Custard Apple Industry Strategic Plan by lzn15439

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									    Custard Apple
Industry Strategic Plan
       2006 - 2011




            Prepared by ACAGA and HAL
                            March 2006




                                     1
                               Contents




Introduction                                   3

Executive Summary                              3

Strategic Intent                               4

Our Preferred Positioning in the Marketplace   4

The Critical Success Factors                   5

Objectives & Strategies                        6

Appendix 1: Industry situation analysis        8

Appendix 2: SWOT analysis                      20

Appendix 3: Issue analysis                     22




                                                    2
Introduction
This strategic plan was developed by the Australian Custard Apple Growers Association
(ACAGA) Management Committee (which provides the functions of the Horticulture
Australia Limited Industry Advisory Committee) in consultation with Horticulture
Australia Limited (HAL).

The planning process commenced in February 2005 with the development of a situation
analysis. From this, the key issues were agreed and draft strategies developed.

The key issues were discussed with growers through a series of industry consultation
meetings during 2005 and confirmed that the key issues identified were in line with the
broader industry’s understanding and expectation.

A draft plan was developed by HAL based on the input provided from industry. At a
meeting in February 2006 with the ACAGA Management Committee, the draft plan was
reviewed through a workshop process and the final document agreed.


Executive Summary
This plan has been developed to provide strategic direction for the Australian custard
apple industry over the next five years. In particular, the plan will be used to provide
direction for the HAL custard apple R&D and marketing investments.

It has been developed as a fairly simple but high level plan which addresses the priority
issues and strategies for the industry. It is intended that this plan will be reviewed
regularly and specific actions will be considered and implemented on an annual basis.




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Strategic Intent
To provide consumers with a unique product, utilising innovative production systems
thereby maximising grower profitability and sustainable industry expansion.



Our Preferred Positioning in the Marketplace
 Benefits to Consumers:                                     Unique and creamy texture with a sweetness
 (the consumer benefits that custard apple will deliver –
 the industry’s value proposition to consumers)             unlike any other.
                                                            A desert product available in the cooler months
                                                            when few other desert fruits are available.
                                                            They are easy to digest, contain no fat, have low
                                                            GI, contain plenty of Vitamin C and have low
                                                            acid.
                                                            Exotic image
 Domain:                                                    Health and well-being
 (the areas of consumer interest in which industry will
 seek opportunities to make sales)                          Pleasure and indulgence
 Target Markets:                                            Australia – Asian consumers and high income
 (the Australian and overseas markets/market segments
 in which custard apples are to be sold)                    non-Asian consumers, potential food service
                                                            Overseas – Predominantly Asian markets, also NZ
                                                            and middle east
 Product Scope:                                             Fresh whole – loose, packaged
 (the nature and range of products to be offered)
                                                            Value-added/processed
 Competitive Advantage:                                     Unique, exotic dessert product available during the
 (the strengths and uniqueness of the products and/or
 industry relative to others)                               cooler months
                                                            Superior quality product compared with
                                                            international competitors
                                                            United and well-organised industry with funding
                                                            for R&D and market development
                                                            World class industry R&D program




                                                                                                        4
The Critical Success Factors (for accomplishing the outcomes wanted by the Australian Custard
Apple Industry)


     Production of increasing volumes of high quality fruit
     Effective supply chains delivering product that meets consumer requirements
     Highly skilled research and development capability
     Profitable farming enterprises
     A cohesive, industry with highly effective communication systems




                                                                                                5
Objective 1 – Achieve measurable growth in viable domestic and export markets

Strategies
1.1       Conduct research in conjunction with key stakeholders to identify new viable
          markets (domestic and export) and understand their supply chain requirements
1.2       Develop promotion and consumer education programs in target markets
          (domestic and export) to increase awareness and demand for Australian custard
          apples
1.3       Ensure effective communication and education through all sectors of the
          supply chain to deliver products that meet consumer requirements
1.4       Develop new rootstocks and varieties that produce consistent crops of high
          quality fruit
1.5       Support and encourage the commercial development of new innovative custard
          apple products to support new markets and increase consumer awareness of
          custard apples
1.6       Encourage increased plantings from existing (and new) growers to support
          market growth

