In the space of ten years the Australian non-astringent persimmon industry has come from an almost standing start to having sound prospects for development as a profitable, export based horticultural industry. This has not happened by accident. Innovation in marketing, integration across a number of fields of R&D, and focusing on strategies for long term sustainability have been the hallmarks of this industry's progress. R&D has spanned the fields of production, postharvest and processing technologies. Marketing has concentrated on a detailed understanding of the needs of consumers in export markets. Industry organisation has begun with a core of about thirty key growers from five states. The benefits of such a 'whole systems' approach to development are exemplified in the formation of the Australian Persimmon Export Company. This company now exports single brand, quality managed fruit from five states to targeted Asian markets. It has a strategic vision for the industry's future based on consumer awareness, product quality, reliable supply, and profitable partnerships with all players in the marketing chain.
This paper is structured so that it focuses on each of the four elements of the conference theme - marketing, innovation, integration and sustainability. In turn, each element is examined as it applies to the development of the Australian non-astringent persimmon industry over the last ten years.
The paper begins with an overview of the industry at its present stage of development. It then addresses issues of marketing, distinguishing between performance on domestic and export markets. The next section examines innovation in the industry, in particular in the areas of production, postharvest and marketing systems, and industry organisation. The third section describes ways in which the industry has integrated its research and development, and stresses the importance of links between growers, marketers and consumers. The second last section addresses sustainability. Key topics include sustainability of production systems, economic sustainability and sustainability of the industry's human resource base. Finally, conclusions are drawn about the progress made to date in this industry, and the likely outlook for its future.
1.2.1 Size - Tree numbers, area and number of growers
Non-astringent persimmons are produced from an estimated 150 000 trees, though this figure is at odds with Australian Bureau of Statistics figures which put the 1993-94 total tree number at 72 733. The fact that in 1992-93 total New South Wales tree numbers were quoted by the ABS at 6 523 when one single planting at Coffs Harbour contained in excess of 12 000 trees provides evidence of this discrepancy, and lends support to the suggestion that ABS statistics may seriously underestimate total tree numbers. Plantings have steadily increased over the last few years, so that total tree numbers may be likely to exceed 200 000 before the turn of the century.
Accurate statistics on area under production and number of growers are also unavailable. Modern plantings are commonly made at medium to high densities ranging from 600 to 1000 trees per hectare, while older plantings were made at 300 to 600 trees per hectare, so total area under production would probably be between 200 and 400 hectares. Although about half these plantings are under the control of less than 50 growers (see section 2.2), the balance of trees may be distributed in small plantings of 50 to 500 trees per grower across as many as 300 other growers.
1.2.2 Distribution
Because the persimmon is a crop which adapts to a wide range of climates and soil types, the industry is distributed across all mainland states from the Atherton Tableland in the north east to Perth in the south west. Traditional areas of production were close to capital cities, but major production regions now include south east Queensland, north east New South Wales, Sunraysia in Victoria and the Riverland of South Australia. Newly developing pockets of production can be found in many regions, such as at Tallangatta and Echuca in north east Victoria, around Young in New South Wales, and at Calen in north Queensland.
1.2.3 Production
The persimmon is a tree of moderate productivity with a commercial yield potential ranging from 20 to 40 tonnes per hectare, of which 50 to 70 percent is typically marketed. The ABS reports that total Australian production has steadily risen over the last ten years from less than 80 tonnes in 1983 to just over 500 tonnes in 1993.
1.2.4 Marketing
Marketing issues are canvassed in detail below, but a brief summary of domestic and export markets is given here. The marketing of Australian non-astringent persimmons has been focused on domestic markets until relatively recently. In these markets the fruit was not well known, often confused with astringent varieties, and commanded variable and mostly weak prices. The increasing influence of Asians in the population, and a increasing interest in new fruits generally, has seen some growth in consumption of non-astringent persimmons and a slow strengthening of domestic markets.
A much more significant influence on market growth has been the realisation that the non-astringent persimmon has export potential - primarily to off-season northern hemisphere markets in Asia, notably Singapore, Hong Kong and Malaysia. Over the last five years total exports have jumped from less than 10 percent of production (22 tonnes exported out of a total production of 233 tonnes) to almost 40 percent (198 tonnes exported out of a total production of 510 tonnes). Singapore is by far the biggest export market, consistently consuming 60 to 70 percent of total annual exports over the time period mentioned above.
