The kiwifruit – how can a fascinating furry brown thing become so popular and responsible for so much success? The kind of success that now means Zespri plans to take over the world… well the kiwifruit one anyway. However, like all good stories there is a twist – an evil arch enemy called Psa.
Zespri, located in the Bay of Plenty is the world’s largest marketer of kiwifruit, selling into more than 60 countries and managing 30 percent of the global volume. It has become an iconic industry with the kiwifruit now ingrained in our culture. In June 2010 Zespri shared an ambitious plan to treble export earnings to $3 billion by 2025.
Zespri’s general manager of grower and government relations, Simon Limmer talks to Kayte John about challenges facing the kiwifruit industry and solutions to secure its future.
An achievable ambition
This ambitious plan to treble export earnings is backed by Simon, who casually says it’s “very achievable.”
That’s not to say the company doesn’t face challenges. “Of course Psa has come along since we set that objective, the impact has been very well documented. We are still riding that tsunami in terms of where it’s going to take us – as 2012 plays out we will understand more,” he says.
“We are also an exporter, relaying on our revenue from offshore markets. We are currently exposed to a high New Zealand dollar, presenting a real challenge for exporters. Any sort of economic pressure in our key markets is a problem for us and that also reflects through the foreign exchange.”
Simon joined Zespri in April 2008 after 14 years of international general management and business development experience with Veolia Environnement. He graduated from the University of Waikato with a Bachelor of Management Studies (Commerce/Marketing) before joining the Ford Motor Company – with a stint of professional rugby in France.
“I became highly engaged in the French lifestyle but age caught up with me and I moved back to New Zealand for family purposes. I had two young children growing up in the fabulous city of Paris, which is fantastic for adults, but not for kids when there’s an alternative like New Zealand. Zespri became a great opportunity and being located in the Bay of Plenty also had its appeal.
“Zespri wants to treble its revenue in the next 15 years. This is fairly ambitious for that timeframe especially given we supply about 35 percent of the global kiwifruit sold in terms of volume – but we represent 70 percent of it in terms of value. However, we believe the kiwifruit category has a significant scope for development – it’s currently a very small proportion of total fruit consumed and we believe the attributes of kiwifruit make it a great prospect for on-going growth.”
Zespri believes it can meet this plan by introducing varieties to consumers all over the world.
Seeing red
In 1991 Zespri created the juicy and delicious kiwifruit gold – this has been phenomenally successful and has dramatically changed the kiwifruit industry during the last decade. New varieties are a key part to implementing Zespri’s plan.
“Zespri has begun pre-commercial grower block trials on two red coloured kiwifruit varieties and its extensive evaluation process means that Zespri will continue to develop new varieties. Consumer research has told us the red variety can be successful, especially in the Asian markets,” Simon explains.
The range of Zespri kiwifruit is wide and unique – from the classic, fresh tasting Zespri green and the exciting, tropical flavoured Zespri gold, to Zespri organic and jumbo kiwifruit.
“We continually strive to find ways to improve all our products and bring new and exciting varieties to the market. We have to keep in mind the taste, impact, visual (aesthetics), storage and if it excites the consumer when producing new varieties. Another important criterion is a kiwifruit’s tolerance to Psa – we have found some varieties are tolerant of this disease, which is something we are very happy about,” Simon adds.
The health factor
Zespri will also meet its plan to triple export earnings by introducing new consumers, using marketing strategies to promote the health benefits of kiwifruit.
Simon explains that Zespri has ambitious goals for future growth and profitability, underlined by a strong focus on marketing, health and nutrition research. “It is an area we have put research into over the past couple of years. The kiwifruit’s attributes need scientific backing and Zespri wants to understand this research. We know that kiwifruit has a high source of Vitamin C and broadly speaking I guess we know it provides great benefits for digestion and its support.
“Zespri’s overriding goal is to grow the kiwifruit category globally by selling the health benefits of kiwifruit to consumers, introducing new consumers to the kiwifruit category through kiwifruit products and the developing markets.”