Key performance indicators
       New viable market destinations identified by 2008
       Increased awareness of custard apple in Australia by 2008 as measured by
       consumer survey
       Increased export sales (by value) through marketing groups by 20% by 2010
       Increased domestic sales (at stable prices) by 20% by 2010
       One new improved variety or rootstock commercialised by 2010

Objective 2 – Develop production and marketing systems that deliver improved
production efficiency, product consistency and consumer satisfaction

Strategies
2.1       Develop new rootstocks and varieties that produce consistent crops of high
          quality fruit
2.2       Develop production, harvesting and marketing systems for new varieties
2.3       Establish base line data on current IPDM, irrigation and nutrition management
          practices
2.4       Continue to develop effective and sustainable Integrated Pest and Disease
          Management strategies
2.5       Improve irrigation, nutritional and environmental management and
          efficiencies for consistent, higher yields
2.6       Monitor changes with fruit fly management to ensure postharvest treatments
          can be avoided
2.7       Educate retailers how to best handle the product for optimum presentation to
          consumers
2.8       Identify inefficiencies in major custard apple supply chains (paddock to plate)
          and develop and communicate best practice guidelines for supply chain
          management to ensure clear responsibilities and accountabilities along the


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          supply chain
2.9       Improve information about product flow (volumes, timeframes) through the
          marketing channels
2.10      Monitor domestic and export packaging requirements to determine the best
          packaging for optimum fruit quality and cost effectiveness

Key performance indicators
       Increased adoption of IPDM as measured by field day survey in 2010
       Improved irrigation and nutrition management as measured by field day survey in
       2010
       Improved product quality at retail level measured by retail surveys
       Recommendations developed for supply chain improvement by 2010


Objective 3 – To provide strong industry leadership through a motivated industry
body

Strategies
3.1       Form a liaison with similar sized industries and representative organisations to
          address across-industry issues
3.2       Gather and maintain reliable statistics on grower numbers, tree plantings,
          varieties, production, returns and cost of production for sound industry
          planning
3.3       Improve communications to growers to encourage industry involvement and
          keep up with new developments
3.4       Strengthen industry membership to ACAGA to provide a stronger industry
          voice and sufficient funds to resource appropriate representation
3.5       Seek additional funding methods for industry development and agripolitical
          activities
3.6       Develop a custard apple biosecurity plan to ensure industry is adequately
          prepared for potential pest and disease incursions

Key performance indicators
       Similar sized industry liaison established by 2007
       Reliable industry statistics database in place by Dec 2007 and then reviewed
       biennially
       Member satisfaction of 80% determined by survey issued with 2007 membership
       renewal
       ACAGA membership at 75% of production by 2010
       Custard apple biosecurity plan in place by December 2007




                                                                                         7
Appendix 1: INDUSTRY SITUATION ANALYSIS

Introduction
The information in this Industry Situation Analysis is presented to assist the
Australian custard apple industry to establish its strategic priorities for the next 5
years. An industry situation analysis is an important tool for identifying the key
issues, opportunities and challenges that need to be addressed by industry
working together. The past and present circumstances of the industry, the
attitudes and ideas of industry participants and key stakeholders, and emerging
opportunities and challenges all need to be considered.

Customers and markets
Products Marketed
The main varieties of custard apples are Pinks Mammoth, Hilary White (a sport of Pinks)
and African Pride. Since the release of new varieties by QDPI in 2000, there have been
small plantings of Maroochy Gold. There have been significant plantings of KJ Pinks, a
self pollinating sport of Pinks Mammoth controlled by ANFIC.
Of the total custard apple production, about two thirds is made up of African Pride with
about one third Pinks Mammoth.
With increased plantings of KJ Pinks, there will be increased Pinks Mammoth on the
market. Depending on the quality of this fruit, this may be a good thing or a bad thing.
It is hoped that the breeding program will produce better varieties with self pollinating
characteristics, smooth skin, sweet, large and longer self life that doesn’t blemish easily
and is disease resistant. We can then take the market by storm!
Products marketed are whole fresh fruit only. Currently there is no commercial
processing of custard apples.

Two major marketing groups exist: The National Jadefruit Custard Apple Marketing
Association Inc (J-CAM) and The Avocado Marketing Co-op (AMCL). These are
discussed in detail later.


