China has been a “standout” market for Zespri kiwifruit this season but the Chinese economic slowdown will challenge an expected 40 per cent lift in New Zealand fruit headed there next year, says the global marketer.
Around 37.5 million trays of Zespri fruit were sold in the greater China region - China, Taiwan and Hong Kong - despite the downturn and it being the first year China had opened its doors after three years of Covid lockdowns, said Zespri Greater China president Michael Jiang.
“GDP growth, the unemployment rate, household disposable income and willingness to spend money is better than during the Covid-19 pandemic, but it is still lower than expected and this will remain a challenge as we head into 2024,” Jiang said in Zespri’s latest newsletter.
“We are now looking ahead to 2024 with a much larger New Zealand crop expected to deliver a 40 per increase in fruit for Greater China next season.”
This level of growth was “a big task”, he said.
The sale of 37.5 million trays in this 2023-2024 season compares to 39.7 million in 2022-2023 and 43.3 million in 2021-2022.
Jiang said Zespri kiwifruit was now in more than 60,000 stores in the greater region.
Competition had been another challenge with other fruit, including blueberries, durian and cherries growing in popularity in China in the past three years.
“Despite these two major macro-economic challenges and the lower New Zealand crop volume (this year), Zespri has had a really good season in China and feedback from our customers has been positive,” Jiang said.
Sustainable packaging had been further rolled out in the region with three million trays using new packaging, compared with a pilot trial of 300,000 trays last year.
Selling 40 per cent more kiwifruit in greater China next year isn’t the only challenge the exporter is tackling in one of its two most important markets - 20 per cent of New Zealand fruit is sold there. Japan is the other big market.
Zespri has filed a civil case in the Intellectual Property Court in Nanjing, China, against two parties it says are involved in the unauthorised production, sale and marketing of New Zealand-bred Gold3 fruit.
Gold3 fruit is marketed as Zespri SunGold and is New Zealand’s best global seller.
Zespri estimates there are around 7850 hectares of rogue Gold3 growing in China.
The company said it had also sold higher volumes than expected of organic SunGold in China this season.
This was despite an unexpected challenge in accessing China when an anticipated “mutual recognition agreement” between the Ministry for Primary Industries and Chinese organic authorities did not start as planned.
Zespri’s market access team had developed an alternative approach into this high-value market at short notice and would continue with the approach until MPI finalised an alternative, the company said.
The organic category was lesser known in China but consumers interested in health benefits were prepared to spend a high premium on organic produce.
Latest available Zespri figures for this season show 136.7 million trays of New Zealand fruit had been delivered to export markets, with 250,000 trays yet to be delivered to close out the season.
Of this, there were 21,000 trays of class one SunGold fruit left to deliver in mainland China.
Zespri, which is supplied by 2800 New Zealand growers, also has contracted growers in the Northern Hemisphere which fill gaps on overseas market shelves when the New Zealand season has finished.
The company said sales of offshore-grown Zespri fruit were progressing well this season with 6.8 million trays of class one SunGold delivered so far after the first six weeks of sales in Europe.
Zespri’s is the world’s single biggest kiwifruit exporter. The company is owned by past and present New Zealand growers and has the statutory entitlement to export all New Zealand kiwifruit, except to Australia.
Andrea Fox joined the Herald as a senior business journalist in 2018 and specialises in writing about the dairy industry, agribusiness, exporting and the logistics sector and supply chains.