Horticultural producers in New Zealand and Australia are having to come to terms with an ongoing evolution of consumers, grocery retail market dynamics and global trade, according to a new industry report released by Rabobank.

In its report New Zealand and Australia Horticulture, Rabobank says that supply and end-markets have all changed markedly, and growers need to think smartly about adapting for success.

The report says heightened competition in the grocery retail sector is also spreading to the produce category, as rising income levels and fundamental shifts in how people live, continue to drive changes in consumer behaviour.

Report co-author, Rabobank senior analyst Marc Soccio, says major grocery chains are placing more emphasis on fresh produce, to better meet customers’ demands.

He says improved logistics and the growing reach of global food marketers, has increased competition amongst horticulture suppliers around the world.

As a result, some producers in New Zealand and Australia, have suddenly found themselves in more direct competition.

Recent examples include the relocation of Australian-based vegetable processing facilities to New Zealand, and the lifting of the import ban on New Zealand apples in Australia.

New Zealand suppliers’ focus on export market, has driven the country’s surplus trade balance in horticultural produce in recent years, but has also taken a hit because of the high New Zealand dollar and diseases such as Psa currently affecting the kiwifruit industry.

The report says not only do horticultural producers need to continue to make fruit and vegetables more convenient to consume, they also have to get organised.

"It seems old-fashioned to talk about cooperatives, but when they’re managed well, they can clearly add significant value for primary producers,” the report says.