David is the business writer for the Bay of Plenty Times and Rotorua Daily Post.

Kiwifruit has multi-billion dollar future: Agri-boss Ian Proudfoot

Industry needs to capture a greater share of the export  value-add, says KPMG's Ian Proudfoot. Photo / Andrew Warner
Industry needs to capture a greater share of the export value-add, says KPMG's Ian Proudfoot. Photo / Andrew Warner

The New Zealand kiwifruit industry could grow in the next decade to become a $10 billion industry by increasing its share of added value, says Ian Proudfoot, global head of agribusiness for KPMG.

Kiwifruit exports totalled $1.9 billion in 2015-16, and Zespri spokeswoman Rachel Lynch said the current target was to more than double sales to $4.5b by 2025.

Mr Proudfoot, who was one of the key speakers at last week's Zespri Momentum conference in Tauranga, said New Zealand's total food-related exports were about $38b.

But he noted that by the time those food exports were translated through the value chain to end-users, that value had risen to about $250b.

"The challenge for us is how to we capture more of that value added," he said.

"That's all about being closer to our consumers. And if we get closer to our consumers, I can see the kiwifruit industry over the next 10 years becoming a $10b industry. But equally, I can see other parts of the farm industry growing significantly as well."

Mr Proudfoot said one of the greatest challenges was the speed of change in global markets. Key trends driving change included having sustainability as the platform to build from, and the role of digital to ensure the industry was connected right across the value chain.

Another key factor was knowing how consumers were going to use the products, he said.

"In the case of kiwifruit, the global population is going to be spending a lot more time travelling on trains, and a lot more time commuting, because we are living in much bigger cities."

That meant kiwifruit were often going to be eaten as a breakfast item by commuters.

"We need to think about how we present it to them even better; perhaps by growing a kiwifruit with an edible skin. That should be a high priority in your cultivar programme."

Zespri's Ms Lynch said there was an extensive cultivar breeding programme under way, which included new green and red varieties.

"Making skin more edible is one of the things being considered," she said. "It is part of a whole range of things being considered for convenience."

But if and when a decision was made by the board to commercialise a new variety, it would be some years before it came to market, she said.

Mr Proudfoot said how the industry built its relationships with consumers was critical for the long-term health of the industry.

"I think the kiwifruit industry has made a better start than most sectors of the NZ primary sector, but it could do better. Everybody [in the farming sector] could do better."

Kiwifruit exporters were competing against any and all forms of nutrition, he said.

There were now companies creating new forms of plant-based nutrition, people 3D printing food, people growing food from cultured cells.

"And in the horticultural sector, in particular, we're seeing a whole lot of innovation in indoor growing; they are using data, new forms of lighting systems. You can grow things anywhere these days. You don't need a greenhouse; you can use an office building."

Kiwifruit grower Neil Trebilco said he felt positive about the industry which had huge potential to grow its worldwide market share.

"But it really depends on a number of factors. While all the ingredients are there, I would say at the moment it's a possibility more than probability.

"There are few things we still need to do as an industry."

Mr Trebilco said for a long time that industry had relied predominantly on its Hayward (green) variety which remained a commodity product.

New varieties, including gold, "looked fantastic" but if the industry could also get a green replacement which tasted better, was a good size and a high-class producer and good red variety, it would make all the difference, he said.

The industry would also need to work hard to protect itself from biosecurity risks, Mr Trebilco said.

Nikki Johnson, chief executive of NZ Kiwifruit Growers Inc (KPI), said New Zealand had an enormous capacity to sell kiwifruit on the world market, particularly to new consumers.

"We can produce as much as we want, and become as big a producer as we want, our future potential is very bright," she said.

Kiwifruit

- Currently, makes up about 0.22 per cent of the global fruit basket.

- Bay of Plenty Times

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