strategic r&d plan 2011 - 2016 - australian almonds ...australianalmonds.com.au/documents/final...

australian almonds

“A plan for the investment of industry and government funds to develop information, products

and services for the benefit of the Australian Almond Industry”

Strategic R&D Plan

2011 - 2016

Australian Almondswww.austral ianalmonds.com.au

Australian Almond Industry Strategic R&D Plan 2011-2016

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Almond Board of Australia Inc.9 William Street, PO Box 2246

Berri South Australia 5343

P + 61 8 8582 2055F + 61 8 8582 3503

E [email protected] www.australianalmonds.com.au

Horticulture Australia LimitedHorticulture Australia Limited (HAL) is a national research, development and marketing organisation that works in partnership with the horticulture sector to invest in programs that provide benefit to Australian horticulture industries. HAL is an industry owned company that invests approximately $100 million annually in projects. It currently manages around 1100 projects in a wide range of areas including marketing, quality assurance, food safety, industry communication, biotechnology,and other research areas including sustainability.

HAL is funded by statutory levies in Marketing and Research & Development from its member industries and also voluntary contributions received from grower associations, commercial enterprises and individuals. The Australian Government also contributes funds on a dollar for dollar basis for expenditure on Research & Development.

Almond Board of AustraliaAlmond Board of Australia (ABA) is the Peak Industry Body (PIB) for the Australian almond industry. The ABA is a not-for-profit, membership based organisation representing the interests of Australian almond growers, processors and marketers.

The ABA is registered under the South Australian Associations Incorporation Act 1985 and as a national body under the Australian Investments Security Commission (ASIC). The Board of Directors are appointed in accordance with the ABA’s Constitution.

As the Australian Almond industry’s peak body, the ABA facilitates further growth of the industry, seeks to maximise its profitability and ensure its sustainability by providing a platform for industry members to collectively respond to industry wide issues, invest in research and marketing, share knowledge, and interact with government and other stakeholders.

Horticulture Australia LtdLevel 7, 179 Elizabeth Street

Sydney New South Wales 2000

P + 61 2 8295 2300F + 61 2 8295 2399

W www.horticulture.com.au

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Foreword 4

Strategic Overview 5

1. Australian Almond Industry 7

Industry Snapshot

Industry Analysis

2. Research & Development Environment 15

Funding R&D

Setting R&D Priorities

Project Development

R&D Project Endorsement, Approval and Execution

Project Communication and Evaluation

3. Strategic Approach 21

Vision

Mission

Objectives

Strategies

4. Action Plan 25

5. Allocation of Funds 33

Investment Approach

Analytical Business Case

Portfolio Balance

Contents


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Recent years have seen significant expansion of Australian almonds. The industry is now planning for further production growth as young trees reach maturity. Current production is expected to double to more than 80,000 tonnes by 2015. It is also anticipated that further plantings will be undertaken over the next few years, generating additional production growth over the same period.

During this growth period, significant change has taken place both within the industry and in the external environment, with new challenges and opportunities emerging as a result.

This new Strategic R&D Plan for the Australian Almond Industry has been developed in this context, in order to guide future R&D investment over the period 2011-16.

There has been a long-term trend of increasing global consumption of almonds. This has been driven by a number of factors including the health benefits and versatility of almonds.

Australia has a worldwide reputation as a supplier of quality almonds. Few countries can efficiently produce the high quality almond that Australia provides. This gives Australia a powerful competitive position as an international supplier.

Importantly, this plan encompasses actions intended to protect the industry against threats - both current and potential threats, including exotic pest or disease incursions and environmental threats such as climate change.

This is an important document for our industry. It will be the template by which the industry moves through a period of strong growth, without compromising the value or global reputation of Australian almonds.

Julie HaslettChief Executive OfficerAlmond Board of Australia

Foreword

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Strategic Overview

Our ObjectivesDevelop & maintain market opportunities (volume sold)

Improved efficiency & sustainability (costs & risks)

Increase product value (quality & price)

Provide a supportive operating environment (skills & communication)

Our MissionOptimise profitability through innovation

Our VisionAs a profitable industry to lead in the efficient production, processing and marketing of quality almonds and secure a position of preferred supplier


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1. Australian Almond Industry


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1.1 Industry Snapshot

Almonds• Almonds are a healthy, versatile, natural food that has been consumed around the world

since ancient times.

• Almonds offer a unique matrix of nutrients and have been clearly linked with improved heart health.

• Almonds are extremely versatile, being a key ingredient in a vast array of products including: snack foods, confectionery, baking goods, breakfast cereals, and desserts.

Global Demand for Almonds• Worldwide demand for almonds is at an all time high, having more than doubled over the

past decade. During this period consumption growth has averaged 9% per annum during this period.

• This growth trend is expected to continue due to increased awareness of the positive health message and rapidly growing demand from developing markets.

• Taste and versatility of almonds have also been major factors behind this increase in consumption.

• Developing countries such as India, China and the Middle East are driving almond consumption growth.

Global Almond Production• Almond production is led by major world producer: California, where the value of almonds

exceeds US$2.3 billion.

