Mood of the Boardroom: Zespri forecasts $3b boost for growers as kiwifruit sales hit record highs
As it readies to inject nearly $3 billion into regional economies through growers this year, national kiwifruit exporter Zespri says the sector is feeling “buoyant” but, in these uncertain times, feet are firmly on the ground.
Nathan Flowerday, chairman of the global marketer that has the regulatory right to export all New Zealand kiwifruit, except to Australia, says the sector’s come back from tough times two years ago, and having exceeded its long-term goal of $4.5 billion annual revenue by 2025, is now setting its strategy for the next decade in good heart.
The grower-owned company is still developing a revenue target for 2035, Flowerday says, but will have a positive tailwind thanks to the “mega-trend” of health and wellness pursuit, which has marked consumer demand since the pandemic.
In its 2035 strategy outline Zespri cites “geopolitical complexity” and notes countries moving towards “isolationism and implementing trade barriers”.
But Flowerday believes Zespri’s market diversification – it exports to 52 countries – built over decades gives it a little more wriggle room than some sectors to adapt to changes.
“If I take this year as an example, the USA we see as our fourth key core market over the long term. We’ve been working on that market for over a decade now and our sales have increased 30% this year, even in spite of new 15% tariffs.
“That’s because we’ve invested in the market. We’ve had a long-term strategy there ... so I have some reasonable confidence that we will continue to be able to manoeuvre over the next decade as well.”
Zespri’s 2500 New Zealand growers have turned in a record crop to be shifted this year and, while it reports record forecast per hectare returns for all categories except SunGold and organic green, along with strong sales in Europe and North America, in correspondence to growers it has noted a shift in economic mood across many Asian markets.
Flowerday says sales have been slower in China this year. Whether that’s short-term or structural is something the company’s still working out.
“From a mega-trend point of view, we still see China as important over the next decade. There’s just a little bit more nervousness in terms of what the markets are going to do.
“Switching the view to Japan, where there is almost $1 billion of New Zealand fruit sales for us, they have some inflation now, which they’re not used to. Rice has doubled in price for a Japanese consumer in the last year. So they are concerned about what that means in terms of their cost of living, and what that means in terms of their selection of food choices, including kiwifruit,” he says.
“We’re really happy with where we are and we know we’ve got to continue working hard, playing our part for New Zealand.
“We know how important Zespri is for New Zealand now.”