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Home / Business

Zespri forecasts big jump in kiwifruit production over next five years

By Andrea Fox
Herald business writer·NZ Herald·
25 Dec, 2022 10:00 PM5 mins to read

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New Zealand SunGold kiwifruit supply expected to jump from 98m to 157m trays over next five years. Photo / Craig Robertson Photography.

New Zealand SunGold kiwifruit supply expected to jump from 98m to 157m trays over next five years. Photo / Craig Robertson Photography.

New Zealand Zespri-branded top class kiwifruit production is expected to increase by 39 per cent to 229 million trays by 2027, but the global marketer warns along with opportunities in the next five years come risks.

This year’s supply of Zespri class one fruit was 164m trays.

The Mount Maunganui-headquartered company, the world’s biggest single marketer of kiwifruit, said in a five year outlook report that the 2027 estimate included Zespri RubyRed fruit, commercial volumes of which would be established by 2025.

Offshore Zespri-brand fruit supply in 2027 was forecast to be around 60 million trays.

New Zealand supply of class one Zespri SunGold kiwifruit was forecast to increase from nearly 98m trays this year to 157m trays in 2027. The growth reflected the ongoing programme of growing licences, which in 2021-2022 yielded Zespri gross revenue of $430.1m. Zespri’s global operating revenue, including licence income, was $4.47 billion. The company has the statutory right to export all New Zealand kiwifruit, except to Australia.

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The five year plan forecast a significant rise in organic SunGold kiwifruit from around three million trays in the 2022-2023 season to more than six million trays in 2027-2028.

There would be no licence release for this variety in 2023 because current supply predictions would satisfy target market demand.

There was expected to be around 8590 producing hectares of both conventional SunGold and organic SunGold fruit in New Zealand by 2023-2024. By about 2027 this would deliver around 165m trays at current yield estimates.

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By the end of this financial year, Zespri would have 4745 planted SunGold hectares in the ground offshore. The offshore growing area was expected to reach the approved maximum of 5000ha by 2024.

New Zealand supply of class one conventional green kiwifruit was forecast to fall from around 60m trays in 2022-2023 to around 55m trays in 2027-2028, through conversion to other varieties and orchard removal.

This was expected to result in higher per tray value for green fruit, which was sensitive to competition from non-Zespri grown fruit. The company cautioned this estimate do not factor in the Environment Protection Agency’s current proposal to ban use of Hi-Cane in 10 years. Hi-Cane is a plant growth regulator which promotes uniform budbreak and flowering of kiwifruit, and earlier concentrated flowering of apples. Zespri said if the proposal is implemented, there would be a significant impact on green yields and consistency of fruit maturity and quality.

The five year outlook also forecast per tray orchard gate return ranges: $8-$12 for SunGold; $10-14 for organic SunGold; $6.50-$8 for green at declining volumes; $9-$11 for organic green at flat volumes; $10.50-$16.50 for RubyRed once volumes pass three million trays.

Market opportunities in the next five years were identified. They included the ongoing rise of global middle classes, with 57 per cent of the world’s population expected to be middle class by 2030. This would lead to increased disposable income and an appetite for new and different foods, Zespri said.

The global fruit category was forecast to grow at a compound annual rate of 5.8 per cent, as consumers chased health benefits, a trend spurred by the pandemic. With Zespri kiwifruit representing less than a one per cent share of the global fruit bowl, there was significant headroom for growth, the company said.

Innovation has the potential to boost orchard productivity, says Zespri. Photo / Supplied
Innovation has the potential to boost orchard productivity, says Zespri. Photo / Supplied

Globally, Zespri had less than 35 per cent consumer household penetration.

Being able to offer a global kiwifruit supply 12 months of the year was critical to keeping and attracting customers, the report said. Growers this year failed to support a Zespri proposal to increase offshore SunGold growing by 10,000ha. Zespri’s teams were now focused on increasing offshore production from the previously-approved 5000ha, the report said.

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The new Kiwifruit Breeding Centre, a dedicated joint venture between Zespri and Plant & Food Research, aimed to speed up development of new varieties. Several new green varieties had been approved for grower trial this year. The earliest they would likely be available commercially was in 2027, but Zespri had committed to move as quickly as possible in its evaluations, the report said.

Risks ahead included global economic uncertainty, supply chain and logistics issues, climate change impact and increasing orchard costs.

Fruit quality was cited as a headwind after a deterioration in New Zealand fruit quality. The industry has come together at all levels to address this problem.

Increasing competition was also a risk.

“The competitive environment continues to become more challenging as competitors try to leverage the category demand and value space created by Zespri,” the report said.

“The number of filings of plant variety rights application for kiwifruit cultivars in New Zealand elsewhere have increased in recent years and are likely to lead to more volume of competitor red and yellow varieties (both proprietary and public domain) especially during the northern hemisphere supply window to fill demand as Zespri seasonal programmes conclude.

“More branded kiwifruit products are also being seen in the supply.”

Unauthorised planting and growing in China of the Zespri-developed gold fruit G3 variety remained a “significant” risk, the report said. China is the world’s biggest producer and consumer of kiwifruit.

The harvest window of this unauthorised growing was in direct competition with New Zealand fruit in the last quarter of the year, and with offshore-grown Zespri fruit in the counter season, the report said.

Zespri was monitoring unauthorised growing and while enforcement was challenging and complex, it had in place a framework to monitor its key channels and accounts. It also continued to try to strengthen the relationship with the Chinese government and the local industry.







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