• Almonds are California’s largest tree nut crop in both total value and acreage. They rank as the largest US specialty crop export, as well as the top agricultural export of the state of California, with export value of US$1.9 billion.

• Global almond supply is restricted by limited access to suitable growing conditions. Almonds are commercially produced in very few locations around the world, requiring a Mediterranean climate: cold winters during dormancy and warmer summers to develop the nut. Producing areas are further restricted by the need for suitable land and water availability.

Australian Almonds• Australia’s almond growing season commences with the magnificent almond blossom in

July and August each year. Harvest takes place in February and March, with produce ready for the market in April and May.

• Australia is known for its natural advantages in agriculture, including favourable climatic conditions and low incidence of pest and disease, delivering; cost advantages, high yields, product quality and integrity.

• The Australian almond industry is internationally competitive in both quality and cost.

• The Australian almond industry is one of the most efficient in the world, competing in international markets and operating without any production or export subsidies. Australia does not impose tariffs on imported almonds.

• Almonds are in high demand in many developing countries and Australia is well positioned to service these markets.

• Greater than 90% of almonds consumed in Australia are grown and produced by Australian farmers.

Producing Regions• Almonds are predominantly grown along

the Murray River corridor, across four Australian states:

• New South Wales • South Australia• Victoria• Western Australia

• Australia has four major almond producing regions:

• Adelaide• Riverland• Riverina• Sunraysia

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Almond Plantings• Total Australian almond acreage has increased six-fold over the past nine years: 4,600

hectares in 2000 to nearly 27,700 hectares in 2009.

• Approximately one quarter of Australian almond plantings have reached full maturity, being eight years and older.

• One third of total Australian almond plantings are non-bearing (less than three years).

• 90% of Australia’s almond plantings are drip irrigated, with less than 10% of plantings under sprinkler irrigation.

• Nonpareil is currently the major variety, representing more than 50% of plantings, followed by pollinator varieties: Carmel (31%) and Price (12%).

Almond Production• Australian almond production in 2009 totalled 36,500 tonnes.

• Future production increases will occur as young plantings reach full maturity, bringing productive capacity to greater than 80,000 tonnes by 2015, more than double that of 2009 production.

• Pollination is an essential input to the production process. Beehives are brought into the orchard during blossom season to cross-pollinate varieties.

Industry Growth• The Australian almond industry has undergone rapid expansion since 2001.

• On a percentage basis, Australia is the fastest growing almond industry in the world.

• In 2008 Australia produced 3% of world almonds, with California contributing to 85% of global production.

• It is forecast that Australia will surpass Spain (6%) to become the world’s second largest almond producer within the next few years.

Investment in Almonds• Almonds have become an attractive crop for investors because the industry has proven to

be profitable and stable over the longer term.

• Reasons for this include the ability to develop and manage orchards on a larger scale, together with the development of new growing technologies that have enhanced profitability and maintained international competitiveness.

Value of Almonds• The Australian almond industry has a current estimated value of more than $250 million,

including exports of $121 million.

• Additional production from newly planted orchards is expected to double the industry’s current value to greater than $500 million by 2015.

• Almonds are a valuable contributor to the Australian economy.

• Growing, harvesting, transporting, storage, processing, value adding and marketing of almonds are major contributors to the economic and social wellbeing of the regional production areas.

• The long-term outlook for the continuation of an economically viable, internationally competitive almond industry in Australia is extremely positive.

Information is based on 2009 data. For more information visit www.australianalmonds.com.au

Australian Almond Industry


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Post Harvest

Primary ProcessingSecondary Processing

Pre-Farm

BiosecurityBreeding & Evaluation

Tree Production

On-Farm

Pre-PlantAgronomy

Harvest

Market

BrandingDomestic MarketExport Markets

Consumer

Risk Management

Operating Environment

1.2 Industry AnalysisThe Industry Analysis identifies the key opportunities and threats, based on a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis.

The almond industry value chain has four main components (Figure 1):

• Pre-Farm• On-Farm• Post Harvest• Market

Figure � - Almond Industry Value Chain

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Pre-FarmThe Pre-Farm component of the Australian almond industry value chain specifically deals with the origin, source and cleanliness of the planting material used on-farm.

The industry is fortunate to have minimal pest and disease pressure with many damaging pests and diseases not being present in Australia such as the glassy-winged sharpshooter, almond seed wasp, navel orangeworm, peach twig borer, ten-lined June beetle, Varroa mite, almond leaf scorch, hyperplastic canker, phomopsis canker and European stonefruit yellows. Pre-border and border controls have to date prevented the introduction of these and other exotic pests and diseases into Australia.

The industry has also placed great emphasis on the genetic integrity and the high health status of its budwood supply. For over 20 years, the Almond Board of Australia has operated an industry-owned, and well supported budwood repository. This site provides not only high health budwood for commercial nurseries and tree production, but it also acts as a germplasm repository for the industry’s cultivar breeding program. A number of rootstocks are also located at this site. Programmed testing is conducted for the two major virus threats to the industry, Prune Dwarf Virus and Prunus Necrotic Ring Spot Virus.

