Australian horticulture must position itself as a supplier of high-quality produce that attracts premium prices in order to be competitive both domestically and abroad, according to a recently-released industry report.
The Global Focus report, Australian Horticulture – fresh fruit and vegetables was produced by Rabobank, says Australian horticulture cannot build a competitive advantage on price due to increased competition from low-cost producers.
According to the Rabobank report, increased competition from imports during the past five years has meant that Australian suppliers have been progressively losing market share.
Those low-cost competitors don't face the same production challenges that local producers do, such as water scarcity and labour shortages, the report states.
"Therefore, Australian fruit and vegetable suppliers must position their produce on nonprice attributes such as quality, food safety, and environmental and social responsibility," report author and Rabobank analyst Vera Zelenay said.
According to the report, global and domestic markets offer opportunities for fresh fruit and vegetables suppliers.
As consumer preferences shift towards the need for freshness, quality and convenience, consumers are demonstrating their willingness to pay a premium for these attributes.
"This is particularly evident in mature markets where value growth is expected for the horticulture industry as consumers demand more value-added products – food appealing to health and well-being, convenience and practicality, and experience and taste," Ms Zelenay says.
"And in emerging markets, economic and population growth, are expected to drive market volume growth."
Another opportunity of expansion for Australian horticulture is the potential for an increase in consumption over and above population growth, the report says.
"Australia's fruit and vegetable per capita consumption of 199 kilograms per year is relatively low when compared to other developed countries such as Italy (298 kilograms per year) and New Zealand (250 kilograms per year)," the report states.
But a key challenge for the production of Australian fruit and vegetables is its high dependency on irrigated water.
"Water scarcity, particularly in the Murray Darling Basin, will pressure local producers to increase their efficiency in the delivery and use of irrigated water, and force them to develop water management strategies and increase the accuracy of their budgeting processes," the report says.
Climate change also presents a double challenge for the production of fruit and vegetables: producers – in Australia and around the globe – will need to adapt to a changing environment and cope with the implementation of an Emissions Trading Scheme (ETS).
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