NZ blueberry industry concerned for global value falls

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NZ blueberry industry concerned for global value falls

New Zealand's blueberry industry might be small with fewer growers in recent years, but existing operations are consolidating to grow exports on a 'premium air freight' pitch. But with its volumes dwarfed in comparison to the forecast doubling of global blueberry production in the next five years, there is concern the fruit's international value will fall. At we speak with two industry players about the country's experience with the little blue wonders and what might be their destiny.

New Zealand's blueberry industry knows very well how profitability can be affected by increased volumes.

Blueberries New Zealand Inc chairperson Dan Peach tells how there used to be good opportunities for export across the Northern Hemisphere, but cheaper South American competition drove them out.

"It’s hard to compete with cheap labor. The U.S. used to buy our product but we can’t send much any longer as we’re not cheap enough," says Peach

"We shipped to Japan for some time but we weren’t cheap enough, we weren’t cheap enough for Europe so we primarily have kept it to the local market and Australia - I'd say we rely on the Australian market.

"Competitively we’re behind the eight ball compared to the U.S. and probably Chile in terms of having the latest varieties and licenses too, as there’s probably not enough distribution to afford it."

Humble origins

Peach says the first blueberries came to New Zealand in the 60s but the surge in plantation growth was in the 80s, with around 200 small growers spread across different parts of the country.

"They were mostly small enterprises, people with maybe a 10 acre farm that includes a house," he says.

"In those days there was a perception for some people that horticulture could be a lifestyle choice where you work your job during the week and attend the farm on the weekends, but it didn’t take long for them to realize that horticulture’s not so easy.

"A lot of people that came in that time are still here today, but they’ve changed their operations considerably - in the mid-90s U.S. exports weren't returning so well and from 200 it came down to about 60 growers, of which 20 to 25 do 95% of the fruit. They are smaller operations yet they produce substantial volumes."

One company that has been heavily involved in the consolidation process is Gourmet Group NZ, which exports around 1,000 metric tons (MT) of New Zealand's 1,700MT export crop. To put this figure in contrast, in 2011 Chile exported 73,740MT of blueberries, according to the the Office of Agriculture Studies and Policy (ODEPA).

Gourmet Group NZ has established more cost effective growing operations than the traditional models, says representative John Scott, but costs are still relatively high compared to other countries. The group has a sales, marketing and logistics company, as well as four production companies. One of these is Gourmet Blueberries.

"The dynamic of the international Blueberry market has changed over recent years with the huge volumes of blueberries being sent by seafreight from Chile. The prices in each market have reduced to the levels that New Zealand growers cannot compete," says company representative John Scott.

"The cost of production is quite high to grow blueberry in New Zealand and the price Chilean exporters have set are far below New Zealand growers' costs of production. New Zealand Blueberries mostly just sell to the very high end users in each market that can accept to pay a premium for fresh by air product.

"New Zealand does not have the ability to sucessfully seafreight berries so although we are closer to Asia this does not translate to a commercial advantage in terms of lower freight rates."

Scott says the company mainly grows with superior varietal breeding programs, focusing on consistent supply with expected growth in production. However, there are concerns that a bigger international supply of the berry could lead to profitability issues.

"We are quite worried about the decline in value of blueberries globally and the amount of fruit being seafreighted or stored for long periods of time.

"We believe the consumer may at some point be turned off the fresh blueberry if the freshness is lost."

Photo: Gourmet Group NZ

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