The industry has been investing in an almond cultivar breeding program for over ten years and continues to see new variety development as a source of global competitive advantage provideing growers with superior agronomic improvements. Over the same period the industry has also imported overseas cultivars and rootstocks.

The almond industry does not as yet have a nursery accreditation scheme for commercial tree production; however it does encourage best practice in this area.

It is a high priority for the industry to continue to enhance the biosecurity status of planting material, orchards and pollination and to breed, evaluate and commercialise new cultivars and rootstocks.

On-FarmThe On-Farm component of the Australian almond industry value chain specifically deals with the production, harvest and on farm storage of almonds.

The industry currently has an estimated average yield of 3.0 tonnes per hectare and is fortunate to have several favourable circumstances for the production of almonds, including:• Current orchards planted on soils which are well drained• Current plantings are primarily planted on virgin almond soil with

little or no pre-plant pest or disease pressure• Adequate supplies of pollination services• Grown in areas with favourable climatic conditions with low pest

and disease pressure.

Conversely, the industry has some on-farm challenges, such as:• Almond orchards have a longer establishment period and are

consequently a longer term financial investment in comparison to other more intensive horticultural crops

• Orchard soils that are commonly alkaline, low in organic matter and low in nutrients

• Major reliance on traditional cultivars which have some agronomic weaknesses

• Minimal choice of new cultivars with similar market acceptance to that of traditional cultivars

• Australian almonds are grown in conditions of low humidity, high evaporation and consequently high water requirements

• The industry has been, and will continue to be faced, with issues related to water security and water availability;

• Australian almonds are grown in regions where predicted changes to climate may have negative impacts

• Food safety issues• Emerging pest and disease pressure• Longer harvest period increasing susceptibility to unfavourable

climatic conditions

It is a high priority for the industry to continue and enhance the productivity, sustainability and profitability of our orchards.

Pre-Farm

Biosecurity• Exotic pests & diseases

of plants & bees• Import of seed, pollen,

cultivars & rootstocks• Post entry quarantine• Germplasm resource

Breeding & Evaluation• Breeding new Australian

cultivars• Evaluation of Australian

and overseas cultivars & rootstocks

• Commercialisation of new cultivars & rootstocks

Tree Production• Budwood repository• Rootstock propagation• Tree production• Nursery certification

On-Farm

Pre-Plant• Soil remediation &

preparation• Orchard design• Cultivars & Rootstocks

Agronomy• Soil health• Tree architecture &

training• Pollination efficiency• Irrigation efficiency• Optimal nutrition• Plant growth regulation• Integrated pest &

disease management• Climate Variability and

adaption

Harvest• Maturity assessment• Yield mapping• Harvest systems• On-farm product

storage



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Post HarvestThe Post Harvest component of the Australian almond industry value chain specifically deals with off-farm storage, primary processing and secondary processing of harvested almonds. This is a critical segment of the industry, but an area which has historically had minimal levy funded R&D and relied predominantly on R&D conducted by private operators.

This part of the industry has an emphasis on high quality product that is sorted, sized and packed to strict specifications. However, with the predicted supply to increase by more than twofold by 2015 to 80,000 tonnes, there is an increasing requirement to focus on post harvest issues.

Key R&D opportunities for Post Harvest include:

• Development of improved on-farm and off-farm product storage as a hedge against food safety issues

• Capturing efficiencies related to primary and secondary processing, product classification and well defined quality specifications

• Food safety prevention, measurement and management• Supply chain quality assurance• Alternative uses of processing by-products• Value adding, packaging, logistics, and distribution

It is a high priority for the industry to build and enhance the post harvest management of the industry’s almond produce.

MarketThe market component of the Australian almond industry value chain specifically deals with sales and marketing aspects, including generic branding of Australian almonds, transacting sales in both domestic and export markets and understanding and meeting customer and consumer requirements. The market sector is an area which has recently gained momentum, emphasis and attention as production levels have, and will continue to, increase over the next five years.

Australia is soon to become the second largest global producer of almonds, consequently becoming increasingly reliant on marketing initiatives to deliver an increased share of world trade without sacrificing profitability.

Key R&D opportunities for the Market component of the value chain include:

• Market research and ongoing intelligence in both domestic and export markets

• Market development in both domestic and export markets• Private R&D initiatives (VC funded) to develop new, differentiated

almond products• Developing whole-of-industry relationships with customers,

retailers etc• As a means of reaching consumers, promulgating the health

benefits of almond consumption to health food professionals, medical practitioners

It is a high priority for the industry to build markets and to enhance the profitability of Australia’s almond produce.