1.2.5 Industry organisation
Presently in Australia, there are only two organisations dedicated exclusively to representing this industry. One is the Persimmon Industry Association, a five year old information-sharing group based in South Australia, but with Australia-wide membership. The other is the Australian Persimmon Export Company Pty. Ltd. (see later discussion), also with Australia-wide membership, but dedicated exclusively to developing and managing export markets. A third organisation, the Sunshine Coast Subtropical Fruits Association, based around Nambour in south east Queensland, has a persimmon sub-committee which addresses the needs of grower members in the region. A recent poll of growers in Queensland achieved agreement to impose compulsory research and development levies, administered by the Queensland Fruit and Vegetable Growers Organisation, on all sales made in Queensland. Across the remaining states, no other industry-specific funds are raised, although South Australian growers have indicated, through the Persimmon Industry Association, that they will make voluntary contributions to the Queensland scheme - most unusual for an Australian horticultural industry.
2.1.1 Strategy
As indicated above, domestic marketing is characterised by growers consigning fruit to wholesale markets to be sold through agents or merchants. There is no co-ordination of domestic marketing, either by groups of growers, or by market agents. Occasionally, programs with supermarket chains are developed, but realistically, the fruit is not yet well enough known to warrant much attention of this kind.
It would be fair to say that the majority of domestic marketing is opportunistic in nature - growers simply consign to the market and take whatever price results. On the subject of opportunism, there is a significant trade in fruit destined for export being sourced off domestic market floors, particularly at times when reasonable quality fruit is available at low prices.
2.1.2 Major markets
The capital city domestic markets of Sydney, Melbourne and Brisbane are the biggest. Among growers, Sydney is known as the most robust market, and the one in which the highest prices are paid, if only for occasional small quantities of exceptional quality fruit. As mentioned above, there is little trade direct from grower to supermarkets, though this is likely to increase. Significant farm gate sales are common for growers close to major centres of population, particularly to consumers of Asian descent, who seem to have a preference for buying direct.
2.1.3 Performance - price, timing, and competition from imports
The performance of domestic markets is best described as variable. Prices in a season can vary from as low as $5 per single layer tray (3.5 to 4.0 kg) to as high as $25 per tray. Determinants of this variability are fruit quality, and whether there are good export opportunities at the time. An average all-round gross price range per tray across all major domestic markets in recent years would be $9 to $11 for fruit of reasonable to good quality, in sizes of counts 18 and 20 per tray. Very few trays are sold at prices above $18 per tray, and most growers would regard fruit sold at prices below $6 per tray as of very inferior quality.
The Australian season begins in late February, with the early variety Izu grown in warmer parts of Queensland. It concludes in early June (or later with stored fruit) with Fuyu or Suruga grown in cooler regions such as the Adelaide Hills and south west Western Australia. By far the majority of trees are Fuyu, whose harvest season peaks during April and May in Australia.
Very small quantities of non-astringent persimmon are imported into Australia. Occasionally, fruit from Japan (15 kg cartons) or California (trays) is seen on domestic markets during the northern hemisphere season from October to January. New Zealand fruit is more commonly seen, but total imports are still less than 50 000 trays per season, and are usually on the market in late May or June, when the Australian season has almost finished.
2.1.4 Outlook
As indicated above, domestic markets are growing slowly, and have room to be further developed. Expansion will result from more Asians in the population, and more European Australians becoming aware of the fruit. Many in the industry believe this fruit would lend itself well to market growth through promotional activities, as it is a sweet, attractive fruit. In the future, there is an opportunity for co-ordinated marketing from growers working in concert with marketers.
2.2.1 Strategy
Export marketing in Australia falls into two distinct categories. One category accounts for fruit from growers who may have consigned it originally to domestic markets, from which it was purchased for export. Also in this category is fruit from growers who knew the fruit was to be exported, but had no say in its destination, and received no feedback, other than price, as to the performance of their product in that market.
In the second category is fruit from the Australian Persimmon Export Company (APEC). Growers in APEC (see description in section 3.3) take responsibility for their own marketing outcomes, and export a single brand product ("Sweet Gold" persimmons), for which a quality management program is being developed, to target markets in which certain importers have sole rights to handle the brand. This is the only example of a marketing strategy being developed for Australian non-astringent persimmons.
