Queensland-based grower-packer-marketer Favco has moved to acquire the Riversun Exports brand and trademark.
Riversuns’ shareholders voted to cease trading under the company’s name last month, seemingly bringing an end to the entity that was once Australia’s single-desk citrus exporter to the US.However, Favco director Chris Deveny said that after two decades of being a symbol for high quality Australian citrus, the brand was just too valuable to see disappear.
“It’s a shame Riversun couldn’t continue in its former format but unfortunately that’s the nature of the industry,” Deveny told Asiafruit. “It’s a brand that is obviously recognised in the US for its longevity and its quality, and we feel it will continue to provide us with strong demand in this market.”
Deveny said all Riversun fruit would continue to be traded into the US under an exclusive arrangement with D&E, a US-based firm that acted as Australia’s single-desk importer in the US until 2012. The majority of fruit to marketed under the Riversun brand will continue to come from the tri-state are in south-eastern Australia, where Riversun had been headquartered.“In terms of structure, not much will change at all,” Deveny said.
Asian introduction
One potential shift will be the introduction of the brand into Asia. Riversun citrus entered China for the first time this season, with Deveny expecting to send more fruit to the People’s Republic, and surrounding markets, over the coming seasons.
“The fruit industry is a small place and I’m sure there are companies in China who recognise and identify with Riversun,” he says. “We deal with retailers and importers across Asia, so this gives our current and perspective customers another point of reference when dealing with us.”
Shape of the US market
In terms of the US market, a temporary minimal pricing structure has existed over the last two seasons to help exporters transition to trade outside the single-desk model.The structure is due to expire in January 2015, with Citrus Australia currently gauging the level of industry interest in extending the minimum price period.
“There are both staunch supporters and detractors for the idea, so we are now surveying members to see where the balance lies,” Citrus Australia’s market development manager, Andrew Harty, explained.
A strong Australian dollar has made for unfavourable trade conditions in the US over recent seasons, particularly with the emergence of lower-cost Southern Hemisphere suppliers.While some believe it is too late for Australia to win back the ground it has lost in the US, particularly seeing as many exporters are turning their attention to Asia, Harty is confident demand for Australian fruit will again ensue.
“The dollar is again slipping in the right direction now, but there is no doubt the conditions for the likes of Chile and South Africa are far more favourable,” Harty told Asiafruit.“Having said that, the total Southern Hemisphere volume into the US has increased steadily over recent seasons. If we are able to get more competitive market conditions our market share is likely to improve rather then decline.”
Versatile brand
Deveny agreed, saying he saw potential for both the Favco and Riversun brands across all global markets.“Australia has been a benchmark for high quality citrus for a long time,” he explained. “Riversun’s standing the US market is proof of this and we are confident this will continue to be the case as we take this brand further abroad.”
