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Index Fresh, Inc . ™

Index Fresh, Inc . ™. 2014 Season Outlook. February 2014. Agenda. 2013 Industry & Index Review – Dana 2014 Supply Factors – Dana 2014 Index Operations - Dana 2013 Industry & Index Market Review - Todd 2014 Market and Index Programs - Todd

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Index Fresh, Inc . ™

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  1. Index Fresh, Inc.™

  2. 2014 Season Outlook February 2014

  3. Agenda 2013 Industry & Index Review – Dana 2014 Supply Factors – Dana 2014 Index Operations - Dana 2013 Industry & Index Market Review - Todd 2014 Market and Index Programs - Todd Harvest Recommendations & Key Success Factors – Dana Outlook & Conclusions - Dana

  4. 2013 Industry Review Overview Record total volume in U.S. Market – 1.685 billion lbs. (5.3 lbs. per capita) Average per week - 32.4 million lbs. (10.6% greater than 2012) California retained premium over imported fruit Over $42 million generated under HAPRIO law for promotion and advertising by CAC, MHAIA, CAIA PAC and HAB. California At 460 million lbs. of Hass (27%), California recorded it’s second large crop in a row The size curve = small - large numbers of 70s, 84s, 96s and PWs Prices were low until summer before climbing in June – September Mexico Record of 1.125 billion lbs. (67% of total crop) Normal size curve and low prices until June and July Record volume week prior to 2013 Super Bowl (42 million lbs.)

  5. Chile 2012/13 season (Jan to Apr 13) was a very small year and volume was diverted to domestic market, Europe and Argentina Chile supplied customers with long term programs, avoided the spot market 2013/14 (Aug to Dec) was a larger season, but late start and a strong European market kept volume at historically lower levels Peru Volume increased by 27% over 2012 Importers controlled the size curve, limiting 36’s and larger Quality was good with increased customer acceptance 2013 Industry Review

  6. 2013 Index Review Operational Index conducted grower seminars and published newsletters with cultural information Index returned $532 thousand to growers under our two volume rebate plans and $407 thousand in hauling credits New bins were added to Index’s inventory to accommodate growth Hired northern fieldman Continued with to facilitate grower GAP certification (42% of Index’s volume)

  7. Lessons Learned in 2013 California fruit remains the avocado of choice Demand for avocados continues to grow Sizes in the 60 to 40 range bring the highest returns, but the large volume of small fruit forced experimentation in new successful packaging Avocados remain a growth item at both retail and food service Investment in marketing through the associations is a great investment Programs that “lock up” customers for California are a key to success

  8. 2014 Supply Factors U.S. Hass Volume - Actual 2012 & 2013 vs. Projected 2014 Calendar year / millions of lbs. (source Hass Avocado Board) Origin 201220132014% Change California 424 460 325 -29.3% Mexico 968 1,125 1,100 - 2.2% Chile 93 51 70 48.9% Peru 37 47 90 91.5% Other 2 2 2 0.0% Total 1,524 1,685 1,587 - 5.9%

  9. 2014 Supply Factors Historical Volume By Country of Origin (in Million of lbs. per Week) Season Total 944 942 1,004 1,300 910 1,524 1,685 1,587 Billion Percentage Change-.002% 7% 29% -30% 67% 11% -6%

  10. 2014 Supply Factors Weekly Volume in Millions of Lbs. Per Week

  11. Overview Overall US market volume will be down by 5.9% California and Mexico will continue to represent the lion’s share of the market Peru and Chile will continue to play a niche role in the market California Smaller overall crop Larger size curve (relative to 2013) Anticipated higher prices and returns Mexico Similar crop to 2013 Slightly later start and will carry at volume into June 2014 / 2015 crop is unknown Additional acres are coming into production Jalisco entry in process (best guess = beginning of 2015) 2014 Supply Factors

  12. Chile Large 2013/2014 crop will finish in late March or early April Fruit set for 2014/2015 suggests a smaller crop Exchange rate is favorable Acreage is stable Europe, Argentina and domestic markets remain alternatives Peru’s entry into Chile may change market dynamics Peru Volume will begin in June Looking to increase volume to US significantly Europe remains a strong market Acreage is increasing at 10% per year Quality will determine customer acceptance 2014 Supply Factors

  13. 2014 Index Operations Index will continue to invest in California infrastructure: Bins, packing machinery, trucks, facility and equipment upgrades Traditional and large lot rebate programs Hauling credit Cultural seminars and newsletter will continue Continue GAP certification assistance Addition of second Ventura fieldman – Bailey Diioia Improved Daily Fresh Facts Increase in bin inventory

  14. 2013 Index Market Review Index Fresh Sales Highlights New Account Development Key Business Expansion International / Export Program Special Projects

  15. 2013 Index Market Review Company Performance Sales Highlight Outperformed industry average on AMRIC in 79.3% of weeks during the California season Export program grew by 200% to 3 % of Index’s annual sales

  16. 2013 Index Market Review Company Performance Sales Highlight 150 Customers – 48% of volume with strong program accounts. Top 20 accounts purchased 62% volume. Top 30 accounts purchased 73% volume.

