Saturday, March 30, 2024

Zespri China sales still growing

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In China With this season’s kiwifruit poised for harvest Zespri’s China office has been gearing up for another year of strong growth, particularly for the SunGold variety.  
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The popularity of Zespri kiwifruit has contributed to kiwifruit now claiming a spot among the top five most popular fruit in China’s largest cities.

Zespri’s China corporate affairs manager Ivan Kinsella said expectations for this season are for the Chinese mainland market to take almost 30 million trays of fruit, with 20m of them Gold.

The total includes about 8% sourced from Zespri’s Italian growers, allowing Zespri to provide 12-month supply to maintain shelf space in top retailers during the New Zealand offseason.

The total amount means China will account for 15% of the company’s market sales and expectations are for the 20m Gold kiwifruit volume to grow rapidly as new Gold orchards come into production over the next few years.  

Kinsella, who is ending his first year in the role, said the marketing company is now starting to see the benefits accrued from major changes it implemented after the imprisonment of its former importer in 2011.

A key shift was Zespri becoming the importer of record in 2016, effectively guaranteeing Zespri complete control of the supply chain from Tauranga to distributors and key accounts in China.

In 2018 Zespri took a further move to take more control over the supply chain when it set up coolstores in three regional ports supplying key accounts. 

The moves resulted in Zespri’s China team expanding to 65 staff to manage the customs, quarantine and distribution issues along with customer relations, working directly with key customers

“But it has delivered a lot more for us on a number of levels. 

“We now enjoy much closer links with our distributors with joint business planning. We are also much closer to our key accounts and main customers, all of which creates greater value for our growers” Kinsella said. 

The move has also significantly shortened delivery times from a week to as a little as four-hours across the wharves.

The marketing company has identified four key accounts that include high turnover, large scale fruit retail and e-commerce operations. They receive priority attention and can pick fruit size and delivery dates. They also work with Zespri on joint year-round marketing and promotion plans.

“At present these four account for 20% of our business and it is quite likely we will see more join their ranks as other companies’ sales grow.”

In a market that can be suspicious about wholesale pricing, all four companies appreciate the transparency and price leveling their membership as key accounts brings.

As Chinese consumers move up the value chain in their purchases Kinsella appreciates the irony of selling a premium fruit back to its source nation.

“It is a fruit Chinese identify well with, they are familiar with it and the SunGold variety is proving to tick all the boxes. It’s very healthy, has a great taste profile and a colour that consumers love.”

The move by Chinese urban consumers to seek out food that is healthy is also playing well into Zespri’s campaigns around encouraging parents to let their children snack on a healthy piece of fruit.

Sales in Shanghai are proving particularly strong in higher end supermarkets like Ole’ and City Shop, a chain owned by Fruit Day, a Zespri key account, where an eight pack of SunGold will sell for 128yuan or NZ$3.50 a fruit.

While SunGold is popular for its sweetness and as a ready-to-eat snacking fruit, Green’s appeal tends to lie with urban fitness seekers who buy it for its high vitamin C, healthy perception and lower price. 

Kinsella acknowledged the continuing delay over the much-promised Red kiwifruit that has had positive consumer response taste trials in Singapore and New Zealand.

“The issue is not around the fruit’s taste but around its shelf life, which we are still working on to try to improve. We will be announcing a decision in October on when we will be launching Red”

The company has also recently started using brand campaigns adopting the Chinese characters that spell Zespri, which is pronounced Jiapei.

“This will help with the uptake among Chinese consumers who struggle to pronounce Zespri with three consonants all together. 

“We are using it more and more in our advertising – if consumers can pronounce it comfortably and experience the fruit, it’s all part of educating them about a quality brand and their loyalty in the future will increase.”

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