Rockit chief executive Grant McBeath.
Rockit Global chief executive Grant McBeath says the miniature apple marketer is on a three-year programme to improve profitability after supply got ahead of demand and put grower returns under pressure.
Last week, MyFarm Investments’ partnership Rākete Orchards – which grows the variety – went into voluntary administration.
Rākete Orchards chair Tony Hawken at the time blamed low orchard returns for the move.
“When selling a specialised product at a high price point, a business needs to invest in the market to drive demand ahead of supply,” Hawken said.
New Zealand Apples and Pears chief executive Karen Morrish said Rockit’s issues appeared to be confined to itself.
“New Zealand Apples and Pears recognises the ongoing challenges for Rockit Global, but we do not believe this is part of a larger trend,” Morrish said.
“The pipfruit model remains profitable, with some operators even reforecasting for higher returns this year as a result of a quality harvest and export season, as well as continued investment into IP [intellectual property] varieties,” she said in a statement to the Herald.
The 2025 season had started well for many early varieties, however, as always with the industry, different varieties faced different challenges, Morrish said.
“In New Zealand, apple varieties are harvested at various times across a full three-month period, so we can see a fluctuation of performance across varieties each year as a result,” she said.
Rockit Global, which is owned by private equity companies Pioneer Capital and Oriens Capital, along with Punchbowl Investments, has been through a string of CEOs over recent years, with McBeath taking up the reins 12 months ago.
About 1000ha is planted in Rockit – 90% of it in Tairāwhiti and Hawke’s Bay – and the variety forms about 10% of the national crop.
Post-Cyclone Gabrielle, which hit both regions’ apple growers hard, Rockit has branched out to Canterbury to set up joint ventures in order to shore up its supply chain, McBeath said.
Rockit Global sells growers licences to grow the miniature apples and markets the fruit – mostly for export – at harvest time in February.
In a typical orchard, the Rockit variety would be grown among other varieties and other pipfruit.
Some orchards are dedicated apple growers that will move from one variety to the next based on the phase of that product’s lifecycle.
“But then we also have a situation where we have a few growing syndicates – MyFarm being one of them – which will do a big block, all within the Rockit variety,” McBeath told the Herald.
“And so then when you have those sort of swings or those changes, they’re a little bit more prone to the excess than others are.”
McBeath said Rockit is priced differently compared with the world’s traded “commodity” apples.
“We treat ourselves as a fast-moving consumer good [FMCG], available 12-months of the the year.”
The company, based in Havelock North, has the global and exclusive licence to grow and market Rockit apples.
The company markets its apples in distinctive, small transparent tubes.
“We don’t sell in price per kilo – we sell price per sales ‘occasion’,” McBeath said.
“We really talk about those ‘occasions’ and so we talk very differently compared to our competitors.”
The Rockit variety grows under licence in six or seven countries around the world.
Each of those markets is allowed to sell into their domestic market.
New Zealand provenance fruit is exported to Asia, the Middle East, India, and the United States.
“What we find is that consumers prefer the taste and profile of New Zealand fruit so we really project that and are able to command the premium off the back of that – so that’s where price comes in,” McBeath said.
“The real issue that we’ve got at the moment is we don’t have demand ahead of supply.
“With a premium product, you don’t want to discount your price to shift volume because you’re really impacting on the future premiumisation of your brand.
“The capital intensity of a Rockit orchard coupled with the cost of harvest – what we do with packaging and what we do with the brand – means we need a superior price or a premium price to deliver superior returns.
“We were doing it up until 2023 and then, really in 2023, we had Cyclone Gabrielle, which impacted that season and impacted the whole ecosystem.
“Off the back of 2023, it was really uncertain as [to] what would come off the trees in 2024 because the ground was so waterlogged.
“We had high incidence of pests and disease, which impacted our ability to get fruit into the market, primarily China and Taiwan, and we had a 137% increase in fruit year-on-year in 2024 over 2023 – 30% more than we expected.
“The fruit size was 8% lower and that really put the whole business under duress because, again ... we’re trying to protect that price.”
At that point, Rockit had to consider how it would manage the 2025 season.
“And so we draw a line in the sand and say that number is going to be 65,000 bins, which would have been 25% growth, year on year,” McBeath said.
“And unfortunately, the lingering effects of Gabrielle impacted fruit quality, so we didn’t want to put that into consumers’ hands, which meant we actually had to sell 80% this year over what we sold in 2024.”
“Eighty per cent growth is not controlled growth, especially in a macroeconomic market like we experience today.”
If the product can’t be branded as Rockit, then that comes off orchard gate returns.
While McBeath cited the aftermath of Cyclone Gabrielle for much of the company’s supply problems, he said the company needed to get better at planning for the unexpected.
“I don’t think we’ve been great at doing that over the last couple of seasons. We are redoing how we forecast and so that we take more contingency into our OGR [orchard gate return] forecast.”
Rockit started the season with a $1.30 to $1.55 per tube forecast range. That has since fallen to 60c a dollar per tube.
Next season, the company has a $1.25-$1.30 forecast and $1.50 for 2027.
“If you look at the commercial model, growers take the bulk of the upside on price, and so that means if price goes up and performs really well, the growers get the bulk of that benefit,” McBeath said.
“Equally, if the product is not sold at a premium price, then they also incur the price of that impact.”
Rockit Global was established in 2017 and went on to build a significant pack house in Hastings.
The business was “performing exceptionally” all the way up to 2023, McBeath said.
Many growers expanded into Rockit over 2019, 2020 and 2021.
“Apples take about five years before they get to maturity, so anything grown in 2019/20/21 is really hitting that phase now,” McBeath said.
“And so, in hindsight, we were aggressive with regards to that.
“That growing has all come on largely as we’ve gone through these crises of Covid, the weather events of 2022, Cyclone Gabrielle in 2023, pests and disease and then low-quality fruit, so those have been all causal factors.
“Either way, we haven’t got demand ahead of supply.
“That’s on Rockit. We’ve got to measure up and we’ve got to deliver that demand ahead of supply plan.”