Post Harvest

Primary Processing• Product storage• Hulling & shelling• Product sizing• Logistics

Secondary Processing• Product classification• Product development• Product packaging• Distribution

Market

Branding• Clean & green

attributes• Quality attributes• Product differentiation

Domestic Market• Trade communication• Market research &

intelligence• Market development

Export Markets• Market research &

intelligence• Market development• Identifying new market

opportunities• Logistics• Market access

Consumer• Consumer research• Educating health

professionals

Risk Management• Crisis management & response• Food safety• Quality Assurance

Operating Environment• Industry cohesion• Leadership & skills• Research capacity• Communication & extension• Internal collaboration

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Pre-FarmBiosecurity

• Exotic pests & diseases of plants & bees

• Import of seed, pollen, cultivars & rootstocks

• Post entry quarantine• Germplasm resource

Breeding & Evaluation• Breeding new Australian

cultivars• Evaluation of Australian and

overseas cultivars & rootstocks• Commercialisation of new

cultivars & rootstocks

Tree Production• Budwood repository• Rootstock propagation• Tree production• Nursery certification

On-FarmPre-Plant

• Soil remediation & preparation• Orchard design• Cultivars & Rootstocks

Agronomy• Soil health• Tree architecture & training• Pollination efficiency• Irrigation efficiency• Optimal nutrition• Plant growth regulation• Integrated pest & disease

management• Climate Variability and adaption

Harvest• Maturity assessment• Yield mapping• Harvest systems• On-farm product storage

Post HarvestPrimary Processing

• Product storage• Hulling & shelling• Product sizing• Logistics

Secondary Processing• Product classification• Product development• Product packaging• Distribution

MarketBranding

• Clean & green attributes• Quality attributes• Product differentiation

Domestic Market• Trade communication• Market research & intelligence• Market development

Export Markets• Market research & intelligence• Market development• Identifying new market

opportunities• Logistics• Market access

Consumer• Consumer research• Educating health professionals

Risk Management• Crisis management & response• Food safety• Quality Assurance

Operating Environment• Industry cohesion• Leadership & skills• Research capacity• Communication & extension• Internal collaboration


Almond Industry Value Chain


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2. Research & Development Environment


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Figure 2 - Australian Almond R&D Structure


R&D Benefits & Outcomes

Research & Development

Programs

Statutory Levy Payers

Almond Growers

Voluntary Contribution Funds

ABA, Commercial Operators, Research

Partners etc

Co-InvestmentGovernment

Research Partners

Australian Government

Horticulture Australia Limited

Strategic Committees

Industry Advisory Committee

Marketing Committee

Processing Committee*

Production Committee

Plant Improvement Committee

Almond Board of Australia

2.1 Funding R&DThe funds available for research and development projects are typically a combination of levy or voluntary contributions from the almond industry, which are matched by the Australian Government through Horticulture Australia, and may include an additional investment by the research provider.

*To be established

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Statutory R&D Levy All almond producers pay a statutory R&D levy at the first point of wholesale sale. Levies are collected by the Levies Revenue Service - a unit within the Commonwealth Department of Agriculture Fisheries and Forestry, and made available to Horticulture Australia for R&D. The Australian Government matches the amounts raised from almond levy payers upon expenditure through HAL on projects within the almond R&D program. Levy rates are:

• Almondsinshell 1cent/kg• Shelledalmonds 2cents/kg• Almondsinshell(Nonpareil) 1.5cents/kg

Note:AllfiguresarenetofGST.

Voluntary Contribution FundsAlongside levy funded R&D, HAL has the Voluntary Contribution (VC) mechanism for funding industry R&D. “Voluntary Contributions” are sums of cash, contributed by an industry member (a company, organisation, a grower or group of growers, etc) that can be matched with Commonwealth funds for R&D contracted R&D. While levy funds are used for HAL projects that benefit the whole industry, VC funds can be used for projects that mainly benefit the voluntary contributor.

The ABA utilises a range of income sources to fund R&D initiatives through the voluntary contribution model. ABA’s funding sources include a Voluntary Marketing Contribution and almond budwood sales.

Co-Investment FundsState government R&D agencies, CSIRO, Universities and other research providers often have R&D objectives which overlap with industry and Commonwealth objectives. Where this occurs, an opportunity exists for the research providers to co-invest in research projects and thus maximise funding leverage, research efficiency and outputs achieved.

R&D Environment

Statutory Levy Payers

Almond Growers

Voluntary Contribution Funds

ABA, Commercial Operators, Research

Partners etc

Co-InvestmentGovernment

Research Partners


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2.2 Setting R&D Priorities Almond Board of AustraliaThe ABA, as the recognised Industry Representative Body (IRB), is responsible for the consultation with industry levy payers in relation to the R&D program, levy rates and recommending membership of the Industry Advisory Committee (IAC). The ABA arranges an Annual Levy Payers Meeting at which the HAL Annual Report to levy payers is presented.

R&D priorities are guided by the Almond Industry R&D Plan and the Australian Government’s R&D investment priorities.

Australian Government R&D PrioritiesThe Australian Government sets investment priorities for the funds it makes available for match investment in R&D. These priorities (the Rural Research and Development Priorities) aim to foster innovation and guide R&D initiatives in the face of continuing economic, environmental and social change.

1. Productivity & Adding Value – Improve the productivity and profitability of existing industries and support the development of viable new industries.

2. Supply Chain & Markets – Better understand and respond to domestic & international requirements and improve the flow of such information through the whole supply chain, including to consumers.

