Olivado adding value to avocados while replenishing farmers’ pockets

Olivado adding value to avocados while replenishing farmers’ pockets

By Steven Mulanda

Avocado farming in Kenya and across the globe has grown in leap and bounds. Many are tapping into cultivation of this green gold, as it is popularly being referred. It has grown to high levels, from the times when it was chided to be dog’s food (maguna ngui, in Kikuyu dialect) to the current, one of the highest income generating ventures. Before Feurte, variety used to be the most grown and favored in the local and export market but of late it has been overtaken by Hass variety.

The Olivado Story

Olivado is a global company headquartered in New Zealand and has spread its forays in Africa. In Kenya, they found a haven for avocado farming to realize their dream of producing the world’s first extra virgin oil. The company has been a godsend as it has been able to agglomerate more than 3000 farmers, offering them handsome returns for their avocados.

The Olivado story began at the very beginning of the 21st century, in Kerikeri, in the beautiful Bay of Islands near the top of New Zealand’s North Island. An innovative team, comprising of a former chef, a legal brain, a marketing whiz, an internationally renowned food scientist, and an international investor, working together with scientists at Massey University, New Zealand’s premier Food Science University, pioneered and perfected the process of oil extraction from the avocado. The unique process they developed is used exclusively in the Olivado’s extra virgin avocado oil, which uses just the pulp of the avocado.

Speaking to Olivado EPZ Ltd, Kenya General Manager Mr. Peter Mwangi who is erudite in matters of avocados, he opines that the company first set up shop in Kenya in 2007 in Embakasi before relocating to off Kenol-Sagana Road, in Mirira, Murang’a County, in search of a bigger place to construct bigger premises. Muranga County was ideal because it’s the epicenter of avocado farming in Kenya. Avocado oil is a gem because of its many health myriads; it is a replacer to the cholesterol for the heart and the entire cardio-vascular system, it also has anti-aging properties especially when applied on the skin and frees the radicals as well as being an anti-cancer agent.

Avocado Prospects

“The prospects for avocado globally are increasing exponentially. Though Kenyans are planting avocados in plenty, consumption is at extremely large proportions. For instance, in most high end hotels, a customer has to take a slice of avocado in pudding or salad.

USA is consuming 50% of the globally grown avocados with majority of them emanating from Mexico. Europe is consuming 40% and Africa is part of the supply of the fruits to the European market. On the other hand, Asia with a consumption rate of 10%, its uptake of avocados is increasing exponentially and in large volumes due to their high population and their ever increasing demand. Projection is that Asia is going to overtake Europe in terms of demand from Africa; which means the positive outlook of avocado is here to stay,” said the General Manager.

Fresh Exports

The export market has evolved and so has Olivado, with demand being on Hass avocados. Hass variety has a higher shelf life due to its relatively rough skin compared to other varieties and also fetches good prices in the market.

The success of Olivado’s extra virgin avocado oil, led them to establish a pack house in Kenya for fresh exports, supplying quality fresh hass avocados to UK, Netherlands, France, and Germany. Their Hass avocados are destined for export market and the rejects which cannot fit into the export requirements are crashed into oil. “We are still crashing feurte and Hass rejects for oil. Hass that is good quality for export, we are exporting it as fresh produce. We currently have two facilities in our premises; Olivado Fresh for fresh avocados and Olivado EPZ which is dealing with extra virgin avocado oil. These two facilities are run by Hopetoun EPZ,” Mwangi elaborated.

The Biogas and Avogro

The avocado waste products from the extraction process are put into a digester for the manufacture of biogas. Olivado spent two years on the in-house research and development of using the avocado waste to make the biogas. They are the only avocado producer in the world that produces their own energy. The biogas provides methane to power gas generators, to power the plant and the cold stores. They intend to run the company vehicles to be used for fruit collection with the CNG gas. Besides biogas, the digestate is also used to make nutrient rich solid and liquid fertilizers

The seed (stone) of the avocado is used to make an organic fertilizer and soil conditioner known as avogrow .This is sold to our farmers.

Ochard Management and Organic Fair for Life

They have developed an orchard management programme targeting large farms; some having as much as 30,000 trees, ensuring homogeneous fruits for each consignment. The farms are monitored and well managed to produce fruits of the highest quality. This is to cushion them of the uncertainty risks because most of these farmers lack enough knowledge in avocado production. Olivado provides the technical advice to the management, a binding contract is signed with the farmer which guarantees an off take arrangement.

Apart from Murang’a County, Olivado has spread its wings to 9 other counties in Kenya, that is; Kiambu, Nyeri, Kirinyaga, Embu, Laikipia, Nakuru, Trans-Nzoia, Meru and Bomet with a conglomeration of more than 3,000 small scale farmers. Olivado is now starting in Western Kenya, Bungoma, Kakamega and Kisii.

“We prefer working majorly with small scale farmers because they are able to implement our organic farming policies unlike large scale farmers who grow many trees which they need to apply chemicals in their farming operation. Organic is the way to go in terms of health, sustainability and there is a good niche market for organic products,” he said.

The company trains farmers on soil management, water conservation, and the use of IPM instead of synthetic chemicals. Olivado encourages smart climate agriculture and biodiversity. They prefer their farmers to compost their own manure. They advocates organic control of pests and diseases using local available means. For convectional farmers, the company recommends informed and controlled use of chemicals , that are within GlobalGap approved practices .