  17. 2013 Index Market Review Special Projects Market Place, Hong Kong Bag Size 60 – 2 count Bag Program – Multiple Sizes T&T Supermarkets, Canada Bag Size 70 – 4 count

  18. 2013 Index Market Review Special Projects AvoBuddies- Our newest themed Avocado Bag Program Whether you’re preparing a 4 course meal, looking for a healthy alternative, or simply in need of added convenience, our AvoBuddies have just what you’re looking for. After all, who can convey this better? You said it--an Avocado, of course! Available in any configuration/size Standard or Custom UPC codes

  19. 2013 Index Market Review Special Projects AvoBuddies Participants Domestic: • International: Northgate Markets, California AvoBuddies Bag Size 84 – 4 count Giant Food Store Stater Bros. Markets Mi Pueblo Northgate Markets Food 4 Less T & T Wellcome Stores Wellcome Stores, Hong Kong AvoBuddies Bag Size 60 – 4 count

  20. 2014 Marketing & Programs Key Factors to Success Marketing Approach Program Accounts by Size Harvest Recommendations Index Advantages Summary

  21. 2014 Marketing & Programs Key Success Factors Fruit quality Managing winter/spring & summer/fall transition periods Locking in quality customers for California avocados Consistency of supply to support accounts April - August Timing and cooperation with CAC marketing programs Harvest to market conditions Maximize fruit size and volume Consider drought impact

  22. 2014 Marketing & Programs Index’s Marketing Approach • Continue to position California avocados as the best choice, due to: • Freshness, local grown, consistency of supply, appearance and flavor • Switch customers from Mexican/Chilean programs to California when volume hits critical mass in April • Focus in California’s core markets where promotions, advertising and advantageous freight rates create added value • Prioritize account base in short crop year • Steer volume to value added programs (Bags, Demos and volume incentive and promo funds to drive business) • High end users that pay a premium for California fruit

  23. 2014 Marketing & Programs Index’s Marketing Approach • Focus on premium food service business that demands California fruit in June through September time period. • AvoBuddiesBag Program • Multiple size approach to maximize returns • Take advantage of retail promotion opportunities for Cinco de mayo, Mother’s Day, Memorial Day, July 4th and Labor Day • Limit fixed quarterly pricing to 20 % or less of monthly volume.

  24. 2014 Marketing & Programs Export Program Expand business with quality direct retail Increase export business to Japan and Hong Kong in April through August time period when Mexico is light in volume Transition Chinese retail business from Mexico to California in April Ship 12-15% of domestic volume into far east markets

  25. 2014 Marketing & Programs Harvest Recommendations Start when customers begin to shift into California fruit, March/April Size pick to maximize return and weight Spread harvest from April through August to mitigate market risk and support top retail accounts with regular weekly volume. Communicate harvest plans with field staff to allow for pre-planning Protect the health of tree for future years Arrange for harvest labor early

  26. 2014 Marketing & Programs Index Fresh Advantages All Growers are treated equal Historical record of superior grower returns, beat the competition in 75% of pools past 18 years Volume incentive programs Singular item focus Superior grower infrastructure investment Flat structured organization Transparent company culture

  27. Index Fresh Advantage • We develop custom programs to build your business. • Our entire operation is devoted to providing great value and maximizing your returns. • Our quality and service add up to excellent value. • You can trust AvoTerra to deliver value, with over a century of packing experience and leadership in the avocado industry. • Because we are grower owned, specialize in avocados and maintain a flat organization, you can count on reliability, consistent supply and great service. • We call this AvoTerra ROI

  28. Conclusion California will remain the premium avocado in the market due to: Freshness & proximity to the market Local factor California “brand” CAC Marketing Strong California marketers California will continue to command a premium over imports Index will continue to market California avocados with our 4 long term objectives always in mind: Providing superior returns Providing excellent grower and customer service Aggressively marketing all product lines Building value for shareholders through controlled growth

  29. The outlook for California avocados is strong!

  30. Questions?

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