3. Natural Resource Management – Support effective management of Australia’s natural resources to ensure primary industries are both economically and environmentally sustainable.

4. Climate Variability & Climate Change – Build resilience to climate variability and adapt to and mitigate the effects of climate change.

5. Biosecurity – Protect Australia’s community, primary industries and environment from biosecurity threats.

6. Innovation Skills - Improve the skills to undertake research and apply its findings.

7. Technology - Promote the development of new and existing technologies.

Almond R&D investment is closely aligned with these priorities (Figure 3).

Figure 3 –2��9/�� Almond R&D Program funding allocated against the Australian Government priorities for rural R&D

Industry PrioritiesThe process of identifying R&D priorities is assisted by four Strategic Committees:

• Plant Improvement Committee - Supply and delivery of world competitive genetics to develop improved cultivars of almond trees

• Production Committee - Production issues to ensure the costs, quality and value of Australian almonds remains world competitive

• Processing Committee – Dealing with the issues related to primary and secondary processing (to be established)

• Marketing Committee - Coordination of market research (domestic and export) and the subsequent development of marketing strategies.

Committee membership is formed from industry leaders and skills based appointments, providing a convenient access point for levy payers. These Committees also monitor the progress of R&D projects.

Productivity & Value Adding (25%)

Supply Chain & Markets (33%)

Natural Resources Management (8%)

Climate Variability & Climate Change (6%)

Biosecurity (7%)

Innovation Skills (11%)

Technology (10%)

Australian Government

Strategic Committees

Marketing Committee

Processing Committee*

Production Committee

Plant Improvement Committee

Almond Board of Australia

*To be established

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2.4 R&D Project Endorsement, Approval & ExecutionEndorsement of Projects - Industry Advisory Committee (IAC)The IAC is a subcommittee of the HAL Board. The ABA recommends membership of the IAC to HAL, ensuring that the required skills and knowledge of the almond industry are present on the IAC. The Almond IAC is composed of an Independent Chair, members nominated by the ABA, with the ABA CEO and the HAL Industry Services Manager acting as ex-officio members.

The three key responsibilities of the IAC are to:

1. Prepare a research and development plan (3-5 years) to establish the strategic direction of HAL’s investment of R&D and marketing funds for the industry, and a plan for communications with levy payers.

2. Prepare an annual investment plan submit it to HAL. This plan determines the annual expenditure for projects that contribute to the outputs listed in the R&D plan.

3. Produce an annual report for industry levy payers and HAL. The report details the achievements from research and extension projects.

R&D proposals are assessed against set criteria by the appropriate HAL project manager. The project manager’s assessment and recommendation is submitted to the IAC, who then consider consider the proposals. Endorsed projects are included in the Annual Investment Plan submitted to the HAL Board for approval. In developing the Annual Investment Plan, the IAC provide input on the estimated levy income for the financial year ahead, and also the appropriate level of levy reserves required to maintain future funding committments.

Execution and Management of Projects – Horticulture Australia Limited (HAL)Once the Annual Investment Plan is approved by the HAL Board, endorsed proposals will undergo the appropriate approval process. Once approved, the project is contracted by HAL with research provider.

Contracted projects are managed by a milestone reporting and payment process. The research provider reports at prescribed dates on the progress of the project against documented milestones. If progress is approved by the HAL project manager, payment is made. Milestones can be varied by mutual agreement; this may be a result of delays in research or to capture more opportunities arising from the project. Significant variations to contracts are normally considered by the Industry Advisory Committee, and recommended to HAL for approval.

The ABA provides extension services to R&D projects. This ensures project outputs are well communicated to the almond industry, and new developments are integrated with existing industry practice.

In addition to the contractual arrangements between HAL and the research provider, the ABA may establish an industry reference group to assist, advise and mentor the research team. Where additional expertise is required to improve progress or capture new opportunities, the involvement from scientific or commercial people with specific skills relevant to the issue may be called upon to review or contribute to the project.

Horticulture Australia Limited

R&D Environment

Industry Advisory Committee

2.3 Project Development New research projects are developed by research providers in response to either the posting of industry priorities on the HAL website or by inviting prospective research providers to submit tenders based on a project brief. Proposals should be submitted through the HAL website as part of the annual “industry call” or VC projects can also be submitted during the “general call”. In years where matching funds are not fully allocated, out of call proposals may be considered. Research providers may seek additional technical or industry background on the context of the research priorities and required outputs of the projects from HAL or the ABA.


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2.5 Project Communication and Evaluation Outputs from R&D intiatives such as: new products, equipment and training programs are conveyed to the broader industry as part of the communication strategy. Information relevant to producers is delivered via a range of communication tools including:

• conferences• forums• fact sheets• newsletters• field days; and• electronic communication

Emphasis is placed on utilising the most effective approach for reaching the intended audience, to support the adoption of research.

A structured evaluation process can be used to assess changes in practice, additional knowledge and services, and the economic benefits derived from major projects. This evaluation is useful in guiding future investment in the priority areas, improving research, extension and commercialisation processes, and documenting the return on investment to stakeholders.

