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Zespri delighted with New Zealand/EU free trade deal

"Despite far lower volumes, the new kiwi crop has better quality"

The first new New Zealand Zespri kiwis began arriving at the Belgian Port of Zeebrugge at the start of this month. Zespri had a tough 2022 with many quality issues, but they are optimistic about the future, which includes a free trade agreement between New Zealand and the EU.

"The 2022 season was very challenging, and the 2023 season got off to a difficult start due to unfavorable weather conditions. The beginning of the new season thus means a reset for the kiwi sector," begins Ellen Van Looveren of Zespri.

In 2022, the company had trouble providing consistent quality kiwifruit. According to Ellen, that was due mainly to climate issues and largely to the pandemic. "During that time, the borders were closed, so we had fewer seasonal workers in New Zealand and a shortage of pickers. Now, the borders are open again."

"So, there are plenty of workers available again. Fruit quality is a priority for Zespri. We've, thus, developed information packages on best picking practices, increased our presence during packing, and adjusted audit programs, all to put fruit quality first," Ellen says.

"This season, the entire sector and our supply chain have made tremendous efforts to improve quality. Although it's still early in the season, it's promising to hear from our key markets that our first shipments have good quality. We've seen that in the Asian market and now in Europe as well."

Disappointing volumes
Volumes are down, though. "We should deliver a total harvest volume of about 136 million trays of Green, SunGold, and RubyRed kiwifruit to more than 50 countries. That's considerably less than the 171 million trays delivered in 2022. Following the April hailstorm in Te Puke, and now that orchard assessments have been completed, this season's harvest could potentially decline even further," Ellen explains.

The climate conditions primarily affected the green kiwi volumes. "Zespri Green volumes could be one of the lowest in the last 20 years, with a global volume of 42 million trays compared to 2022's 61 million trays. The lower volumes let us focus on boosting quality and preparing for higher volumes in 2024."

There are high expectations for the recently introduced RubyRed variety. "This is the second year RubyRed will be sold as a commercial variety. This sweet, berry-flavored kiwifruit will be picked for supermarkets in New Zealand and some Asian markets. It will eventually come to Europe, too. Not immediately, but it will undoubtedly happen," says Van Looveren.

Buying behavior back to normal
"Our first charter ship, 'The Wild Peony', arrived with Zespri SunGold kiwis in Zeebrugge on May 1, and we've successfully kicked off our New Zealand season." This season's charter program includes three services to northern Europe, seven to the Mediterranean, two to the west coast of North America, and 41 to Asia, with the remaining trays shipped via container services.

The sustained demand ensures Zespri remains confident in its product. "Consumers still want fresh, tasty products with high vitamin C content, like our kiwis. Demand was already on the rise, Pre-Covid, but as inflation rose and pandemic restrictions were lifted, buying behavior returned to more normal levels. Global demand for our fruit, however, keeps rising," Ellen continues.

New Zealand/EU trade deal
To meet this growing demand, Zespri is, thus, delighted with the New Zealand/EU Free Trade Agreement (FTA) signed last year. Once in place, it includes the scrapping of tariffs on New Zealand kiwi exports to the EU. "That's good news for our growers and will result in better prices. The trade deal supports growth and prosperity. It allows us to build strong international relationships and helps us meet Europe's growing kiwi demand. The FTA will let us expand exports to Europe, give more Europeans Zespri kiwifruit, and help achieve strong yields for our growers," Ellen adds.

Climate Plan
Looking ahead, the company and the kiwi sector have developed a climate plan. The Climate Change Adaptation Plan is a response to climate change's physical, market, and regulatory effects. "It sets a framework for the kiwi sector's long-term adaptation approach, builds on ongoing work, and outlines a detailed three-year program starting in 2023."

The first shipment of the 2023 season's kiwis being loaded in New Zealand. Photo: Jamie Troughton, Dscribe Media

"The plan's meant for our supply chain partners in New Zealand. We want to act for the future," Ellen states. "Our climate change adaptation plan is about finding opportunities, protecting our values, and being part of the solution."

Zespri expects its volumes to keep rising in the coming years while maintaining quality. "Our fruit supply should increase to 229 million trays by 2027, a volume growth of almost 40%. We're working hard to ensure we make the right investments and have the right incentives to build the brand and maintain the supply and demand balance," Ellen concludes.

For more information:
Ellen Van Looveren
Zespri International Europe

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