Consumers

In the first half of the 20th century, custard apples in Australia were almost unknown
outside of Queensland. In the 1970’s with the influx of Asian migrants and the “sea
change” of city dwellers heading to the country, the production of custard apples
increased and fruit appeared on southern markets. Asians were the main consumers, with
the average Aussie preferring more well known fruits like apples and pears.
Awareness and knowledge of custard apple is low in many parts of Australia. A quarter
of people outside Queensland do not recognise the fruit and 37.5% having never tasted it.

Consumers have poor knowledge of how to buy, ripen and prepare custard apples, except
the Asians, who “ripen them in the rice”.


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Consumers cannot identify different varieties, but there is a general preference for Pinks
Mammoth.
There is significantly higher consumption among the Asian population and older
population.
The majority of users see the fruit as an occasional purchase with 62% eating no more
than once a month.
It is consumed as a fresh fruit on its own and in recipes across a broad range of time and
occasions.
It is considered a high risk, impulse purchase.


Domestic markets

As custard apples where first planted in Queensland, the fruit mainly was sold on the
Brisbane market or locally where it was grown. People in their 60s and older recall how
they ate custard apples often as a child and even had a tree growing in their back yard.

With the increase in Asian immigration in the 1970’s and since, the demand in other
cities has increased. A smaller variety of custard apple, sugar apple (annona squamosa),
is grown in different parts of Asia. It is sweet but small and very seedy. The new
migrants knew the fruit and were astounded at the size, flavour and few seeds in the ones
available in Australia. The industry had an instant market.

The Sydney wholesale market has received about 50% of the product, Brisbane and
Melbourne about 22% each. A small quantity is marketed in Adelaide and very small
quantities in Perth. Significant quantities are forwarded between markets.

Production has decreased significantly from 1998 to 2003. The following table shows the
change in production and market distribution based on LRS levy collection figures.
Figures for Melbourne, Perth and Adelaide are questionable – figures from market
sources show higher throughput. It is believed that the main factors contributing to the
downturn are drought, ageing growers, consumer resistance to African Pride and changes
to the Australian taxation system.

Production over the past four years has been relatively stable.


Market                  Cartons                                            Change
                        1998                      2003
Sydney                  179,300                   150,115                  - 16%
Melbourne                67,600                    49,907 (53,896market)   - 26% (- 20%)
Brisbane                 59,000                    61,264                  +3%
Adelaide                  8,900                     4,230                  -52%
Perth                     4,900                      4,427                 -10%
TOTAL CARTONS           319,700                   269,943                  - 15.5%


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TOTAL TONNES             2,557                2,041
Source – Extrapolated from Levies Revenue Service levy collection figures

Quality of the product is still variable but the 2004 season saw the quality vastly
improved. This was probably due more to climatic conditions in the season than anything
else.

In the Melbourne market, demand has strengthened and prices slowly increased over the
last 4 years. Pinks mammoth are preferred if available but Prides return good prices
when the Pinks supply has gone.

In the Sydney market, Pinks are definitely preferred and Prides only return good prices at
the end of the season when supply is very low. It seems more poor quality fruit is sent to
the Sydney market – it has become the “dumping ground” for poor fruit.

In the Brisbane market, demand and supply have slowly increased over the last 4 years
Pinks mammoth are the preferred variety and prices for Prides are quite low when Pinks
are available. However, as soon as Pinks are not available, the demand for Prides pick up
and prices increase substantially. Once dubbed the “dumping ground”, Brisbane now has
a reputation for good quality fruit being available.

Some fruit is sold on road side stalls and in local flea markets, although a lot of this fruit
is 3rd grade fruit which would return very little at the wholesale market. Some fruit
would be sold directly to local fruit shops but the vast majority is sold through the main
wholesale markets. Little if any is sold directly to the chain stores.

Wholesaler/retailer market research conducted a few years ago revealed only about 20%
of the product was sold through supermarkets. 80% was sold through fruit barns and
small fruit shops.
The fruit has a low profile at retail level.
Storage and handling problems are prevalent in domestic supply chains resulting in poor
quality fruit available at retail.
Prices fluctuate throughout the season and from market to market.


