Think Global, act local: growing your exports

The strong performance and continued development of food and fibre exports will be a vital component for the future growth of the Australian agriculture industry as it strives to reach the ambitious target of $100 billion in value by 2030. While other agricultural industries have seen significant growth through exports, the untapped potential of horticultural exports is an important avenue to increase agriculture’s value – and the vegetable industry will prove to be a key player for this increased growth.

In 2018/19, the vegetable industry produced a total of 253,000 tonnes of fresh vegetables for export, at a value of AUD$287 million. The vegetable industry has prioritised investment in developing the export capabilities and market opportunities for Australian vegetable growers, with AUSVEG delivering VG16061 – Vegetable Industry Export Program, a strategic levy investment under the Hort Innovation Vegetable Fund.

The vegetable industry’s export growth target is a 40 per cent increase in value to AUD$315 million by 2020 – the industry is well on track to exceed this target.

A big part of this success can be linked to the program delivered by AUSVEG, with its most recent independent review indicating that growers attributed $20.3 million in revenue benefits as a direct result of the program in 2018, producing a net benefit of $18 million and a return on investment of 882 per cent.

The program works one-on-one with growers around Australia to build their understanding of the exporting process and provides them opportunities to build business relationships and develop markets for their products.

One of the businesses that has been involved in the program is Austchilli.

Austchilli – think global, act local

Austchilli is a family-owned business founded by David De Paoli in Bundaberg, Queensland, over 20 years ago.

Austchilli is a privately-owned, vertically-integrated business that provides sustainable fresh and value-added products for local and international markets using state-of-theart business management systems. The business is the largest chilli company in Australia and started its export journey over 20 years’ ago with a single product in a single market.

Now, the business exports fresh chillies and value-added products, including its AvoFresh cold-pressed avocado range, to 12 countries across three continents.

According to Austchilli owner David De Paoli, the business had a strong export and value-added focus from the outset as part of its strategic plan and as a way to mitigate risk to grow the business.

“Back in the early days the retailers were a significant portion of our business – and they still are,” David said.

“But a realisation for me has been that we’ve got to act locally, but think globally – whether it is fuel and gas prices, or a natural event going through a specific area, even though we are growing produce in Australia we are all intrinsically connected, whether we like it or not.

“You have to open your mind and really think about the supply chain in that way so that you move past the farm-gate approach, and worrying about your domestic market as a survival tactic, to thinking about a strategic risk-managed export strategy.”

Remain flexible to remain relevant

A key aspect of thinking globally and acting locally is to concentrate on who is buying your product, what they want and being able to change to meet their expectations and demands.

“You need to do your consumer research for each country that you want to explore,” David said.

“One size does not fit all – because what consumers want tends to be very specific. I’ve got AvoFresh flavours that sell really well here that do not sell very well in other countries, as the flavour profile of their customers is different.

“You really need to understand your customer and take a staged approach – get your product over there with a partner, sense check it and do your consumer research.

“For example, the chillies we export are unique varieties that are specific to the countries where we export. We don’t just do the red cayenne chilli, which is your standard everyday chilli in Australia.

“These markets look for unique products and consistent supply, as their customers’ tastes can change very quickly – this is why you need to remain flexible to remain relevant.”

The two Ps – Persistence and Patience

While Austchilli has been in the export space for over 20 years, it still abides by the same principles that has resulted in its successful export journey – develop relationships, remain competitive, deliver the best-quality service, innovate and stay ahead of the competition.

“You need to understand that export markets are slow to develop and take a lot of time – you’ve got to go back and revisit and revisit and revisit and build trust. Once you’re there and you have that trust, they want to do more business with you,” David said.

“If they want one box in one A.V. to start with, that’s where you start. It’s generally a small base and you build it slowly. Your growth curve may only incline slightly for a couple of years, and all of a sudden, the trajectory goes north because you’ve built that trust and they want to do more with you.

“Export is a marathon, not a sprint.”

According to David, it is important to remember that there are people out there who can help, including the Export Development team at AUSVEG that delivers the Vegetable Industry Export Program.

“What I like about the AUSVEG export program is that it is a soft entry,” David said.

“So, for example, in the markets we are active in there are two main benefits from this program. We look to AUSVEG around leveraging our existing demand chain so that we can find new potential buyers for our products.

