Zespri says it had already committed to expanding its presence in the United States before the recent decision by President Donald Trump to withdraw tariffs on several imported foods, including kiwifruit. Chief executive Jason Te Brake said as much as 90 per cent of the marketer's U.S. sales this season had been affected by the tariffs, which began at 10 per cent in April and rose to 15 per cent in August.
As the importer of record, Zespri has paid US$40 million in tariffs to the U.S. government. Te Brake said, "We have been able to recover some of that through price increases through the course of the year, but not all of it. Some of it has been worn by our growers back in NZ."
The tariff withdrawal came as Zespri continued its investment in the U.S. market, where it has secured retail distribution at Costco, Walmart, and Whole Foods. Zespri is expected to generate US$400 million in revenue in the U.S. this year. Te Brake noted that the company has been growing "at roughly 30% year on year" but added that growth required increased consumer awareness and brand-building.
Te Brake said kiwifruit is a high-priced item in the U.S. market. "We felt we could pass on a portion of [the tariff] but not the full amount without slowing down consumption," he said. Rising inflation in the U.S. has also raised concerns about next season's demand. "We were a wee bit nervous going into next year about how much that was going to slow down how much fruit was going to be purchased, so having this tariff relief is quite positive for that."
Te Brake said Zespri did not consider reducing its commitment to the U.S. despite the tariffs. "We wouldn't have wanted to step back from that and were taking a more long-term view that at some point these tariffs would potentially come off, so we would have continued to invest and grow the market even though commercially it wasn't the most attractive option."
The company will continue evaluating how tariff changes influence consumer pricing, demand trends, and the pace of its long-term expansion strategy in the U.S. market.
Source: FarmersWeekly