Export markets

Figures on how much fruit is exported are still not available. Quantities exported by J-
Cam are down compared to 5 years ago but prices are higher. There has been a closing of
the gap between domestic and export prices in recent years, possibly due to better quality
fruit being sold domestically. Virtually no Prides are exported by J-Cam now although
they were in the past. This is because orders were too small and irregular and prices paid
were only marginally above domestic market prices. Both varieties are bought off the
market floor in small quantities and exported by exporters.



                                                                                           10
The strengthening A$ has reduced the quantity of fruit being exported.
The main export market is Singapore, which is considered fairly saturated. Export to
Hong Kong has reduced dramatically since the island was handed back to China,
probably due to many wealthy Chinese who bought the fruit, have left the island. Also,
linkages with traditional importers no longer exist. There are some exports to United
Arab Emirates. Exports to Kuwait virtually ceased after the first Gulf War.

Other potential countries for exports have quarantine restrictions due to Qld Fruit Fly.
Market Access into USA, New Zealand and Taiwan using irradiation has been instigated.
The NZ submission will be considered first – probably in 2006. The USA submission
may take a few years. The Taiwan submission is held up as the Taiwanese authorities
decide on the acceptability of irradiation.


Competitors and the nature of competition

Custard Apple Producers

Taiwan is the largest producer of custard apples, producing about 5,000tonnes per year.
About half of these are sugar apples and half atemoyas, similar to African Pride. Almost
100% of their crop is sold in Taiwan and is counter seasonal to Australia. If their crop
increases, they will be looking to export to China and perhaps South East Asia. Their
production is believed to be stable at present.

Spain, Brazil and Chile all produce cherimoyas, with Spain exporting to Europe. A small
quantity of atemoyas are produced in Chile and Brazil. The Brazil industry is expanding.
Chile exports to USA and Japan, but the industry is believed to be contracting.
The Cherimoya industry in New Zealand is all but extinct. An atemoya industry exists in
southern China. It is unknown if there is any commercial production of custard apples in
Southern Africa.

Consumer benefits

Custard apple is predominantly a ‘cold season’ fruit available from March to October,
peaking from April to August. It is a unique product to Australia.
They provide variety from the more common fruits on offer during the colder months.
They are a soft fruit with intensely sweet flavour
They are easy to digest, have low GI, contain plenty of Vitamin C and have low acid.

Alternative products
Competitors include other winter tropicals and exotics, as well as sweets/desserts –
early/late season mango, early season summerfruit, papaya, mangosteen, persimmons and
durian, ice-cream, yoghurts, etc.




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Barriers to consumption
They are a high risk purchase that takes a degree of commitment to purchase and prepare.
Being an exotic, they make a change from the ‘boring’ fruit on offer during the colder
months.
The fruit is troubled by issues of skin blackening, short shelf life and ‘grittiness’.
It is often not available in stores.

Ease of entry
Entry into the industry is relatively easy. However, planting material is in limited supply
due to lack of rootstock seed. Capital infrastructure required is low compared with other
industries.

Operating Systems

Marketing systems and structures

Custard Apple producers are price takers. The industry is dominated by smaller growers
who pack their own fruit and market them through wholesalers.

Two major marketing groups exist.

1. The National Jadefruit Custard Apple Marketing Association Inc (J-CAM).

This group formed in 1999. It is an umbrella group for the Sunshine Coast (SSC) J-CAM
Association Inc and NSW J-CAM Association Inc.

The SSC J-CAM has members from Tolga, Central Qld, Maryborough and the Sunshine
Coast. This group deals mainly in Pinks Mammoth. Each grower packs their own fruit in
J-Cam branded cartons under specific Quality Assurance requirements. They have a
marketing co-ordinator who co-ordinates export orders and gives advice on domestic
market prices and trends. The marketing co-ordinator gathers statistics each season.

The NSW J-Cam has members all from the Alstonville/Lismore region of northern NSW.
They have their own marketing co-ordinator who concentrates on the domestic market.
This group deals mainly in African Prides. The domestic brand is “Sweet Nature” and the
export brand is “Jadefruit”. Both these brands are trademarked.

2. The Avocado Marketing Co-op (AMCL)

This group based on the Sunshine Coast have a custard apple marketing section that
markets under the brand of “Sunfresh”. They pack their own fruit to a set standard and
have a marketing co-ordinator that directs where their fruit is sent. They export Pinks
Mammoth.



