By Nathan Flowerday, chair of the Zespri board.
Zespri’s strategy is to build demand ahead of supply and capture the value for New Zealand kiwifruit growers. With an outstanding product and continued investment in innovation, our supply chain and a strong brand, we’re able to grow value year on year.
We’ve invested in listening to our consumers. We’re led by our markets and we tell our story well, ensuring our consumers see that Zespri Kiwifruit is “worth more than it costs”, by validating and promoting the health benefits and quality of our kiwifruit with consumers all around the world, particularly in our key markets of China, the European Union and Japan, which continue to perform.
This approach has been a cornerstone of Zespri’s success; it’s how we were able to sell around 20% less kiwifruit in 2023/24 but increase revenue from $3.92 billion to $3.99bn. And it is how we will continue delivering value in the years ahead.
A good case study comes from our SunGold-led relaunch in the United States in 2015, when we used a full portfolio of quality product under a strong brand to lift value across all varieties and benefit all growers.
Although the launch was led by SunGold, the US is now among the top returning markets for Green, with grower returns increasing 138% between 2015 and 2023 (the average increase in other markets was 81%).
The demand that we’ve created gives us more opportunity to grow, but our competition has spotted the supply gap and is investing to fill it.
New consortiums, brands, and varieties are entering the market and taking some of our market share. That’s business – what matters is how you respond – and for Zespri being able to supply the world’s leading portfolio of branded kiwifruit to key customers in key markets for 12 months of the year is critical.
It helps us to build the brand, maintain our partnerships, and hold onto our shelf space in the face of this intensifying competition. The outlook for kiwifruit is positive with demand forecast to continue increasing ahead of supply and our markets telling us they want more of our fruit. We need to be able to fulfill that demand with our own supply.
It sounds simple, but kiwifruit is seasonal, so we need to have vines in both hemispheres to provide year-round supply and hold our space.
This is why for almost 25 years, Zespri has been growing kiwifruit in the northern hemisphere via Zespri Global Supply, or ZGS. We work with growers in Italy, France, Greece, Japan, and South Korea to produce Zespri SunGold and to procure Zespri Green kiwifruit to supply our key retailers when New Zealand fruit is out of season.
They are subject to strict quality controls, like our New Zealand growers, so we can be confident that their fruit lives up to the brand values we have all worked so hard to create.
This northern hemisphere supply will help us to compete strongly and maintain our position as leaders in an increasingly competitive category, if we can grow more fruit.
However, our ability to supply more is limited by the cap of 5000 Zespri SunGold hectares able to be planted in those locations. We cannot extend this cap without what’s called a Producer Vote, where all New Zealand kiwifruit producers vote whether to approve (or not) proposals put forward by Zespri.
This is why we’ve been working with growers as we consider increasing these hectares to the level needed to keep executing our strategy and delivering value year on year to New Zealand growers.
The industry is very engaged in the discussion, with questions not only about the opportunity but also the risks of expansion and how we can manage and mitigate those. It’s a fair challenge; these are the livelihoods of New Zealand kiwifruit growers and the future of their businesses.
We’ll continue managing these risks the way we have for the past 25 years; my belief is that the biggest risk now is not acting to protect and grow our value. Using our tried and tested strategy that has made us the global leader in a high-potential category, more hectares will enable us to keep building for the future.