2.2.2 Major markets
The major export market for persimmons is Singapore, as detailed previously. Potential to develop other Asian markets such as Hong Kong, Malaysia and Thailand exists. Markets such as Taiwan and South Korea may open up to Australian persimmons in the not too distant future, but it is likely that the most lucrative market of all, Japan, will remain closed because of quarantine barriers against fruit fly, at least in the medium term. Markets in Europe are relatively small and too expensive to access by air. The Middle East has some potential. North America is closed because of fruit fly quarantine legislation.
2.2.3 Performance
Australian non-astringent persimmons are generally known for their variable quality on export markets. Much of this is due to opportunistic practices of exporters buying off domestic market floors. However, the best of the Australian crop is well regarded because fruit is very sweet, free of residual astringency, brightly coloured, and medium to large in size. Ample evidence exists of the ability of our fruit to satisfy consumers in export markets. It is the performance of the marketing sector which is presently the weak link in consistently satisfying these consumers.
2.2.4 Outlook
The outlook for exporting non-astringent persimmons is tinged with uncertainty - not the uncertainty that markets exist, but the uncertainty that Australians can meet the needs of these markets. We are known for our inconsistency and unreliability with this product, and only a change in attitudes and practices will successfully address the problem.
3.1 Innovation in production systems
Australian production systems by world standards are not exactly at the forefront of innovation, but are certainly not lagging far behind the innovators. We are probably some of the first to adopt new production technology once the benefits have been reasonably demonstrated. Examples include the adoption of higher density plantings of around 1000 trees per hectare, the very high level of adoption of trellising (particularly palmette trellising), the adoption of complete netting of orchards where birds, flying foxes and hail may be problems, and the adoption of canopy management techniques (pruning and thinning) designed to improve fruit quality.
Innovation in the postharvest area, like innovation in the production area, is being led by countries other than Australia. Longer term storage is the goal of much of the present postharvest research. Modified atmosphere packaging is being developed to allow sea freight to more distant markets. Non destructive measurements of fruit quality are being used to examine whether certain characteristics of fruit before storage are associated with subsequent failure to store. As almost all Australian exports are flown to their destinations, ability to achieve long term storage (more than three or four weeks) is not regarded as a problem impeding industry development at the moment.
By Australian horticultural industry standards, the activities of the Australian Persimmon Export Company could be judged as innovative. Very few other industries could claim a core of growers taking full responsibility for more than half the industry's total exports through a single, quality managed brand. Giving sole rights to the brand to selected importers is also not the norm in Australian fruit marketing, neither is the approach proposed by this company for 1996, when growers will be stationed in the major export market to undertake daily out-turn reports on every shipment for every grower so that feedback on quality can be as immediate as physically possible.
The industry as a whole could be said to lack organisation, but it does have the making of a future national body in the Persimmon Industry Association. There is nothing innovative about this, but it is unusual, to say the least, when the largely South Australian membership of this organisation agrees to voluntarily pay R&D levies under the Queensland Fruit and Vegetable Growers Organisation scheme. Such a decision would indicate that a view which takes into account what is in the best interests of the whole industry takes precedence in this Association.
As detailed above, there is no doubt that APEC is innovative. It is likely that no other Australian horticultural industry draws such a core of growers across such a wide range (five states) with such unity of purpose. Additionally, APEC is totally self-managing and self-funded, although it was originally set up in 1990 under the commonwealth DPIE's Export Marketing Skills Program. It now has a board of five grower directors, a paid Executive Director, and in 1996 a paid grower Marketing Information Officer is proposed.
In 1990, the Rural Industries Research and Development Corporation agreed to fund a major research project in this industry. The objective of this five year, $250 000 project was to develop a package of research which was integrated across the fields of production, postharvest, marketing, food processing and industry organisation. By integrating R&D in this way, it was hoped that each area of research could be made more productive through the presence of the others. Researchers in production systems, for example, could benefit from advising, and receiving feedback from, researchers in the postharvest area. The cross-benefits among all areas of R&D soon became obvious. There was clearly a payoff from researchers in one field knowing how the crop behaved in another. This approach to integrating research effort so as to simultaneously address as wide a range of industry issues as possible was innovative at the time, but has since been picked up by other industries.
The industry has also experienced integration of another form. This has been the integration of growing and marketing, through APEC. Here, growers have banded together with a common purpose, but more importantly, they have taken responsibility for and control of their marketing outcomes.