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Promotion and market development

Prior to the implementation of the marketing levy in 2002, the only custard apples
promotion activity was through the NSW custard apple group of the Exotic Fruit Growers
Association. A voluntary levy from NSW growers funded supermarket taste test and
merchandising programs for about 6 years from 1988 to 1994.

Once Horticulture Australia Limited (HAL) was formed, it made it economically viable
for small industries to run a marketing program. A marketing levy of 20cents a carton
was implemented in 2002 and a marketing program commenced in 2002 with consumer
leaflets being developed, a PR program implemented and a Retail Development program
commenced.

HAL runs all marketing programs funded by the national marketing levy. The levy was
adjusted in 2004 so that more funds went to R&D and less to marketing to fund the Retail
Development program. A Public Relations program has had excellent results. An
Influencer Program has had positive feedback but some question its long term benefits.
Levy funds collected for marketing are very small which limits the scope of promotion
activity.

If there is a decrease in production in the next few years, this could impact considerably
on the R&D and marketing programs as there would be reduced levies collected. Liaison
with similar sized industries may be an important consideration in the future.

Production Systems and processes

Custard apple production is highly labour intensive. Minimal mechanisation is possible
due to the delicate nature of the product. Consequently, production units are relatively
small and intensive.

The recent development of the KJ Pinks variety is expected to result in a significant
improvement in production efficiency.

The use of new tree training systems including trellising is currently under evaluation.

Current R&D is focused on improving productivity and quality.


Industry organisation and performance

People

The majority of custard apple growers are in the over 50’s years of age range. Some new
younger growers have entered the industry and some have taken over family farms.

Location and extend of production



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Custard apples are produced predominantly on the Queensland and northern NSW coast.
Market throughput data indicates production is static or in decline. However, new
plantings of KJ Pinks are occurring. (insert data from Birdwood when available)

Pinks Mammoth Custard apples were first grown in the Redland Bay area of Queensland
in the late 1880’s. African Pride custard apples were introduced into the Bundaberg
region from East Africa in the 1950’s. The industry was seen as a cottage type industry
until in the late 1970’s/early 1980’s when there were large plantings of African Pride in
Northern NSW and Central Queensland. The industry grew steadily and tree numbers
peaked in the mid 1990’s. There were about 450 growers at this time. Many of these were
very small growers with only up to 100 trees. Many were also growing other crops and
custard apples were a very secondary crop.

In the 1980’s, a small group of growers in NSW attempted developing a Cherimoya
industry. Fino de Jete and El Bumpo were the main varieties planted. Unfortunately, at
about 10 years of age, the trees developed an uncontrollable anthracnose and died.

As of the end of 2004, the ACAGA data base showed;
No. of active custard apple growers – 259
No. of inactive custard apple growers – 77
No. trees in 2001 – 68,629
No. of trees 2003 – 63,642
Production 2001 – 241,922 trays
Production 2003 – 229,730 trays

Current growing regions and number of growers

REGION        AREA                     GROWERS        AV.FARM         VARIETIES       SEASON
                                                      SIZE
Nth Qld       Mareeba to Atherton      7              500to250trees   P/M & A/P       Feb-May
C. Qld        Yeppoon/Gladstone        29             250 trees       Mainly A/P      Mar-May
Wide          Bundaberg/Childers       20             400 trees       Mainly A/P      Mar-Jun
Bay
SSC           Maryborough/Glasshouse 105              1000to50trees P/M & A/P         Mar-Jul
NSW           Tweed/Alstonville      87               500 trees     Mainly A/P        May-Oct
WA/NT         Perth/Carnarvon        ?10              1med.grower A/P                 Jul-Oct


Seasonality

Nth Qld – February to May
C. Qld – March to May
Wide Bay – March to June
SSC – March to July
NSW – May to October


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WA - July to October

Production

Figures from Custard Apple Database for 2003
NSW – 124,217 trays
QLD - 105,513 trays

The changing face of the industry

2000 to 2004 has seen many turning points in the custard apple industry.
1. Many long established growers, now ageing, have either;
    - sold their properties
    - converted their orchard to macadamias
    - pulled out their trees and retired from farming
    - become inactive in farming and left their orchards unattended.
2. Wholesale and retail demand has seen the price increase for Pinks Mammoth and price
decrease for African Prides when both varieties are available.
3. Consumers are seeking more the “quick fruit fix” or “value added” making custard
apples a less desirable option.
4. Increased marketing activities and increased consumer awareness of healthy eating has
seen the lifting of consumer awareness of custard apples.
5. New varieties being released are increasing the awareness of growers to enter the
industry.

