Deciding on how to approach halting illegal plantings of SunGold in China, while also working towards a reformatted taste programme back in New Zealand for the 2021 season, are some of Zespri’s ongoing challenges, according to chief executive Dan Mathieson.
Delivering his speech at Zespri’s first fully virtual Annual Meeting last month – due to NZ’s Covid-19 community outbreak – via video recording from his Singapore base, Dan says while Zespri has much to celebrate “there remain some ongoing challenges as we look ahead”.
“Our understanding of the illegal plantings of SunGold in China has continued to evolve, and we now believe there could be as much as 4000ha planted there.
“Our focus remains halting the growth of these plantings and mitigating the impact on our brand and business, and we’ll continue to adopt a multi-faceted legal and political approach to protect our retail channels.”
Dan says it’s a highly complex situation. “One potential option we’ve been advised to explore is whether there is a commercial opportunity in commercialising SunGold in China that generates returns for our industry and also mitigates the spread of unauthorised SunGold,” says Dan.
“No decisions have been made, nor will they be without fully engaging our New Zealand stakeholders and shareholders. And we’ll continue to speak with growers and the NZ and Chinese governments in the coming months.”
Taste programme for 2021
Dan says Zespri is also continuing to refine its approach to establishing a reformatted taste programme for the 2021 season. This comes from the fallout of Eurofins Bay of Plenty dropping its dry matter testing service – the only one in the country – at harvest-time this year, which meant growers were not paid for taste profile of their fruit.
“Work on this programme is ongoing, driven by the Industry Advisory Council, with technical working groups developing proposals for the industry to consider.”
Dan says poor tasting fruit arriving in the market would quickly destroy the hard-earned value of Zespri fruit. “We must have a taste system for the industry and we remain committed to a solution that enables us to continue to incentivise the best-tasting fruit and drive greater value.”
He added investment in protecting our Plant Variety Rights here and abroad and in Zespri’s new variety programme will continue too.
Opening the meeting, chairman Bruce Cameron said 2019/2020 had been another strong year for Zespri and NZ’s kiwifruit industry. “We’ve delivered excellent results by challenging ourselves to stand up and stand out. As an industry we’ve adapted, shared ideas and worked together to continue to operate safely throughout the challenges of the Covid-19 pandemic.
“Collectively, we should be proud of our hard work, resilience and the way we finished the season. This has given us the best chance to succeed.
“I know this year has been incredibly challenging – it was for Zespri, for post-harvest and for growers. But it’s also a year in which we’ve made decisions that will set us up for future success.
Decisions for future success
“That includes commercialising a new variety and launching our new brand. Formally opening the new meeting wing of our head office, which is now a true hub for the industry. Showing real leadership on sustainability.”
Bruce says the financial year ending March 31, 2020, had produced record results for Zespri and the industry. “Our total operating revenue was $3.36 billion, up from $3.14 billion last year, with global revenue from fruit sales increasing by seven per cent to $3.14 billion in 2019/2020.
Zespri also delivered 164.4 million trays of kiwifruit to hundreds of millions of consumers worldwide. “These numbers are incredibly encouraging for the industry and the wider NZ economy during a time of so much economic uncertainty. And this success will ensure we’re well placed to weather any storms ahead.”
Bruce says while clearly risk remains with Covid-19 – “and we must remain cognisant of that” – Zespri is seeing good signals in the markets “and increased demand for fresh, healthy fruit like ours”.
“It’s also important we acknowledge that our success can’t be taken for granted. Our industry knows that more than most, because we face risk right across our supply chain – from orchards through to the evolving desires of our consumers.
“As a fast-growing industry, that includes a number of capacity constraints – in particular labour and post-harvest. Offshore, there’s the threat of losing market access, of competition and global economic uncertainty surrounding the impacts of Covid-19. And there are ongoing threats to our brand reputation as consumers look more closely at companies and how they do business.
“That last point in particular, reinforces the importance of continuing to meet industry compliance requirements and maintaining our own high standards so that we remain an industry our consumers respect.”