In 2008, the most widely known health message about kiwifruit was that Zespri kiwifruit is an excellent source of Vitamin C. Zespri wanted to build upon this health message and during 2010/11 Zespri released three key studies into health benefits of kiwifruit. These are:
• The naturally occurring enzyme actinidin, found in Zespri’s green kiwifruit can help improve digestion
• Zespri’s gold kiwifruit can significantly enhance the uptake of iron
• The Vitamin C from Zespri kiwifruit is five times better absorbed by the body than dietary supplement.
Overcoming Psa
With these ambitious plans Zespri has not forgotten about Psa, the aggressive strain of the bacterial disease that was discovered in kiwifruit – growing in heartland Te Puke just over a year ago. Simon says the outbreak of the airborne disease last year represented a significant challenge for the industry, but one he is certain it could beat.
“Confirmation that Psa was found in New Zealand was a blow to our industry. Very little was understood about how and when the disease arrived. Last year was tough, with a stuttering economic recovery, rising oil prices, seasonal challenges, the impact of Psa on our orchards in Italy and in this country. We are beginning to learn more about Psa and how it can be prevented.
“We have safer techniques, new products and tools we can now use in the orchards – this is allowing us to tip the balance back in our favour. We can now move forward – time is going to be an important factor in all of this to see how the disease involves and what happens to vines over time.
“This year we are focused on Psa and the recovery pathway. I am confident the industry will overcome the disease and meet its long-term growth plan to triple export earnings from $1billion today, to $3billion by 2025. We have big decisions to make and challenges to ensure business is usual and that green and gold growers who aren’t as affected are getting good market returns as well.
“Zespri has a good crop this year; the sun is shining in the Bay of Plenty, we are expecting harvest in a couple of months and we will have some excellent fruit,” Simon enthuses.
“We are optimistic that we are in good shape for the season ahead. Psa was a hiccup not a fatal moment – we should take a balanced optimistic view of the world with forgetting the risk that we take and work our way forward.”
Timeline
1904 – Isabel Fraser, a headmistress, brings kiwifruit seeds back to New Zealand from her sister’s mission station in China’s Yangtze Valley. Isabel gives the seeds to orchardist Thomas Allison, who gives them to his brother Alexander. They are called “yang tao” in Chinese and “Chinese gooseberry” in English
1910 – New Zealand’s first kiwifruit vines are recorded as bearing fruit on Alexander Allison’s property
1920 – Chinese gooseberry plants are offered for sale by a number of nurserymen. Plantings are recorded in Auckland, Fielding, Wanganui and Tauranga
1924 – Auckland nurseryman Hayward Wright develops the green-fleshed kiwifruit variety that has become the most commonly grown around the world
1934 – Jim MacLoughlin plants his first seven acres of Chinese gooseberries on his property in the Bay of Plenty region
1952 – Jim MacLoughlin and Grahame Bayliss export the first commercial shipment, 13 tonnes of Chinese Gooseberries to England
1959 – The brown furry fruit is re-named kiwifruit. The first exports to the USA arrive in California
1991 – The gold variety is developed on HortResearcher’s orchard in Te Puke
1994 – Creation of the first 100 percent organic packhouse, for the rising demand and supply of organic kiwifruit
2008 – New Zealand production of Zespri kiwifruit exceeds 100 million trays
2010 – Zespri releases three new varieties of kiwifruit
2010/11 – Zespri announces plans to treble its revenue by 2025 from $1 billion to $3 billion
2011 – Confirmation that Psa had arrived in New Zealand. The bacterial disease was discovered in kiwifruit growing in heartland Te Puke
2011 – Zespri begins pre-commercial grower block trials on two red coloured kiwifruit varieties
2012 – Zespri announces that it is focused on Psa and the recovery pathway. Its plan to treble revenue is still ‘highly achievable’.
