AN Australian juice company is embracing the potential of free trade agreements and taking on the Asian market.
With Woolworths, Coles and IGA as clients, Queensland’s Grove Juice produces 500,000 litres of juice per week.
Attracted by the launch of the free trade agreements (FTAs) with Korea, Japan and China, the grower and distributor is now entering markets in North Asia for the first time.
Grove Juice CEO, Andrew Ross, said several factors made it all happen.
“A combination of the launch of the FTAs, desire to export, lots of planning, market research, and discussions with Austrade as to where the opportunities were, led us to where we are now in Japan and Korea,” Mr Ross said.
The company started shipping juice directly to a major retailer’s warehouses in Korea and Japan for distribution.
Mr Ross said the business is now producing an additional few hundred thousand litres for the export market.
He said exporting on this scale wouldn’t have been likely before the FTAs were in place.
“It has made it a lot easier for us to get our products into Japan and Korea and onto the shelf at competitive prices,” Mr Ross said.
“We have to compete with a lot of other products in the market and up until now there have been significant duties. The reductions in tariffs have made a big difference.”
Under the Japan-Australia Economic Partnership Agreement (JAEPA), apple juice tariffs of between 19.1 per cent and 34pc were reduced to between 7.6pc and 13.6pc.
These tariffs will be reduced on April 1, every year, until they are eliminated in 2024. In Korea the tariff was as high as 54pc and will also be reduced to zero in the coming years.
Mr Ross said there is a trend in Asia for more Western-tasting products and styles.
“With more people travelling to Australia, they are tasting products like ours – premium fresh natural juice, which isn’t reconstituted; and it’s becoming something that they desire more and more,” he said.
Regardless of the demand for fresh juices with natural quality and taste, Mr Ross said that particularly with perishable goods there is only going to be a certain retail price consumers are prepared to pay.
“If someone’s adding 30pc to the product at the gate, it makes your product too expensive on the supermarket shelf,” he said.
“The FTAs are very important because without them, there are barriers to entry. Just getting that barrier down and opening up the product to people at a reasonable price makes a massive difference.”
The new market gives another revenue string to Grove Juice’s bow.
“With the extra funds coming in the door, we’re now looking to expand and experiment with different varieties, flavours and sizes,” Mr Ross said.
“It has also allowed us the time and resources to improve our knowledge and to invest in research and development around increasing shelf-life for exporting.”
Grove Juice has hired people to carry out the research and development.
“Because of the increased exporting, we have had to hire extra staff in our processing production area – which is good for regional development,” Mr Ross said.
He added this is just the beginning and he wants to take full advantage of the FTAs.
“We’re only in a small part of Japan and Korea at the moment. The exciting part is that now we are in the door we have the opportunity to really expand in the market. Without the FTAs we may never have had the opportunity.”
As well as expanding within Korea and Japan, Mr Ross said Grove Juice is exploring markets such as Malaysia and China, where FTAs have also been signed.
“China is totally different to Korea and Japan because of its vastness, but we are having meetings with some potential Chinese customers and looking at what we can do in that market.”
“Australia is seen as a clean, green environment and as long as we keep meeting our high standards, our Australian products will continue to grow and grow in stature.
“The more Australian businesses that jump on board and take advantage of the FTAs, the better.
“There will be more awareness and acceptance of Australian products, which in turn has the ability to be a very good part of everyone’s business.”
- Copy supplied by Austrade.