Factors 1 to 5 show the changing face of the custard apple industry. There is a potential
of decreased production from tree pulls at the same time of increased awareness by
consumers of the product. The law of “supply and demand” would indicate that returns to
growers should increase which in turn should attract more growers into the industry.
These new growers will plant the new varieties which may be more profitable, making it
harder for the grower of the older varieties.

The challenge for ACAGA is to meet these changes as they arise and put in motion
programs that will enhance the industry.
Challenges:
   - increase breeding program to obtain better alternatives to present varieties.
   - Develop KJ best practice for growing so new plantings will be developed
       correctly.
   - Increase grower education of growing practices.
   - Value adding for less desirable varieties.
   - ? promote growers to enter the industry
Risks:
   - increased plantings of problem varieties.
   - New growers producing poor quality fruit.




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Industry organisation

Prior to the formation of ACAGA in 1991, the custard apple industry was represented in
Queensland by The Queensland Fruit and Vegetable Growers Association and in NSW
by the Exotic Fruit Growers Association. In 1989, Professor Ken Tucker from the
University of Queensland, identified the custard apple industry as having the best export
potential of all the sunrise industries at the time. With a Marketing Skills Program Grant,
he convened a meeting of high profile custard apple growers from all growing regions
and assisted them to form a National custard apple body. Once ACAGA was formed, he
funded a market research activity in Singapore and Malaysia and helped launch the name
of Jadefruit.

ACAGA was formed in 1991, with Paul Brigg from Atherton as inaugural president, Bill
Thompson (SSC) Vice President, Patti Stacey (NSW)Secretary, Val Truscott
(NSW)Treasurer, Management Committee members Elliott Tuckwell(NSW), Scott
Todd(SSC), Maurice McGree(C.QLD), Keith Paxton(SSC), Tom Duncan(Wide Bay) and
Barry Atkinson(C.QLD). ACAGA became incorporated in January 1992.

At that time, ACAGA’s role was agripolitical and R&D. It had a marketing arm with
fruit being exported under the Jadefruit brand by a marketing co-ordinator. Membership
of ACAGA was around 150 growers.

Bruce sloper was elected president in 1998 and instigated the creation of an independent
marketing organisation (J-CAM) so that ACAGA’S main focus would be R&D,
promotion, and agripolitical activities.

In 1999, the marketing group became independent from ACAGA and the Jadefruit
Custard Apple Marketing Association (J-CAM) was formed. This left ACAGA to
concentrate on its R&D and promotion program.

Current ACAGA Structure

ACAGA is an incorporated association under Queensland incorporation. It is run by a
management committee comprising of 9 members who represent each of the growing
regions. The number of representatives from each region is relevant to the number of
growers in each region. Nth Qld, Central Qld and Wide Bay have 1 representative each,
SSC and NSW 3 representatives each.

The current management committee consists of Bruce Sloper (President), Patti Stacey
(Secretary), Rebecca Rogers, Bill McLeod, Peter Korczynski, John Kilpatrick, Howard
Archard, Paul Thorne, Peter Trebbin.

The representatives are elected annually by the members in each region prior to the
ACAGA AGM. The executive are elected at the AGM by the committee members.




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The management committee meet face to face twice a year in February and July.
Teleconferences may be held in addition to these.

Many grower organizations have become company structures in the last 2 years. What
advantages this has given them is questionable. With limited funds available, the
structure ACAGA has seems viable and workable.

Membership:
At the end of 2004 there were 103 members. All members are growers. There is associate
membership available for non growers.

In 2000, ACAGA had 130 members. This decline is due, not to grower dissatisfaction,
but to growers being inactive or removing their trees.

In 2000, due to the split in the marketing group, there was disunity amongst growers. The
ACAGA Management Committee has put in a big effort to bring the industry back
together again. Two very successful conferences have been held, invitations have been
sent out to non members to attend field days and some of the disaffected have rejoined
ACAGA. Although today 2 marketing groups still exist, the disunity is now not so
apparent.

