NZ: Zespri still can't keep up with SunGold demand

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NZ: Zespri still can't keep up with SunGold demand

New Zealand kiwifruit marketer Zespri's recent decision to effectively double its European land dedicated to SunGold kiwifruit production underscores a broader demand trend, picking up where the disease-ravaged Hort16A crop left off. 

Speaking with Fresh Fruit Portal during Fruit Logistica in Berlin last week, Zespri COO Simon Limmer said the announcement to license 1,800 hectares of SunGold in the old continent over the next three years was significant for both European and Asian markets.

Simon Limmer

"It’s been quite a quiet year, the Italian volumes are down," he said of the season that's currently underway.

"We are of course growing gold kiwifruit in Italy and we’re sourcing green kiwifruit out of Italy and France, so a smaller crop has taken a bit of pressure off. 

"It’s been quite a good season, we’re seeing strong demand – we’re actually taking it from European supply bases and selling it into the European market and also exporting through into China, Taiwan and Southeast Asia."

The new license deal implies a significant investment through Zespri's partnership with the four Italian suppliers that originally were contracted to grow Hort16A in 2000 - Apofruit, Alegra-Intesa, Salvi Unacoa and Spreafico.

"It takes a few years for the vines to come into full production, about three years, but in New Zealand we continue to release more," Limmer added.

"Wherever we’re looking around the world the demand for gold is growing so phenomenally quickly that we’re having to run quite hard now to fulfill it from the supply side."

In a release, he said based on current pricing, the SunGold fruit from the first 1,200 hectares alone will generate over €100 million a year in revenue for the Italian economy once the vines are fully producing.

Limmer expected the Chinese market to be the biggest buyer of Zespri kiwifruit in 2017, and also highlighted other strategic regions.

"The opportunity for us is we’re selling into 56 markets around the world, and so that’s a good position to be in in terms of having a diversified portfolio. We do take a long-term strategy into those markets," he told Fresh Fruit Portal.

"The Middle East is a good growth area for us, and we’ve got a really strong focus again on America and trying to build our strong position with SunGold kiwifruit in North America.

"Certainly, the Latin American market is massive and has a very strong culture of fruit consumption and also a very strong culture of fruit consumption, and also a really strong retail environment. 

"Those are obviously conditions which interest us, so those are areas that interest us and those are markets we are investing in and looking to build positions that we can see being quite interesting in the future."

In terms of the New Zealand kiwifruit season ahead, Australia-oriented exporter NutriKiwi has indicated green volumes will be down 25-30%. But this must be taken in the context of recent years.

"The early indications out of New Zealand is we’re coming off two years of really phenomenal productivity growth, particularly when it comes green kiwifruit," Limmer said.

"It looks as if we’re coming back to what we would describe as a more normal year. It seems as though all in all we’ll be having our second-largest season ever, but last season was exceptionally big."

Limmer said the group invested NZ$160 million (€100 million) in targeted marketing at trade and consumer levels last year.

"As the volume comes on, particularly when it comes to positioning SunGold, we’ll be making sure the brand is front of mind and we’re backing it up with point of sales support," he said.

"There’s no substitute for actually just being in front of consumers when they’re purchasing product at retail, making sure they’re understanding what it is they’re buying and how to consume it."

And will promotional spend be similar in 2017?

"Yes, it is relative to the volume coming through. The likelihood is that as we have more got more gold coming in, we do invest a little bit more heavily in the gold brand because we’re establishing SunGold in the different markets. 

"Green is something the consumers know a lot more and have known."

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