Avocados could be one the the next big exports for in New Zealand's agri sector.
Avocados could be one the the next big exports for in New Zealand's agri sector.
For some time now, kiwifruit and apples have led the New Zealand horticulture industry by developing billion-dollar businesses and exporting to all corners of the world.
Avocados have the potential to join that league and become the next super fruit — from New Zealand's exporting perspective — through increased investment in science and technology, says Plant & Food Research chief executive, David Hughes.
"What would really make a difference (to the industry) is to have more exemplars like kiwifruit and apples where a broad-based investment in science and technology was translated through to significant economic, environmental and social outcomes," he says.
"There's quite a few other sectors within horticulture where we could apply the same learnings. There's a set of quite interesting tier two crops in New Zealand which are more at the hundred-million-dollar level of industry. There's a capacity for those to be lifted up to the billion dollars."
Hughes mentions berries, cherries, hops, onions, potatoes and vegetable seeds as promising sectors, but plumps for avocados — nearly 3.8 million trays worth more than $110 million were exported in 2019-20.
"The avocado sector has been growing really strongly, and when you look at the approach taken to grow the fruit, we are a relatively small player in the world market — and I don't think anyone would say New Zealand is genuinely world-leading in the use of all science and technology on avocado.
"There's some great stuff that we could develop further. I'm not saying that the sector is not employing good practice; they are. But there's a real opportunity for avocado to go from being part of the mix to a genuine leadership position which we have for both apples and kiwifruit. We could be the envy of the world, as we are for those other two crops."
Cherries could be one of New Zealand's next biggest export crops.
Hughes says a quite substantive investment was required to change the way avocados are grown and take it from business as usual to world leading.
"But it's within our grasp because we've done it before on two other crops. We have already broken the mould and doing things in a different way that other countries have not yet been able to emulate and copy."
Hughes says berries and cherries are a bit smaller in scale but they are growing quite fast. Onions and potatoes are the other two that interestingly are around the $100m scale, and there's some interesting opportunities there.
"They are perhaps less exciting than the fruit crops, perhaps not as sexy and having that immediate eye appeal that avocado has, but onions and potatoes are pretty exciting crops with lots of potential.
"Hops has a high degree of potential and there's quite strong growth coming from that sector.
"There's ample scope in all of those for substantive science and technology and a return on investment — "really, a quite spectacular return if you get it right."
New Zealand's horticulture exports grew in value by almost 300 per cent between 2000 and 2020, earning $6.6 billion a year and accounting for 11 per cent of merchandise exports.
Hughes says apples and kiwifruit are the leaders of the pack with $2.5b of growth between the two. New Zealand has been voted by an independent assessor for a number of years as having the world's most productive apple industry, with its renowned Jazz and Envy varieties. And there isn't another kiwifruit producer/marketer structure that works as well as New Zealand's.
"You see that in the marketplace with the premium prices charged for the New Zealand kiwifruit and apple products and the level of returns that come back. New Zealand is doing something right in its horticulture industry, particularly for those two really big growth sectors."
Hughes says Plant & Food receives a lot of international visitors wanting to talk about how the industry actually works and how it achieves the results it is getting.
"My point of view is it's actually a really complex integrated thing. There's no single silver bullet. You're unlikely to spend a trip here and see, 'ahh, there's the magic secret; if only we had one of those, our industry would be miraculously changed'.
"And certainly, from a science or technology perspective, both the apple and kiwifruit industry have been investing heavily in science and technology for a long time. It plays out at all levels, right across the industry, from the proprietary varieties that are grown, the rootstocks they are growing on, the way the orchards are managed, all the way through to cool stores. It actually ladders up into a very sophisticated growing, marketing and distribution system and it's the way they mesh together that generates the results." Hughes says green kiwifruit is attracting an orchard gate return of about $60,000 per hectare, whereas gold kiwifruit is up at $160,000 a hectare.
"They are pretty much identical vines as you look at them from a distance, growing on the same structures and being managed broadly the same way. They are generating, for example, $100,000 per hectare and there's close to 8000ha of licensed gold kiwifruit production.
"That's $800m of gold kiwifruit value creation every single year. So, we'd be pretty happy if we produced a unicorn, billion-dollar industry every year — well, the kiwifruit industry does it. It's about that level of genuine value creation all year and every year which is a pretty impressive feat.
"And there's some great stories in the apple sector, as well. Rockit apples usually catch people's attention because it's a cute little apple. It's a pretty exciting commercial story, too, on how they've grown that company from nothing to significant value quite fast," says Hughes.
At present there is plenty of discussion about rejigging the innovation system to capture greater future value, and where Crown Research Institutes fit into the structure.
Hughes says one of the hallmarks of great Science, Development and Innovation (SDI) systems around the world is self-belief and self-promotion. "You see it in Israel's Start-up Nation, you see it in the Dutch Food Valley, and you see it in Silicon Valley. We need to emulate these exemplars in both our internal dialogues and our external positioning.
"We need to stop writing reports which start by listing all the things that are wrong with New Zealand and our SDI system. Instead, we need to celebrate where we already lead the world and present a confident, uniquely New Zealand take on a national SDI system."
Plant & Food believes a National Science Strategy should be set by a three-way coalition of Industry, Government and Research. Each of these groups should be empowered and enabled to act on the agreed strategy, and this would require changes in the funding system.
Hughes says there's a tendency in New Zealand for each of the players to go off and set their own strategy independently, and then all come together and argue whose strategy should trump others.
"I think we ought to be co-designing the national strategy for these sectors. The Dutch have their triple helix model where they actually bring together senior people from industry, government and science to jointly set national priorities.
"It's about people genuinely getting around the table and having the debate, committing to it and bringing the resources of their organisation and the broader sector.
"If we could get to a sort of co-development, co-commitment approach to strategy setting for some priority areas, I think it'd make an enormous difference for us. And for New Zealand, I would make it a quadruple helix, because I think we need Māori sitting at the table as well. They are a very significant part of the industry with interests in crops."
Hughes says there's a lot right with horticulture and there's a lot that New Zealand can learn over the way science and technology is integrated with the commercial players.
"They invest in the science and technology, the Crown Research Institute gets it done, and together we share the benefits of the value that's been created," says Hughes. "We use some of the money that's generated to reinvest and create more value — it's a sort of virtuous cycle of investment driving value. And, for me, that's a great exemplar of how science and technology, generally, could be creating much more significant value for New Zealand."
