Following positive results from an ongoing trial into producing fruit in the country, Zespri believes growing a commercial kiwifruit crop in China is a step closer. Now in its third year, Zespri's corporate affairs manager who is based in China believes it will open the door for increased production volume as well as a wider supply window.
"At this stage, it's all imported," Ivan Kinsella told Fresh Plaza.
"During the New Zealand off-season, we also have Zespri fruit coming in from Italy, which has been steady at around 1.5million trays a year. What we have been doing over the past three years, is a trial to see whether we can source premium quality kiwifruit in China that meets Zespri’s requirements. We know it grows here of course – China is the home of kiwifruit - but what we are doing is seeing if we can work with local partners to get local varieties up to Zespri standard which we can sell under our brand when there is no NZ fruit in the market. We are in the third year of the trials and it's so far so good, there have been no insurmountable barriers to procuring Zespri quality kiwifruit."
At this stage, the company is carrying out final checks surrounding how Chinese-grown Zespri would be received by consumers. Should that gain positive feedback, Zespri would look to make the decision on appropriate partnerships going forward.
Last month saw the NZ season launch of Zespri which, according to Kinsella, has been very well received with strong demand for its product.
"China is now one of our top two markets - it's neck and neck with Japan – with China just ahead for global sales including Zespri’s northern hemisphere sourced fruit,” he said. "In the China market we are looking at around 25 million trays (3.5 kilo per tray), which will be up about 20 percent this season, which in New Zealand dollar terms was $500 million. That's against our global sales of around $2.4 billion in sales in 2017/18 - and nearly doubling that to $4.5 billion by 2025."
Over the last five years, the company's sales of NZ-grown kiwifruit to China has more than doubled, from under 10 million trays to an estimated 25 million this year.
"What we are finding is New Zealand is counter-seasonal and being in the southern hemisphere means that we are able to get Zespri kiwifruit into the market at a time where there isn't a lot of local kiwifruit there. But more important is the quality of the fruit; you've got a large growing urban middle class in China, and people are looking for fresh tasty premium produce and we fit into that pretty well."
Locally grown green, gold and red kiwifruit varieties still account for over half of the world's commercial kiwifruit production, but other fruits are the main competition to Zespri.
"By the time our first fruit comes on the market in March, the only other southern hemisphere kiwifruit that's available is from Chile. Compared to New Zealand sales there’s not a lot of volume coming out of Chile at this time, particularly gold kiwifruit, and as we go through the season, the main competitor is local Chinese summer fruits which come online July-August time."