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Jim Sutton speech to Avocado Association

Jim Sutton speech to Avocado Association

Speech Notes
19 July 2002

1pm, 18 July 2002
Avocado Association meeting, Auckland

Ladies and Gentlemen: thank you for the invitation to speak today.

Earlier this year, the Prime Minister launched the Growth in Innovation strategy, focussing on three sectors which had the potential to affect all aspects of our lives - what the policy wonks call “horizontal technologies”.

These were: information and communication technology, arts and creative industries, and biotechnology.

The Growth through Innovation framework documents a broad consensus that has emerged over the past two years as to what needs to be done to develop New Zealand’s innovative potential.

To do that, the Government is committing to implementing policies with more emphasis on: - Enhancing our innovation framework; - Developing our skills and talents; - Increasing our global connectedness; and - Focusing interventions in those areas that can have maximum impact.

The Government has chosen to target its innovation initiatives initially in biotechnology, ICT and the creative industries. These are all areas which, if they attain their growth potential, can have a significant influence on the broad scope of the New Zealand economy.

Obviously, these three sectors are not the only sectors we want to see innovation and growth in. For our country, and our economy, to achieve the way we want it to, innovation must happen across the board.

Ladies and Gentlemen: ICT, biotechnology, and the creative industries are not about to displace dairy, meat, and tourism as the main agents of our economy. But they are three sectors of enabling technologies that are going to drive change in those sectors and many others to help New Zealand lift its performance.

Your industry is one I would like to use as an example of creativity and innovation. It’s a fascinating story, the growth of the avocado industry in New Zealand.

I’m told it all began in the 1930s, with one grower in Gisborne experimenting with some trees.

In the 1950s, that grower established New Zealand’s first commercial avocado orchard.

Production areas remained small, till the early 1980s when rapid expansion happened. Now we have 1637 hectares of avocado orchards this year, producing 11,596 tonnes of fruit.

Production is occuring all over New Zealand. This year, the far north has 3 per cent of growers producing 11 per cent of production. Growers in the mid-north are 11 per cent of all growers, and produce 20 per cent of the total crop. The Bay of Plenty is the key growing area, with 79 per cent of growers and 67 per cent of the total crop. Finally, the rest of New Zealand has 7 per cent of growers and 2 per cent of production.

Expansion has been dramatic. There are more trees in the ground that are not cropping yet than those that are.

Those trees cropping are also setting new production records.

However, last season was a difficult one climatically, and total production fell. Production will not increase as much as initially expected this season as a result of the cool wet spring and early summer in producing areas. Export producton has been reported as likely to be only 1.5 million trays, or 14 per cent up on the 2001-02 export crop.

To give people an idea of how much production is increasing¡K by 2004-05, export production is expected to triple on what it was last season.

With such dramatic increases in production, market development will be critical. The logistics of picking and packing the crop will be challenging, too.

You have a well-organised industry, with a good export programme operating under the Horticultural Export Authority. In the past ten years, exports have grown from 1300 tonnes worth $5.4 million to 6321 tonnes worth $28.3 million.

Your main markets are Australia and the United States, with 97 per cent of all avocado exports by volume going to those two markets in the year to March this year.

Australia has been a key market for over 20 years. Initially, it was the only significant export destination. It’s a high value market, but one with a limited windown during which New Zealand can supply - at a time when local production levels are low.

The United States is a new market, which has taken significant volumes during the past two years.

Japan and other Pacific Rim countries are being explored as potential markets.

As I said earlier, the projected increase in crop production is going to require careful handling, in both marketing and logistics.

However, I have confidence in your industry.

The work you have done in developing avocado oil as a brand-new product is an exciting example of innovation. I wholeheartedly encourage this.

I’m told there are now two companies using reject fruit to produce avocado oil, one in Northland and one in the Bay of Plenty. This is an innovative use of technology to develop an attractive product.

We are living in a society that seems to be more and more interested in food and culinary pursuits. Avocado oil fits into that trend beautifully.

Not only is it a fascinating colour, but it has cooking and health benefits.

Praised by high profile chefs such as Jamie Oliver and Peter Gordon, for its distinctive and highly palatable flavour, avocado oil also boasts excellent health credentials. Avocado oil contains significant levels of the natural plant compound beta sitosterol, which inhibits the absorption of cholesterol in the blood stream.

I’m pleased to note that avocado oil producers have accessed the Government’s Enterprise Award scheme to get help for business & strategic planning, and intellectual property protection.

And I see this is not a one-off for your industry.

On Tuesday, New Zealand Dairy Foods announced the development of what it believes to be the world's first Avocado and Olive Oil spread.

Peter McClure, Chief Executive of New Zealand Dairy Foods says, "We believe in leading the market through innovation and are excited to be launching” the spread, called Avezzo.

The olive spread market currently accounts for 14.8 percent of the total spreads market, with sales increasing more than 11.9 percent year on year, according to market researchers. The new spread offers consumers the taste and health benefits of an olive oil spread enhanced with the unique health benefits of Avocado Oil.

Dairy Foods is excited by their new product and they believe that the development of a product that offers the unique health benefits of both Avocado and Olive Oil will grow the market significantly. They are launching Avezzo in New Zealand, and after that, they will be looking at opportunities to take this example to the international market. It sounds to me like you have another potentially successful export product on your hands.

Ladies and Gentlemen: you have an exciting time ahead in your industry. I believe you can view the future with optimism.

That’s not to say it’s going to be easy, and that you’re always going to do as well as you want. There are going to be bad weather seasons, and fluctuations in the United States dollar - to name just two potential pitfalls ahead.

But you have demonstrated a significant ability to work together for the greater good of all. You’ve got a good product, with exciting new derivatives on their way. You are a smart innovative group, and I congratulate you. Office of Hon Jim Sutton

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