China-sourced fruit back on Zespri’s map
Reading Time:3minutesSourcing kiwifruit from Chinese growers is again on Zespri’s radar as the marketer works to address ever-increasing volumes of Chinese sourced fruit, and the challenge of keeping optimal. . .
Reading Time:3minutesSourcing kiwifruit from Chinese growers is again on Zespri’s radar as the marketer works to address ever-increasing volumes of Chinese sourced fruit, and the challenge of keeping optimal quality New Zealand-sourced fruit on the shelves in the competitive market. Five years ago, Zespri held its first vote among growers seeking support to source Chinese grown G3 Gold kiwifruit, with the 70% support failing to meet the 75% threshold. But Zespri CEO Jason Te Brake said the threat of Chinese-grown G3 Gold kiwifruit has only grown, with an estimated 45 million trays a year now produced there. Zespri’s own estimates are that the area now in G3 Gold fruit is between 7100 and 8100 hectares, rivalling planting in NZ. “The biggest shift I have seen in the last two years is the growing sophistication of marketing and branding of the local Gold kiwifruit. Storage has improved and quality is much better, often meeting or even exceeding our own quality standards,” Te Brake said. Meantime Chinese fruit volumes are pushing further into sales periods NZ fruit would once have had to itself, particularly around October-November. “This is when we have six- to eight-month-old, aged NZ-sourced fruit competing against fresh locally sourced fruit. We need to be able to supply the freshest fruit possible. In the fruit business freshest always wins. ”In a recent grower communication, Te Brake highlighted feedback from dissatisfied Chinese customers where 22% of NZ fruit had been below standard in November. “Customers have been clear, [this level] is not acceptable, particularly when consumers have more choice and are comparing Zespri against other premium fruits and fresher, local G3,” he said. He said Zespri growers have one of two pathways to choose from to deal with the growing competition. “We can continue to work competing out of NZ, improving our late-season quality and offering longer-storing varieties. The alternative is to get closer to Chinese growers with a model more like our ZGS (Zespri Global Supply) sourcing. ”ZGS is the pool of fruit sourced from growers in countries including Italy and Greece. The Chinese option would require a vote from growers. Te Brake emphasised that at this stage Zespri is simply outlining options, but his own preference was apparent. “We need to get closer to growers in China. We can’t compete out of NZ to solve all our challenges. It is more about how to provide the best quality and have best supply to market. ”A Farmers Weeklyvisitto China late last year identified a high level of sophistication in the approach of Chinese growers, who often run vertically integrated supply systems. The pressure to deliver year-round high-quality fruit has also grown in recent years thanks to greater competition from other premium fruits including durians and blueberries. Te Brake also pointed out a growing willingness within China to opt for “China first” when choosing products. “If you went back a decade ago, foreign products gained a premium due to food safety concerns. But the government has done a lot to build trust and promote locals to buy local, so that’s also a competitive challenge. ”With the vast area of G3 Gold grown in China originating from Zespri’s own protected variety, Te Brake said getting closer to selected Chinese growers may also help protect the new Red variety from the same fate. “Our view is the Chinese government is taking a much stronger approach around plant variety rights (PVR) protection. “We would hope if we had similar issue with Red they would protect it better but also, if we are working with local growers, we are in a stronger position to also protect its PVR. ”The supply issue will be a topic at Zespri’s AGM in August and grower road shows to discuss the options will follow.