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The kiwifruit industry has had a fantastic 12 months. Do you feel 2017 is going to follow suit?
One certainty about the kiwifruit industry is that no two seasons are the same. We have had a record crop volume in the 2016 season but the 2017 season will likely see reduced Green volumes. Meanwhile, supply volume and sales of our SunGold variety will continue to grow, driven by robust demand and a very positive consumer response in the markets. We go into 2017 with a sense of confidence, focused on delivering value to growers.
What do you think have been the key reasons behind this recent success?
The performance of 2016/2017 is the result of a long-term strategy to deliver the best portfolio of kiwifruit for 12 months of the year. There are several elements. I would highlight our significant investment in breeding, which has delivered the SunGold cultivar. Secondly is our focus on taste and quality, which differentiates our products from competitor varieties. Another element is our investment in brand and marketing. Zespri is now among the top five best recognised brands in many of our biggest markets.
What are the current key markets for Zespri and what emerging markets are you focusing on?
Zespri currently sells kiwifruit in over 50 markets, the largest being Japan, China and Europe. China, already our second biggest volume market, is a significant opportunity for growth as we expand sales into second tier cities. We are also excited about growth potential in markets such as India, North America and South East Asia.
Do you see further expansion of kiwifruit growing areas in New Zealand?
Yes. There are currently around 12,000 hectares in production in New Zealand and growing areas are likely to expand steadily over the next 5 years. This will be driven particularly by developments of SunGold orchards. For example, Zespri allocated 400 hectares of new SunGold licence in 2016 with half of that volume being taken up for Greenfield plantings and half for cutover from Green. The regional spread was concentrated in the Bay of Plenty but there were allocations also in Gisborne, Waikato, Auckland, Coromandel, Hawke’s Bay and Northland.
We understand that Zespri is working with growers overseas to enable a 12 month supply into key Northern Hemisphere markets. Is this strategy proving successful?
Yes it is. Our Zespri Global Supply business continues to be a source of competitive advantage, allowing Zespri to supply retail customers for 12 months of the year. Zespri currently sources kiwifruit in Italy, France, South Korea and Japan and total supply during 2016/2017 is nearly 19 million trays. Supply is poised for strong growth over the next 5 years. This will be driven mainly by SunGold expansion in Italy and incremental increases in procurement of Green to meet demand.
What strategies will Zespri employ to maintain market share and grower returns as kiwifruit production in other countries ramps up?
Zespri is committed to preserving its position as the category leader through delivering a high quality product and a premium, branded strategy. As well as providing the markets with best-inclass products, we are also ensuring our distribution design and sales and marketing models are optimised to unlock value, building penetration and frequency of consumption by developing brand resonance in established markets and leveraging our resource to drive growth in our 27 strategic markets.
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