Background
Duxton Dried Fruits is Australia’s largest dried fruits grower by hectares under vine with plantings across the Sunraysia region of Victoria and New South Wales. The business currently operates 540ha of dried grape vineyards, with an additional 200ha three stage greenfield development planned to commence in 2022. By 2029 the company aims to produce 37% of Australia’s dried fruit. The company has secured long-term offtake agreements with the two leading Australian packaging, storage and distribution businesses. The offtake agreements entitle the company to receive the higher of a floor price and a spot price with one contract incorporating a bonus payment incentive.
Fundamental Drivers of Value
Net Importer: The dried fruits industry has a supply and demand imbalance given annual production of 10,000 – 15,000 tonnes only makes up 35-50% of domestic consumption, leaving up to 20,000 tonnes of the product to be imported each year.8
Rising domestic demand is driven by a consumer focus on the health benefits associated with dried fruits and nuts. This increasing consumption trend has solidified Australia as the third largest consumer of dried fruits on a per capita basis.
Fragmented Industry & Constrained supply: The Australian dried fruits industry is fragmented in nature with very few large-scale or commercial producers. The industry has seen mass conversion of large-scale dried fruit vineyards to other horticultural commodities, which has increased the reliance and pressure on smaller family farming enterprises. Small growers are less resilient to weather risk which has led to an exodus of local growers during the recent drought, reducing the number of individual growers since 2015 by an estimated 5–10% annually.9
8 Horticulture Innovation Australia, 2020, 2019/20 Australian Horticulture Statistics Handbook
9 Dried Fruits Australia, 2021
