX and MBO have both recognised the importance of breeding forsuperior plants and fruit quality to gain a strategic market edge. The Australian macadamiaindustry may have similar goals to be recognized and to differentiate itself from other growingnations. This differentiation could well come from improving all farm practices, particularlythose that affect nut quality, by careful selection of suitable varieties to grow, by high qualitystandards set in the processing factories and by the development of new “value added”products that can be marketed.PROCESSING AND MACHINE HARVESTCurrently there are not a lot of blueberries that are harvested by the big “over-the –row”harvesters for the fresh market retailers , due to the softening affect on the berries, the loss ofbloom and the poor shelf life. In the US there are some supermarket chains who will not acceptfresh blueberries that have been machine harvested.In Australia, the process market stands at about 2500 tonnes, however much of this comesfrom Poland, Chile and to a lesser degree, China. Even with the help of machines to harvesthere in Australia, the margins are lower because of higher labour costs and the high Australiandollar value.FUTURE GOALSEach and every grower or processor in the audience should have a clear picture of what theirgoals are for the future, in order to give some planning direction to the business. . I haveoutlined here in conclusion what I consider to be our goals at Mountain Blue Orchards in theforeseeable future. • Further develop and expand international relationships
• Invest in Southern Australia to increase availability of MBO fruit throughout the season from January to April • Continue to invest in blueberry breeding with the goal of selecting highly flavoured, jumbo varieties, for subtropical localities in Australia and worldwide. • Continue to evaluate and develop best practice cultural methods • To plant 100 hectares of new premium varieties on land recently purchased at Tabulam in New South Wales. • Help maintain domestic relationships to ensure market quality and protection • Further investigate promotion opportunities to ensure demand is maintained within domestic marketWritten by Ridley BellMountain Blue OrchardsLindendale, NSW.…