A frank insight of the challenges underlain by increased environmental extremes, greater management complexity and increased competitiveness from other countries, was given to growers by Zespri’s global marketing and management team at its Momentum conference.
Among the biggest disruptors was the huge growth in competing volumes of fruit from countries including China posing real threats to Zespri’s market share.
Its global supply chain manager Sheila McCann-Morrison used China’s apple industry as a template for how things might play out in the kiwifruit sector.
As the largest apple grower in the world, China had almost tripled its 1995 production of 1.5 million tonnes in 20 years.
Today China grew 1.3m tonnes of kiwifruit compared to New Zealand’s 488,000 tonnes, close to Italy’s 532,000t.
“NZ has doubled its volumes in 20 years but China has grown its kiwifruit volumes by eight times in 20 years.
“But kiwifruit still remain a small proportion of total fruit sold globally, accounting for 2kg for every 1000kg of fruit grown.”
“Only 4% of China’s apples are exported but that still makes it a major exporter today and we expect to see the quality improve with time also.”
She noted more growth was likely given Chinese apples now had access to the United States market.
Meantime, Chile and the US had each experienced a 26% decline in apple exports to China and NZ a 12% decline.
McCann-Morrison said Zespri believed China was on the verge of disrupting the industry in a way it did with its huge surge in apple production.
Zespri’s own estimates had Chinese kiwifruit production growing to 3m tonnes by 2027 while NZ’s was estimated to be about 1.1m tonnes.
“If kiwifruit go the same way, we may not see such a decline, given it’s not a 12-month market.
“However, there are also other companies looking to emulate Zespri in China.
“This is also backed by China having the people, the land, the plant-breeding ability and a central government desire to improve the income of the rural peasant population.”
Other than Psa, the industry had enjoyed a period of relative calm over the past 20 years, making it ripe for disruption.
“So for Zespri, for the non-NZ growing season, growing locally in China will be very important. For Zespri to maintain its position we will have to be a leader in the local growing world.”
Zespri already had several initiatives under way to expand its grower presence in China. Last year it signed a collaborative research agreement with the Shaanxi provincial government on knowledge exchange.
It also invested $40m into developing the Chinese market in 2016. That included establishing staff in two cities far west of the eastern seaboard, in Xi’an and Chongqing.
The cities had a combined population of 14m and took staff numbers on the ground in China to more than 50.
Meantime, other countries, not traditional kiwifruit producers, were ramping up production.
Greece was expected to double production to 350,000t and Iran to increase 2.5 times to 200,000t.