R&D Benefits & Outcomes

Research & Development

Programs

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3. Strategic Approach


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Objective 3Improved efficiency &

sustainability (costs & risks)

Objective 1Develop & maintain

market opportunities(volume sold)

Objective 2Increase

product value (quality & price)

Objective 4Provide a supportive

operating environment (skills & communication)

MissionOptimise profitability through innovation

VisionAs a profitable industry to lead in the efficient production, processing and marketing of quality almonds and secure a position of preferred supplier

Strategies Strategies Strategies Strategies

ActionsActions Actions Actions

3. Strategic ApproachThe strategic approach used in this Plan has five main components:

1. Vision: “the bigger picture” – where the industry wants to be at a particular point in the future.2. Mission: Defining the industry, its key purpose and values.3. Objectives: Outcomes that need to be achieved to deliver the vision.4. Strategies: How the objectives will be achieved.5. Action Plan: Who will do what, by when, to implement the identified strategies.

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3.1 VisionThe Vision of the Australian almond industry for its future R&D investment is:

• “As a profitable industry...” - profitability drives investment leading to development and growth across the value chain.

• “...lead...”- leading rather than following, taking a visionary approach.

• “...in the efficient...” – efficiency and cost effective use of resources.

• “...production,processingandmarketing...” - the Vision for the plan extends across the entire value chain and recognises the segments are interlinked and co-dependent.

• “...of quality almonds...” - the Australian industry has a reputation for supplying quality product and it is aimed to retain this position.

• “...and secure apositionofpreferred supplier” – achieved by meeting product specifications and maintaining positive relationships with key customers.

3.2 MissionThe Mission of the Australian almond industry for its future R&D investment is:

The Mission is seen as both a driver for the industry’s R&D investment and as the “applicability test” for R&D projects.

• “Optimise profitability” - As with the Vision; the Mission statement has an emphasis on profitability. The word “optimise” was added to indicate sustainability and taking the long term, sustainable view of profits.

• “...through innovation” - Innovation is at the heart of R&D. Implied in this statement is the adoption and commercialisation of innovation across the value chain, to drive and sustain profitability.

3.3 ObjectivesThe Objectives of the Australian almond industry for its R&D investment are:

Objective 1: Develop and maintain market opportunities (volume sold)

Understand consumer and customer needs in domestic and export markets to increase demand for Australian almonds.

Objective 2: Increase product value (quality and price)

Ensure the price of Australian almonds is maximised by maintaining a reputation as a reliable supplier of high quality almonds for different market segments.

Objective 3: Improved efficiency and sustainability (costs and risks)

Improve the productivity and international competitiveness of the Australian almond industry and protect it from threats.

Objective 4: Provide a supportive operating environment (skills and communication)

Support industry development through enhancement of the operating environment (i.e. leadership, skills development, partnerships, communication, extension, R&D resources).

VisionAs a profitable industry to lead in the efficient

production, processing and

marketing of quality almonds and secure a position of preferred

supplier

MissionOptimise profitability through innovation





Objective 2Increase product value

(quality & price)



Strategic Approach


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Objective 2Increase product value

(quality & price)



Strategy 3.1Improve productivity & competitiveness across

the value chain

Strategy 3.2Safeguard industry production and marketing systems from potential biosecurity threats

Strategy 3.3Support sustainable almond production

Strategy 3.4Facilitate access to

superior plant material

Strategy 1.1Enhance capability to build the

Australian almond brand through market &

consumer research

Strategy 1.2Identify & develop

new market opportunities

Strategy 1.3Research & educate key

influencers about the health benefits of almonds

Strategy 2.1Establish practices to

enhance product quality throughout the value chain

Strategy 2.2Promote food safety

practices from production through to consumption

Strategy 2.3Develop and enhance product differentiation

Strategy 4.1Enhance skills and capacity

to support current and future industry needs

Strategy 4.2Develop and deliver effective R&D programs that support

the Strategic Plan

Strategy 4.3Support adoption of

R&D outcomes by effective extension

Strategy 4.4Facilitate the two-way

flow of information through the value chain

3.4 StrategiesIn order to achieve the objectives, a number of high level strategies have been identified.

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4. Action Plan


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Objective 1: Develop and maintain market opportunities (volume sold)

Strategy 1.1 Enhance the capability to build the Australian Almond Brand through market & consumer research

Actions

• Identify priority markets and/or market segments• Conduct analysis of key markets including customer specifications, government/trade requirements & consumer preferences• Develop strategies for marketing Australian almonds in selected markets based on research findings• Collect & analyse ongoing market intelligence & scan data

Outputs • Market strategy for prioritised markets based on ongoing market intelligence

Industry Outcomes • Australia’s share of the targeted export markets increases to accommodate the increase in almond production.• Domestic consumption of Australian almonds grows at 7% per annum

Strategy 1.2 Identify & develop new market opportunities

Actions • Encourage commercial investment in confidential projects to scope research & test new market opportunities

Outputs • Confidential information that supports the development of new market opportunities

Industry Outcomes • New & existing markets are developed for Australian almonds

Strategy 1.3 Research & educate key influencers about the health benefits of almonds

