So dominant in kiwifruit is New Zealand producer Zespri International that it can boast its nearest competitor is not another company but another country – Italy. In this month’s Just the Answer interview, Zespri CEO Tony Nowell explains how the company has built its international presence and how it plans to continue to grow, which will include meeting environmental concerns relating to cultivation and shipping.
just-food: How has Zespri International managed to secure the position of leading kiwifruit marketer in the world?
Nowell: There are two things that have put us ahead globally – a high-quality product and strong supply chain. We follow a very strict discipline with all of the 4,000 growers we represent globally, as well as with our post-harvest operators. Our customers have come to rely and trust the consistent high quality of our fruit.
We have a strong supply chain system in place and have built very close relationships with everyone at each step of the process to ensure this quality level. If you’re shipping from the other end of the Earth you need to be good at what you do and have a successful business model, which is what we have.
When shipping, we use reefer ships instead of container ships. These fully refrigerated vessels allow us to control the temperature and atmosphere while shipping our product. This allows us to condition the fruit during shipping – controlling the rate of ripening. There may be nothing unique about using reefer ships but in the kiwifruit industry we are the leader when it comes to using this technology.
j-f: Zespri has a global reach and supplies 60 countries with kiwifruit. Who are your closest competitors?
Nowell: We are miles ahead of the next competitor. It’s probably better to say that our next closest competitor is an entire country, which is Italy, rather than just a brand from a country. Within Italy the main company there is still well behind us.
j-f: Zespri Gold is proving to be popular overseas. Looking at your annual report, tray sales were up by 18% this financial year, while tray sales of green and green organic were down. What is special about Zespri Gold compared to ‘conventional’ kiwifruit and where is it doing well?
Nowell: It’s a sweeter product with a different flavour profile – more of a tropical flavour. Sales are going well and we currently sell everything that we can produce. We primarily sell this product in Japan and Europe. The Japanese really love kiwifruit and have a sweeter palate, which is one of the reasons it does so well there – plus we also have a strong brand reputation there. We sell some into [South] Korea and Taiwan and also the main cities of China and some cities in the USA.
j-f: It sounds like Japan is one of your strongest markets; in which other countries does Zespri have a strong presence?
Nowell: Japan and Europe have been our two largest markets but our reach has now expanded more throughout Asia. Due to the growing economies in both Korea and China, consumers have an increasing amount of disposable income and are searching for higher-quality products. We have been able to utilise this opportunity through our strong brand name. We are also continuing to grow very strongly in Europe.
j-f: What is driving the demand for kiwifruit among your customers?
Nowell: Consumers have become more concerned with preventative health and have recognised kiwifruit as being a very healthy fruit. It is high in vitamin C and is also very good for helping with regular bowel movements. There is scientific evidence showing kiwifruit’s immune-boosting properties and there is emerging evidence of its cardiovascular benefits.
j-f: How do you provide your customers with added value and how do you plan to do so in the future?
Nowell: We offer a product that is consistent in its high quality and that has the highest level when it comes to taste and appearance. We also spend around NZ$20m (US$15m) a year on research. In New Zealand, we work closely with Hort Research, a world leader in fruit science. Research and development is very important to us so we can add further value for consumers.
Our research focuses on providing further scientific evidence of the health benefits of kiwifruit as well as finding more convenient means of providing our product to consumers. One example is, when the technology is available, we hope to provide kiwifruit as a pre-cut fruit, something which is just not possible at the moment.
j-f: What other future plans does Zespri have?
Nowell: We plan to increase the amount of gold fruit grown under licence in Italy, France, as well as a small amount in South Korea, Japan, Chile, and parts of China. We also plan to keep our position as the global leader and to help the growth of the industry on a global scale.
j-f: What green issues does Zespri face and how are you overcoming the challenges they present. Are consumer concerns over ‘food miles’ hitting the business?
Nowell: We already grow a reasonable quantity of organic kiwifruit in New Zealand. Organic farming is a growing opportunity but it takes a lot for a grower to convert from conventional methods to organic methods – although more are doing so.
We monitor the amount of spray used by taking an active part in the growing process, working closely with growers. We are also aware of irrigation issues. Through our KiwiGreen programme and Project Footprint we are addressing environmental issues.
We all recognise ‘food miles’ is an issue but it is a very complex issue. It’s overly simplistic to treat the issue as just food miles or transport without looking at energy use over the entire life cycle of our product. Roughly the same amount of energy is used to transport product from New Zealand to the United Kingdom by ship as is used to transport product by truck from Greece to the United Kingdom. Through Project Footprint we recognise the larger issue at hand and have been working with major retailers, government institutions, and NZ academia in a collective effort to address carbon issues.
Interview: Karryn Cartelle