Such an approach is entirely dependent on the successful integration of marketing and production systems. This has occurred firstly on farm, in the sense that growers now know quite precisely what consumers want in their product, as a result of extensive in-market research, much of which has been done by growers themselves. Grower members of APEC have undertaken serious in-market investigations every year since 1991. Secondly, the logistics of production and marketing have been integrated. This has been achieved by APEC building a relationship with a single marketing co-ordinator, who handles all of their product, who attends company board meetings and general meetings, and who has a significant say in the governance of APEC. These two levels of integration have successfully achieved an awareness in growers that everything they do must bear some relationship to the needs of the marketplace, and that their company suffers collectively if they pass their shortcomings on to someone down the marketing chain.
Production systems have been described above as up to date. In terms of the usual sustainability arguments persimmon production is probably no more or less sustainable than the production of any other horticultural industry. In areas with fruit fly, reliance on spray programs is necessary, though most growers are working with programs integrating bait trapping with spraying. In most other areas, the need to use chemical sprays on persimmons is very light. For example, in the Riverland of South Australia, growers may use three applications of fungicide and one of insecticide in a season.
Persimmons are also moderate to light consumers of fertiliser. It is possible to meet all the tree's needs through organically acceptable forms of nutrition. Being a perennial crop, it is usual to grow persimmons in a sod culture system, which may include legumes, and which guards against soil loss through erosion.
The economics of persimmon production are curiously diverse. Presently there are growers in both Australia and New Zealand who are pulling out persimmon orchards because of poor economic results. At the same time there are others planting new orchards because they are confident in the crop's future prospects.
This diversity of opinion can be traced to the market place. The persimmon is a very hardy tree which will grow almost anywhere, but it is a difficult crop to grow to the exacting standards of increasingly fussy consumers. Growers who do not give it the considerable attention required to produce high quality fruit will be heavily penalised by the market, and for them non-astringent persimmon production is economically unsustainable. Those professional growers who make the necessary commitment and effort currently believe non-astringent persimmon production to be economically sustainable.
Sustainability of an industry also has a human resource component because ultimately, any measure of sustainability is in reality measuring the outcomes of decisions made by the industry's human stewards. It is after all the people in the industry who give its strength and direction. Sustainability in the human resource context is therefore a measure of whether there are people in an industry prepared to champion causes for the good of the whole industry, rather than for their own self interests. In addition, such effort must be continuous and supported by the majority of the industry before human resource sustainability can be claimed.
The non-astringent persimmon industry in Australia has been driven strongly by the continued efforts of an initially small band of growers, marketers and researchers, but now growing steadily, and representing more than half the industry in terms of tree numbers and production. This core is to be found represented in all three organisations mentioned earlier. Confidence that it represents a sustainable human resource base for the industry derives from observations of its actions - its willingness to share information, its open lines of communication, its commercially astute decisions in developing export markets, and its willingness to accept responsibility rather than to look for someone else to blame when things go wrong. Taken collectively, these outward signs indicate that both structures and decision making processes are emerging which will place the industry in a strong strategic position for many years to come.
In just ten years, the Australian non-astringent persimmon has undergone rapid growth from an almost zero base to being an industry worth around $5 million. More importantly, this growth has been strategically sound. Export markets have been developed and monitored by growers themselves; organisations are emerging which appear to be strong vehicles for sustained growth under the management of growers; production and postharvest systems are up to date; and above all, growers in the industry feel empowered to take charge of their own collective destiny.
The outlook is for continued growth, in line with the growth and development of both domestic and export markets. Whether growth tends to lead or lag behind market growth will be determined by how well market information filters to those making development decisions. There appears at the moment to be an effective system of acquiring, analysing and disseminating market intelligence among members of the three industry organisations, especially APEC. Should this continue, and it must be through the efforts of growers themselves, then industry growth will probably never lead or lag market growth by much.
Threats to sustainable, strategic growth are most likely to come from opportunists, amateurs and sharks (this has already happened) who judge the non-astringent persimmon by "facts" such as prices of $25 per tray in domestic markets, and it being a tree which is easy to grow. Both these are "facts", but taken out of context, they convey a completely fallacious image of the industry. Professional growers will judge decisions to expand with cautious optimism. They may conclude that this is a crop in which it may be quite difficult to achieve consistent high quality outcomes, but also a crop which is infinitely better known among millions of increasingly affluent consumers in the opposite hemisphere.