Management Committee:
The current management committee of 9 growers works well together and 2 new
members have been recruited in the last 12 months. Any grower interested in joining the
MC is invited to MC meetings. With funding becoming available to ACAGA from HAL
through the R&D and marketing levy, the running of the association has become more
efficient, more industry meetings are being attended and ACAGA is able to participate in
more activities. The web page has been updated to include the quarterly newsletters, the
database is assisting in grower communication.

ACAGA is a member of Freshcare and encourages growers to join Freshcare.

ACAGA supports the concepts and objectives of the Horticulture Australia Council
(HAC) and is a current member. Negotiations are still underway to find a solution to
joining HAC.

Funding

ACAGA is a member of Horticulture Australia (HAL) and the industry pays both an
R&D and marketing levy which is managed by HAL.

The annual membership fee for ACAGA is $66. Additional funding from the R&D and
Marketing levy investment program is provided to ACAGA through a Partnership
Agreement with HAL for industry communication and consultation.

Communication systems



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Field days are held in each of the growing areas; 2 to 3 times a year in the major growing
regions, and at least once a year in the smaller regions.

 “The Custard Apple”, a newsletter, is produced quarterly and distributed to members. An
annual distribution is done to non member growers along with a membership drive.

The custard apple web page was developed in 1999. It is aimed at consumers and has a
grower section that is accessed by password. The newsletter is posted on this section.

Conferences are held every 4 years. Three Conferences have been held –
   • At Caloundra on the Sunshine Coast in 1995,
   • At Coolum on the Sunshine Coast in 1999 – “Strength In Unity”
   • At Ballina in Northern NSW in 2003 – “Growing Our Future”. This was attended
       by over 100 delegates.

It is planned to have “roadshows” every 4 years between conferences. One was held in
1995 then add-hoc roadshows have been conducted since. A delegation of ACAGA
management and QDPI researchers traveled to all growing regions (except WA) during
2005 presenting research results, industry issues and gathering information.

Biosecurity and risk management
    .
Although ACAGA supports the concepts of Plant Health Australia, their fee structure
makes it impossible for small industries to join. No work has been done as yet on forming
a Biosecurity Plan.

R ,D&E programs

Prior to the implementation of a statutory R&D levy in 1995, all custard apple R&D was
funded by Commonwealth Grants and State funds through QDPI and NSW Agriculture.
In Queensland, Alan George and Bob Nissen from QDPI have been conducting research
on custard apples since the late 1970’s. In NSW, Don Batten from NSW Agriculture
conducted R&D on custard apples from 1980 to about 1990.

An R&D levy of 20cents per carton was implemented in 1995 and collected at the first
point of sale, i.e. the wholesaler in most cases. Once the R&D levy was implemented and
sufficient funds raised, all R&D projects have been directed through HRDC and later
HAL, with the researchers at Maroochy Research Station, Nambour doing the R&D as
integrated projects. These integrated projects are only partially funded by grower levies
and Commonwealth Government matching dollars. QDPI fund the bulk of the expense of
these projects.

In 2002, a “Fresh Cut Custard Apple Project” was conducted. Funding for this was
obtained by ACAGA president, Bruce Sloper, through the commonwealth government’s
Regional Assistance Program. Out of this a system a fresh cut product was developed.


                                                                                       18
The results were released and a taste testing was conducted at the 3rd National Custard
Apple Conference in 2003. The results have been made available so individuals can
progress this product into commercial production.

The majority of the R&D projects are run through QDPI. This is working very well, with
excellent communication and co-operation between ACAGA and the researchers.

The current project, “Increasing Consumer Confidence and Satisfaction with Australian
Custard Apple” commenced in July 2004 and runs to June 2007. Roger Broadley is the
Principle Researcher along with Dr Alan George and Bob Nissen. It is an integrated
project and incorporates the following projects:
    • Breeding program
    • Rootstock development
    • Clonal propagation
    • IPM program
    • IDM program
    • Database improvement
    • Develop a Custard Apple Record Keeping System
    • Industry development

There are also 2 VC funded projects:
   • a one year project entitled “Trials for controlling pest and diseases in custard
       apples by using exclusion netting”
   • a three year project entitled “Commercial Tree Trial System”