For farmers to fit in Olivado, first they are contracted by the company and are GlobalGap standard certified, a prerequisite for access to European market. Other certifications obtained are organic standards, SMETA and Fair for Life which are social standard. For the packhouse they have BRC standard, a key into European markets .

“We have invested heavily in standards because our market is in Europe, Asia and the Pacific. We educate our farmers on the standards right from the start to the planting and production phase. We train on how to implement all this standards and becomes their culture,” Mwangi explained.

The company buys directly from the farmers with signed contracts as per standard requirements. Olivado has farmer liaison officers who pay regular visits to their farmers. The field liaison officers use real time technology to check the quality and maturity of the fruit. The field officers oversees the harvesting with their trained pickers ensuring quality and traceability. The company has invested and conducted a 5-year programme together with New Zealand Plant and Food Research to develop a predictive dry matter model for determining the maturity of the avocados and establishing when to harvest or harvesting dates.

They buy avocados at farm gate price; and what is harvested is what the company pays the farmer. No further grading is done that can downgrade the price.

To ensure good management of all our farmers, the company has invested in a data based software which has captured the entire farmers’ history, land size , tree numbers, farm activities, harvesting and projections. “Beside these, the system has been integrated with the payment system, that once we have picked the produce from the farmer we are able to key into the system and disburse their money. We have integrated system with payment providers who complete the process ,” Mwangi stated.

Avocado season runs from March through July. During the off season, the company offers their farmers’ advance payments to cushion them from economic hardships.This is pegged on what a farmer will be able to harvest during the coming season.

High Health Seedlings

There are various protocols that are used in establishing a high health nursery. “Duping is very high in Kenya nowdays, for instance a farmer can purchase a diseased seedling from the roadside. Secondly it can be an off type or wrong type of seedling and in the end after planting produce different fruit than expected. These are some of the terrible losses that many farmers are facing, seedlings must be bought from high health certified nurseries,” Mwangi advised.

Their nursery soil is heat treated. Red and green zones in their nursery are strictly observed to ensure no cross infections. Source of the rootstocks and the scions are closely evaluated to ensure quality is maintained. Seedling is tested for phytophthora disease before they are dispatched to the farmers. Their nursery has a capacity of 60,000 seedlings per year.

Challenges facing the avocado industry in Kenya

There are two main challenges that are really draining the efforts of farmers and industry at large. These are harvesting of immature fruits and avocados theft at farmer’s orchards.

Many immature fruits are being harvested and exported. A mature avocado when harvested should have a Dry Matter (DM) contents of 22%. Mature fruits ripen very well while immature ones tend to rot in the process of ripening.

When these immature fruits are bought at destination, since they are branded as produce from Kenya, this really dents the image of the country. This is leading to loss of the export market and income opportunities for the country. When a buyer discovers the fruits are rotting, they refuse to pay or pay less and they don’t order any more from Kenya. This way the country has lost over KSh4 billion of potential sale.

There is a lot of stealing of the produce from the farmers orchards. Currently, the theft of avocados account to nearly 30-45% of avocados. “The national and county government agency should enforce laws to curb this menace. There is the Crops Act of 2013 and Horticultural Crops Regulations of 2020, which the government just needs to enforce as well as enact more laws to control and license packhouses, buyers and exporters that are strangling avocado industry,” Mwangi concluded.

HCD has the mandate to enforce the rules in the act and create an enabling environment for the development, prosperity of the value chain.

Olivado Farmers success stories

In Muruka location, Murang’a county which is the epicenter of avocado farming in Kenya we find Elias Kimani full of praise for Olivado who have turned around their fortunes from usual maize and beans cultivation.

Before venturing into avocado, he was employed by a horticultural company and planted his first avocado trees in 1969 though they were the fuerte variety before grafting some, as well as planting hass variety. Currently he has over 200 avocado trees, which in a good season he is able to harvest between 18 to 25 tones. He opines that the company buys from him directly per Kilo and not per piece.

“I have been able to build a decent house with the proceeds from my fruits; I have been able to buy another piece of land around this area and I am increasing my hass avocado trees. Olivado often give us advance payments which have come out handy in ensuring we don’t lack cash in the pocket when the fruits are not in season,” Elias said.

The challenge that has disheartened him is theft of the fruits. Thieves usually move in during the wee hours of the morning and lunch hours, picking every type of fruit whether mature or immature. They sell to a broker who has opened a collection shop at the shopping centre. To curb the menace, Kimani is appealing to the local authorities to organize meetings (barazas) to discourage young people from engaging in this vice and where possible to help in apprehending the culprits and bringing them to book. “We always get advance payments, if this vices continue being rampant the way it is unfolding then how are we expected to repay the exporter? ” Kimani lamented.

On her part, Muthoni Kagwanja another farmer in Ng’araria, Iriguini Village, Kandara Constituency, delved into avocado farming in 1980’s. She had planted the fuerte variety but in 2016 she grafted some of the trees to Hass and the proceeds from the fruits have made her glued to the farm. For instance, during the last year’s season she was able to make over Ksh 100,000 from the sale.

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