“The other side is that when you do a soft entry you can go onto a platform where you can showcase your products, engage with lots of people and come back to your business with a taste of what the opportunities are.

“You do a trade show with AUSVEG and you get a feel for it, you get a taste for it and you engage with potential customers and see what they are looking for.”

Growing the vegetable pie

It is these same principles – persistence and patience – that has helped the broader industry work with many growers across the vegetable category to boost the value of the overall industry.

According to AUSVEG National Manager – Export Development Michael Coote, the strategic approach to building fresh vegetable exports will undoubtedly pay dividends.

“The vegetable export sector is in a unique position to experience sustained growth as a result of the work that AUSVEG, Hort Innovation, AusTrade and exporting growers have done in the last five years,” Michael said.

“Horticulture industries that have a high export value, for example citrus and table grapes, have achieved this growth in part because the industry has invested in a long-term, strategic approach to obtaining market access, and growing and supplying specific markets.

“As the vegetable industry includes a wide range of different crops, all with different dynamics affecting trade, it is important that we take a whole-of-industry approach to grow the entire vegetable category. There are many opportunities that exist for specific vegetable products and value-add opportunities, which is why the industry’s efforts have focused on delivering a program that has multiple elements to benefit growers at different stages of export maturity.”

The benefit of the Aussie brand

The vegetable industry is poised to take advantage of increased demand for high quality Australian product that is supported by a well-coordinated, strategic industry approach to exports and the strong reputation of the Australian brand.

But while Australian product has a strong global image, at the end of the day growers need to be competitive in an increasingly global market to survive.

“The Australian brand has a great level of credibility, but it is not going to make you sell your product just for the sake of having the logo on it, we’ve got to be competitive on price,” David said.

“If our competitors are growing a good quality crop with a good price that you can’t get close to, don’t waste your time.

“So if you’re in a commodity where you can’t grow at a global price, look for a value-added option and chase that market, because the reward is going to be much better.”

Helping the world taste Australia

Efforts by Hort Innovation to promote Australian fruits and vegetables in key export markets through the Taste Australia initiative are also proving to be beneficial in growing the value of horticultural exports.

“Australians are well-known throughout the world; there hasn’t been one country that I have been to where I wasn’t welcomed. Anyone of any ethnicity will come up to you at a trade show and want to talk to you because you’re Australian – Taste Australia does a great job at marketing that and leveraging it to the benefit of our growers,” David said.

“It welcomes discussion and welcomes opportunities, as the credibility of Taste Australia allows for a lot more free-flowing conversation. This can lead to people seeing our product and wanting to know how they can get our products on their shelves.”

But at the end of the day, it does not matter what people think of Australia as a brand, the most important selling point as an industry is to be able to supply enough quality product at a competitive price to satisfy international buyers.

“From an export serviceability perspective, you need to be there all the time and you’ve got to build trust. It is a slow build and it takes persistence and patience to secure these markets, but the effort is worth it,” David said.

Where should I start if I want to export?

“You can also think of your export journey in stages. For example, stage one as an exporter can be to chase a developed market – it’s mature, the infrastructure is there and the know-how is there,” David said.

“But as you evolve, you can then look to chase the developing markets once you have more fiscal capability, as they are younger, growing and offer much higher rewards.

“There’s a lot that you learn as you go, but there are a lot of people out there who can help you so that you make fewer mistakes.

“The AUSVEG Export Development team has a good grasp on what is available to growers and how they can provide advice, so I would recommend anyone looking for more information to get in touch.”

Find out more:

For more information, please contact AUSVEG National Manager – Export Development Michael Coote on 03 9882 0277.

Vegetable Industry Export Program

The vegetable industry’s export development project, a strategic levy investment under the Hort Innovation Vegetable Fund, aims to improve the capabilities and capacity of the Australian vegetable industry so that it can increase vegetable exports.

The program is delivered by AUSVEG and involves a range of activities, including:

• Export readiness training for growers looking to commence exporting and those looking to improve exporting performance.
• Market development activities including a combination of inbound and outbound trade missions to build growers’ understanding of export market supply chains and facilitate connections with international fresh produce buyers.
• Working with industry, Hort Innovation and government to prioritise market access for vegetable products.