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Current Position:Home » News » Agri & Animal Products » Fruits & Vegetables » Topic

Zespri's plans to grow 'Kiwi' kiwifruit in China

Zoom in font  Zoom out font Published: 2016-07-27  Views: 7
Core Tip: All New Zealand kiwifruit outside of Australia and New Zealand is sold under one umbrella brand: Zespri.
 All New Zealand kiwifruit outside of Australia and New Zealand is sold under one umbrella brand: Zespri. Kiwifruit grown in New Zealand might not seem special to New Zealanders, but in certain markets overseas it fetches $3 or $4  a fruit – all thanks to constant marketing by Zespri and rigorous control of the product.
 
And yet, Zespri has dropped "New Zealand Kiwifruit" as their slogan. Why?
 
Increasingly, this company formed to sell New Zealand kiwifruit is looking to sell Zespri-branded fruit that is in fact grown overseas. They already do it in Italy and Japan, but those ventures could be dwarfed if they pull it off in their biggest market of all - China.
 
This could be a huge boon for the company, leading to a much more robust place in the world's second largest market. Or it could blow up in their face, and tarnish their brand with their most important base of consumers.
 
This wouldn't just hurt Zespri the corporate - much like Fonterra with dairy, Zespri basically are the kiwifruit industry in New Zealand. If they fall the growers that own the company fall with them.
 
Let's take a step back. Why would a Kiwi grower-owned company get involved with growing on the other side of the world? Seasons.
 
Zespri mainly sell kiwifruit from April to November in China, as that is all the southern hemisphere season allows. Every year when they re-enter the market they have to convince consumers to buy the fruit again and renegotiate retail placements.
 
The solution seems simple once you think about it: why not just grow the kiwifruit right inside its biggest market, China?
 
In China, that country of origin tag is very important - and the source of a lot of risk for Zespri.
 
"I think they need to be very very careful," says Mark Tanner, a Kiwi who runs the consumer research outfit China Skinny. "They will really need to make sure that their supply chain is airtight."
 
Copious research shows that the richer Chinese consumers who can actually afford Zespri kiwifruit far prefer imported food to anything produced locally.
 
"They prioritise differently - their official income might not be as high as someone in Wellington or Auckland, but they are way more likely to place a premium on safe and secure food," Tanner says.
 
Chinese consumers spend an average of 31 per cent of their disposable income on food. In the United States consumers spend around 10 per cent.
 
"For the top 20 per cent of affluent consumers, that consumption of food is growing the fastest. When you can afford it, that's when you go to buy safe imported food."
 
That top slice of buyers is gigantic now, but it's tipped to explode. In 2010, around 4 per cent of Chinese consumers earned more than NZ$36,220 a year.
 
By 2030, McKinsey expects that number to soar to 54 per cent.
 
By partnering with growers on the ground here, Zespri could stifle out any other "luxury" brand emerging and scale up production far faster than anyone in New Zealand could.
 
 
keywords: kiwifruit
 
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