Actions • Initiate research with respect to health benefits associated with almonds• Undertake education programs targeting key influencers

Outputs • Information packages and educational materials

Industry Outcomes • Health professionals & other key influencers promote almonds as a part of a healthy diet

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Action Plan

Objective 2: Increase product value (quality and price)

Strategy 2.1 Establish practices to enhance product quality throughout the value chain

Actions• Develop & implement industry quality certification program• Investigate improved drying procedures• Investigate technologies to objectively measure moisture content of kernels

Outputs• A quality certification program• Technologies to enable high moisture kernels (i.e. >7%) to be dried with no detriment to fruit quality• Technologies for measuring kernel moisture on-farm & prior to harvest

Industry Outcomes • Australian almonds maintain their high quality reputation• Industry has adopted agreed minimum quality standards & consistent protocols for providing evidence that product meets specifications

Strategy 2.2 Promote food safety practices from production through to consumption

Actions

• Identify food safety critical control points throughout the value chain• Understand the potential for microbial contamination in stockpiles• Address identified risks by developing technologies & protocols to help eliminate, reduce and/or manage associated risks • Facilitate education & training about key food safety risks, improved product traceability & management protocols

Outputs• A best practice management program illustrating the critical control points & guidelines for managing these risks across the entire supply chain for microbial

contamination & management• Food safety simulation exercises with industry participation

Industry Outcomes • Food safety issues minimised• Australian almonds maintain a positive food safety reputation

Strategy 2.3 Develop and enhance product differentiation

Actions

• Obtain credible data that can be used to differentiate Australian almonds on the basis of product integrity, food safety, environmental credentials & quality parameters

• Conduct consumer research to assess consumer taste & product attribute preferences• Encourage development of value-added products in response to consumer research findings

Outputs• Credible data packages for the industry to differentiate Australian almonds• Consumer research data to guide product development• A range of new almond products

Industry Outcomes • Customers have access to a range of new, high value products • Customer confidence in Australian almonds increased


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Strategy 3.1 Improve productivity & competitiveness across the value chain

Actions

• Develop practices to optimise: pollination efficiency, water use efficiency, nutrition efficiency (and sustainability)• Develop precision application methodology & systems for water, nutrition & pesticides to manage & reduce orchard variability• Develop a whole of supply chain Integrated Pest and Disease Management program• Investigate the potential for “one pass harvesting”• Review & improve industry processing technologies & procedures

Outputs

• Best practice & technologies for: pollination, water use, pest & disease management and nutrition• Precision horticulture systems• One pass harvesting scoping study industry to assess feasibility• Processing review document and workshop

Industry Outcomes

• Australian almond orchards remain highly productive:• Achieve industry average yield of 3.8 T/Ha (3 year rolling average)• Maintain costs of production at 2009/10 levels (i.e. $3/kg)• Water use efficiency enhanced, as indicated by growers achieving a benchmark figure of at least 280 kg/ML

• Losses from pest & disease reduced• Pollination management becomes a minor risk to almond production• Improved processing efficiency

Strategy 3.2 Safeguard industry production & marketing systems from potential biosecurity threats

Actions

• Ongoing assessment and prioritising of biosecurity threats to almond production and pollination• Support the monitoring of both the almond and pollination industries for the presence of exotic pests and diseases• Develop and review incursion management plans including appropriate quarantine measures• Train industry in the use of incursion management plans

Outputs

• Biosecurity manual for both the almond industry and the pollination industry• Almond industry biosecurity crisis response management program encompassing both production and pollination.• National beehive surveillance program (continued & enhanced)• National almond exotic pest and disease surveillance and reporting network• Consistent, up-to-date protocols for testing imported prunus pollen, seed, budwood & trees for exotic & endemic pests & diseases• Simulation workshops for exotic beehive pests & diseases (enhanced & continued)

Industry Outcomes • The almond industry is protected from biosecurity threats• If an incursion was to occur, damage is minimised

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Action Plan

Strategy 3.3 Support sustainable almond production

Actions• Develop practises to encourage sustainable soil health• Assess the impact of climate variability & climate change on almond orchards• Investigate alternative uses of processing waste, i.e. husks & shells

Outputs• Best practice soil health management technologies • Report developed to assess almond production in relation to potential climate variability & climate change scenarios • Review to evaluate alternate uses for processing waste, including financial assessment of alternatives

Industry Outcomes

• Soil acidification / salinity mitigated• Industry practices enhance promotion of soil biology• Australian almond industry’s carbon and environmental footprint reduced• The value of almond husks & shells is increased to finance cracking costs

Strategy 3.4 Facilitate access to superior plant material

Actions

• Commercially focussed cultivar breeding program• Evaluate promising cultivars & rootstocks• Develop a commercialisation plan by 2013 for cultivars developed through the breeding program• Establish an almond nursery accreditation scheme for the production of nursery trees by 2012• Develop and promote recommended rootstock propagation protocols for use by nurseries• Establish & sustain a secure cultivar & rootstock almond germplasm repository

