The sweet fruits of exporting
Manbulloo Mangoes Managing Director Marie Piccone has spent the last decade building a mango empire. Thanks to her horticultural background, talented team, hard work and innovation, Manbulloo now has farms scattered across Northern Australia.
With 800 hectares to play with, Manbulloo produces thousands of tonnes of premium mangoes each year. In 2015, supermarket giant Coles gave the business its supplier of the year award, recognising its commitment to delivering top-quality mangoes.
Nine years ago, Manbulloo became the first mango producer to start exporting Australian mangoes directly to mainland China and Korea. Fast-forward to today, and 10 per cent of Manbulloo’s crop, worth about $2 million, heads to mainland China, Korea, the US and Canada.
Its largest markets are China and South Korea – benefiting from the China-Australia Free Trade Agreement (ChAFTA) and the Korea-Australia Free Trade Agreement (KAFTA).
Ms Piccone says the arrival of KAFTA in December 2014 and ChAFTA in December 2015 was extremely welcome. Under ChAFTA, the tariff on fresh and dried mangoes is being steadily reduced from the 15 per cent rate currently in place for most competitors to 6 per cent in 2017, and will be eliminated by 1 January 2019. Under KAFTA, the original 30 per cent tariff is being reduced by 3 per cent every year until it is eliminated on 1 January 2023.
“Reducing the tariff each year to the point where it will be non-existent is extremely exciting,” Ms Piccone said.
Mango consumption in the Korean market has been increasing exponentially over the last five years. “There’s strong demand for mangoes from all over the world in the Korean market and Australian mangoes have got a really significant place there,” said Ms Piccone. “With the tariff reducing, our value proposition has become more competitive with mangoes coming from places like Central and South America, other parts of Asia and Africa. We are now a lot more competitive in terms of the retail price point.”
Loving the quality and flavour characteristics of Manbulloo’s mangoes, Ms Piccone said Koreans are prepared to pay a premium price. “Now with the reduction in tariff, that doesn’t have to be such a large premium. With each year that it reduces more, we can appeal to more consumers, who can buy more because Australian mangoes are more affordable. It also allows more retailers to carry much larger volumes.”
Manbulloo is already seeing staggering results coinciding with KAFTA. “Costco in Seoul started featuring Manbulloo mangoes two years ago,” Ms Piccone said. “In the first seven weeks, our Australian product caught up in terms of total sales revenue and overtook another country’s mangoes that had been selling well in their stores for seven years.”
This win has contributed to Manbulloo’s extraordinary surge in export sales. “Since the launch of KAFTA we have gone from exporting 10 tonnes to over 100 tonnes of mangoes to Korea. In the last year alone, export volume has doubled,” Ms Piccone said.
Although Ms Piccone said it is still early days in terms of the effects of ChAFTA, Manbulloo has seen a spike in enquiries from China and an increase in export sales. “The full impact of ChAFTA has yet to be seen. Australia is really at the beginning of this. As the tariff continues to drop, the demand will just grow exponentially.”
To keep up with the boom and prepare for the escalating demand as a result of the free trade agreements, Ms Piccone said: “We bought another farm in December 2015 to meet the high demand for our products. It extends our season so we can now supply Chinese and Korean Lunar New Year. We have also doubled our export workforce.”
Having exported for many years, Ms Piccone said the journey hasn’t been without hurdles. “Our biggest challenges, particularly in China, have been finding the right supply chain partners that share our marketing strategy and are prepared to invest in handling our mangoes so they taste and look great for consumers. This is as well as remaining price competitive.”
The price is especially relevant because of costly processes, including vapour heat treatment and government inspections necessary to meet quarantine protocols.
There is fierce competition in China and Korea, said Ms Piccone. “In China, they expect a really high-quality product, and they’re quite price-sensitive. And despite being the main Australian mango company exporting into Korea, we do have competition from mangoes from other parts of the world. So we have to make sure our product is an acceptable value proposition for Korean consumers.”
To make sure Manbulloo can work closely with its import partners and be more efficient and responsive, it has its own dedicated export company. “This also means we can be more cost-effective and return a better margin to the retailers, the importer and our farms,” Ms Piccone said.
Ms Piccone commended the introduction of the FTAs with three of Australia’s major trading partners.
“All three countries value Australian product, are geographically close, have expanding economies and an emerging middle class. We haven’t even hit the sides yet! The scale of the potential is wonderful – but the caution is we have to be highly professional and build the trust of our trading partners.
“We can definitely build our trade more quickly and it means more stable export trade, better profitability and long-term sustainability of Australian businesses.”
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