“We continue to see significant growth in China, with increases in volume of 20 to 30% year on year for several years now, there a good rise in the volumes of SunGold being sent there as well. But Japan, the cornerstone for New Zealand for many years, is showing growth as well which we expect to continue for the coming years,” explains Mr Simon Limmer, COO of Zespri.
Besides Japan and China, which are similar in terms of volume, Limmer says that prospects are positive overall in SE Asia, “There are exciting opportunities in a handful of different markets such as South Korea, where we have recorded an amazing season this year. We are starting to see the benefit of the free trade agreement now that the playing field has been levelled with other countries such as Chile, who have had zero tariffs for a few years. Taiwan has also shown great growth."
Zespri are making further in roads into China with new relationships with Chinese importers, this week they announced a collaboration with Fruitday who will now become a direct retail customer, giving them the position of being the Zespri's largest direct retail customer in China.
Zespri is still a while away from actually growing any kiwifruit in China.
"We are still involved in the preparation process," acknowledges Limmer. "We are working with partners in China trying to raise the standard of domestic kiwifruit. This is also allowing us to build relationships from a scientific perspective in trying to understand the growing environment and finding the most suitable varieties. In short, not only do we need to be convinced that the quality is sufficient for the brand, but we also need to make sure that Chinese consumers who are already buying the imported product will be open to a ‘Made in China’ fruit.”
Zespri has long been aware of the growing volumes and quality of domestic kiwifruit; “The branding is also becoming more sophisticated and for us this is both an opportunity and a threat," explains Limmer. "We have the benefit of the counter seasonality of fruit out of New Zealand and we are no stranger to competition throughout the year where ever we are in the world."
Although red kiwis have been in trials for a few years, Zespri has not produced commercial volumes as yet. "We need to make sure we have all the attributes and characteristics right before we launch a new kiwi on the market - agronomically, yield, size, storage and cost of production for example. Reds are particularly susceptible to Psa and also have storage issues, but we clearly acknowledge and understand the opportunity for a red in the market."
Another challenge in the Chinese market has been protection of the intellectual property, as the image and reputation of the brand is strongly linked to the product’s quality. “There have been some developments in this regard in China and certainly willingness and motivation to shift, but it’s taking time,” admits Limmer. “Most importantly, the consumer needs to be educated on what’s genuine, giving them comfort with the knowledge that what they are buying has all the guarantees regarding quality or safety, something in which social media can play a decisive role."
For more information:
Rachel Lynch
Zespri International Limited
Tel: +64 7 572 7757
Email: rachel.lynch@zespri.com