Outputs

• Alternative pollinator for Nonpareil • Commercialisation plan developed for promising cultivars and rootstocks• Tree accreditation scheme developed• Rootstock & cultivar propagation protocols developed• A secure almond germplasm repository

Industry Outcomes • The almond industry is provided with consistent supply of world leading virus-free rootstocks & varieties



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Strategy 4.1 Enhance skills & capacity to support current & future industry needs

Actions

• Facilitate & support initiatives to develop:• Young leaders• Research capacity• Skills base across the industry• Secondary & tertiary students following a career in horticulture

• Phil Watters Award to be awarded every two years via a competitive nomination process• International study trips organised and industry involvement encouraged

Outputs

• Phil Watters Award• Scholarships to support tertiary institutional research• Training programs for industry stakeholders • Career days, field days & information sessions to promote almonds & horticulture to students & teachers• International study trips

Industry Outcomes • Industry capacity is enhanced through increased skills development

Strategy 4.2 Develop & deliver effective R&D programs that support the Strategic Plan

Actions

• Prioritise strategies & actions requiring R&D projects• Calculate projected funds from statutory levies & voluntary contribution funds• Identify strategic partners to better leverage funds• Implement the plan by appointing R&D providers for priority R&D projects• Monitor and evaluate implementation of the R&D Strategic Plan via a formal review• Monitor skills required for each of the strategic committees & address any gaps

Outputs

• Strategic Plan for the Australian Almond Industry• Project briefs for all priority strategies within each Objective• Processing sub-committee established• Evaluation Reviews of R&D Strategic Plan (Years 3 & 5)

Industry Outcomes • The industry has a strong R&D plan• The R&D projects commissioned achieve the Outputs.

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Strategy 4.3 Support adoption of R&D outcomes by effective extension

Actions• All R&D projects to include an adoption plan, budget & resource allocation for extension & technology transfer• ABA is to be written into all project applications to ensure active involved in the extension process• Develop demand driven publications, products & services

Outputs

• Extension publications, products & services, including fact sheets, field days, workshops and training sessions• Project updates included in newsletters• Final project reports available on the ABA website• Regular survey of stakeholders to evaluate technology transfer• Analysis of technology transfer

Industry Outcomes • High level uptake of R&D outcomes by industry

Strategy 4.4 Facilitate the two-way flow of information through the value chain

Actions

• Ongoing collection & dissemination of industry statistics• Develop & implement a communication strategy• Fostering opportunities for value chain interaction including the Annual Almond Conference & Marketing Forum• Evaluate the effectiveness & appropriateness of communication practices

Outputs

• Publications disseminating industry statistics• Communication initiatives including website updates and e-newsletters• Annual Almond Conference & Marketing Forum• Annual communication effectiveness survey

Industry Outcomes

• Proportion of stakeholders accessing the ABA’s website increases• All stakeholders across the value chain are informed & engaged• Decision making across all areas of the almond supply chain are supported through access to timely & relevant information• Industry statistics are up-to-date & readily available in a range of formats

Action Plan



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5. Allocation of Funds


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5.1 Investment ApproachOver the next five years, the Australian almond industry’s investment in R&D will be driven by the objectives, strategies and actions identified in this Strategic R&D Plan.

The plan has been developed to reflect both industry priorities and the Australian Government’s Rural Research and Development Priorities, as outlined on page 18. The ABA and HAL will seek to keep this plan updated, in line with industry priorities and the Australian Government’s rural R&D priorities, through a regular review of the plan as noted in Strategy 4.2 (p.30)

5.2 Analytical Business CaseThe process of justifying and prioritising R&D objectives and strategies, and the associated allocation of investment involved the development of an analytical business case. An assessment of the costs and benefits associated with each objective were assessed, thereby providing an indication of the expected return on investment (ROI).

This process provided rigour and comparison between competing research and development investment areas, using both subjective and objective tools. R&D objectives and strategies were ranked based on urgency, importance, impact and likelihood of success and then the potential benefit assessed in relation to the expected costs. Benefit cost analyses were completed for the major program areas of each Objective.

The information provided through this process has been used in determining allocations between competing areas of investment in this plan.

5.3 Portfolio BalanceThe expected distribution of R&D investment funds across the four objectives is shown in Figure 5 mapping expected expenditure over the period of the plan 2011-16. It is expected that the investment allocations across the plan period will remain relatively stable, but may be adjusted to reflect changes in the industry and/or Australian Government priorities.

Figure 5 - Allocation of R&D investment by almond industry objective, 2011-2016

Objective 1: Develop & maintain market opportunities - volume sold (20%)

Objective 2: Increase product value - quality & price (15%)

Objective 3: Improved efficiency & sustainability - costs & risks (34%)

Objective 4: Provide a supportive operating environment - skills & communciation (31%)

Volume Sold 20%

Quality & Price 15%

Skills & Communciation 31%

Costs & Risks 34%

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Australian Almondswww.austral ianalmonds.com.au

Almond Board of Australia Inc.ABN 31 709 079 099

9 William Street, PO Box 2246Berri South Australia 5343

P + 61 8 8582 2055F + 61 8 8582 3503

E [email protected] www.australianalmonds.com.au

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