Kiwifruit sales to China, Japan set to hit $1 billion

Demand for kiwifruit continues as sales to China and Japan are tracking at record pace. Photo / File

Kiwifruit marketer Zespri says latest sales to China are tracking at a record $500 million, while Japan looks set to make it a double, earning another half a billion dollars.

The two countries are Zespri's biggest customers. Most of the kiwifruit sold there in the 2017-2018 season was grown in New Zealand, with supply from Zespri-contracted growers overseas, including in Japan, supplementing demand.

Zespri spokesperson Rachel Lynch said financial results for the 2017-2018 season were still being finalised but China and Japan were expected to bring in $1 billion equally between them.

Zespri's total sales in 2016-2017 were $2.3b.

The Mount Maunganui-based company, which has a near-monopoly on kiwifruit exporting by regulation, has committed to more than double annual sales revenue from New Zealand and its overseas orchard outposts to $4.5b by 2025.

Lynch said the indicative $500m of sales to China, where the fruit originated and which today is a Zespri competitor, compares to sales of $446m in the 2016-2017 season.

The sales comprised 14.6 million trays of New Zealand gold fruit and 7.9 million trays of green kiwifruit. Sales to China were topped up from overseas Zespri-contracted orchards with 1.1 million trays of gold fruit and 0.5 million green fruit trays.

For Zespri chief executive Dan Mathieson, Japan is a particular sweet spot, after sales leapt by nearly six million trays to 24.4 million trays in the two seasons between 2014 and 2016, easing to 23.6 million trays last year.

Interestingly, while Mathieson said Zespri's new gold fruit varieties, which replaced the gold variety Hort16A ravaged by disease from 2010, had been a big hit in the Japanese market, green fruit is holding its own there, judging by Zespri's 2017-2018 figures.

New Zealand-grown green fruit accounted for 11.7 million tray sales, with gold fruit at 12 million trays. Gold fruit sourced from Zespri's growers in Japan contributed 200,000 trays to latest Japan sales.

Mathieson attributed the Japan sales spike to Zespri's effort to understand what consumers want and to the introduction of new variety Sungold.

"More and more they say they want ready-to-eat fruit they can eat on the go. And they want the health and nutrition value. Sungold has the attribute of being convenient to eat and it brings a sweeter taste," he said.

Tariffs imposed by Japan cost kiwifruit growers $26 million last season. Zespri is confident the recent signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership will reduce that tariff to zero.

But Mathieson said not all the $26m saving would come back to New Zealand.

"We want to make sure we get a benefit for Japanese consumers as well - if they see better value in our product they will buy more of it. We'll be able to make our fruit more attractive ... whether this is by dropping the price or holding the price will depend on the season and the competitive situation in the market."

Kiwfruit's biggest competition in the Japanese fruit bowl is bananas.

Zespri expects its annual sales to Japan to increase by about 25 per cent over the next five years. The 2018-2019 kiwifruit harvest has just started in New Zealand.