                                                                                    19
Appendix 2: SWOT ANALYSIS

STRENGTHS
Sweet, unique, tasty product
Niche product
Limited competition in the cooler months
Unusual appearance
Healthy product - High Vitamin C/low GI
Low acid
Soft fruit – suit babies and elderly
Small unified industry
Good cohesive industry organisation
Sharing, supporting industry
New high yielding, precocious variety (KJ Pinks)

WEAKNESSES
Price takers
Lack of value adding/processing
Impulse purchase
Low shelf life
Difficulty handling/sensitive product
Lack of consumer knowledge handling/using
Limited access to export markets
Lack of volume to service export markets
Lack of adherence to QA standards
Lack of awareness of product
African Pride – Market acceptance problems
Low production per hectare
High production costs
Lack of mechanical grading
Poor disinfestations treatments
Lack of funds to address industry issues

OPPORTUNITIES
New varieties – seedless/colour
Market access – domestic and export
Value adding/processing
New packaging/products
Room to increase market share/consumption
Expand production
Better rootstocks
Removal of second grade product through value adding
New varieties and training systems
    - to improve efficiency
    - to encourage new growers
Increasing older demographic with time and dollars



                                                       20
Capitalise on market window in the cooler months

THREATS
South African KJ Pink production
Consumer/market turn-off from poor quality fruit
Flooded domestic market if export not developed
Cost of regulation/red tape
Exotic pests and diseases
Ageing growers leaving the industry
Overproduction due to downturns in other industries
Ageing trees
Increasing costs/lower profit margins
Decreased production leading to decreased levies and R&D
Loss of chemicals
Lack of access to new chemicals
Increased public resistance to new chemicals
Traditional markets eroded by more organised industries
Pest & disease resistance
Bad publicity
Water restrictions
Climate change
Industry disunity




                                                           21
Appendix 3: ISSUE ANALYSIS

Cause and effect - Expand domestic and export markets




                               Lack of
   Soft fruit                  promotion

   Box collapse
                               Poor quality

   Poor retailer
   knowledge
                               Competition
                               from other
                                                        Existing
   Inconsistent                fruits
                                                        markets
   pack
                               Inability to                             Export
                               supply
                               volume

   Airfreight
   availability                                         New markets
                               Access
                               impediments
   Quarantine
   restriction

                               Lack of                                   Expand
                               demand for                                domestic &
                               small fruit                               export
                                                                         markets



     Poor supply chain
     relationships                                      Roadside
                                                        Sales

                                                        Processors
     Low consumer
     awareness                                                         Domestic
                                                        Independent
                                                        grocers
     Poor supply chain
     handling                                           Supermarkets



     Poor shelf life/
     retail display



     Rising production
     and marketing                                                        22
     costs
Cause and effect – To improve production efficiency, product consistency and
consumer satisfaction



Varieties
Farm design
Equip & machinery
Irrigatioin
Fertiliser
Labour
Diseases
Pests
Chemical registration
Accreditation & regulations
Reduce fruit down grading
QA                                                    Growing




                                                                               Production
                                                                               efficiency
Transport – negotiate as a group
Coolchain – cold room mgt
Handling – transporter,
wholesaler, retailer handling                           Supply chain
Accountability
Accreditation – no cowboys
QA


                                                        Packaging
Wastage
Types of packaging
Returnable plastic crates
Packing shed layout
Group purchasing of boxes to
reduce cost
                                                        Processing



Outlet for seconds




                                                                                  23
              Process map – To provide industry leadership through strong industry body


Funding constraints              Form liaison with
                                 other small
HAC,                             industries
Freshcare,
PHA,                                                                                                Encourage
                                                                                                    industry
                                                                                                    involvement
Memebership of                   Membership of state
national bodies                  bodies
                                                                         Communication


                                                                                                    Promote new
Food safety, ICA,             Regulation                                                            varieties
OH&S, EMS,
Chemicals




  LRS,
  DAFF,                  Levies                         Strong
  HAL                    management                     Industry
                                                        representation      Membership
                                                        for growers
                                                        ACAGA
                                                                                                    Membership drives




                                                                            Benefits
                            Statistics




                      Reliable stronger                                       Newsletter,
                      database                                                website, field days




  Forecast better                     Custard Apple Record
  direction for future                Management



                                      Develop/promote



                                      Benchmark
                                                                                                           24

								
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