Drive To Optimise Efficiencies & Opportunities

Media Release 17 July 2003

Drive To Optimise Efficiencies And Market Opportunities

Chief Executive, Tim Goodacre says that by any reckoning 2002-2003 was an exceptional marketing year for ZESPRI, growers, suppliers and customers, clearly showing again how extraordinary results can be generated through the integration of production and delivery in the ZESPRI™ System and the strength of the in market teams’ direct relationships with retailers.

“The ZESPRI™ Brand and System is an investment that reaps rewards, adding value to what otherwise would be a commodity product to millions of global shoppers. Our integration, coupled with our ability to consistently deliver a great eating experience to the consumer, is our strength,” he said.

“Year on year record returns are not achieved by chance but by design. In the year under review the global ZESPRI team rose to the challenge of steep stretch targets to overcome the odds of increasingly price sensitive and safety conscious customers and consumers, jittery market economies, significantly reduced ZESPRI™ GREEN Kiwifruit volumes and still some retail caution over the shelf life of ZESPRI™ GOLD Kiwifruit – an issue that we are turning round through improved orchard and supply chain processes.”

The goals set were to ensure the best possible returns for each of the exclusive branded products, Mr Goodacre said in his review of marketing performance in the 2003 Annual Report.

“At the same time we quietly achieved a milestone. We extended the selling window and brand presence for ZESPRI through counter seasonal supply of sufficient volumes of quality fruit to enable seamless category management for selected customers in Europe, while Japan and Asia continue to be testing. Year-round management of the category is moving from a possibility to a reality.”

The 2003-2004 season, the first under Mr Goodacre’s stewardship, started later than the previous year, but strongly despite some pressure from the appreciation of the New Zealand dollar against ZESPRI’s major trading currencies.

Exchange rates were not the only factor that would affect seasonal returns. ZESPRI had to look at continually enhancing the perceived value of its product offering and the efficiency of the production and marketing delivery system.

“Many of our customers believe that we have reached the top of our game with pricing and premiums - and many of those customers can wield a market power that they can leverage without fear or favour,’ he said.

“New Zealand never will be the least cost producer of kiwifruit – we are far from the markets where we earn our best contributions – but we can be more efficient in terms of looking at reducing the cost of goods, packaging and onshore costs, or fruit loss for that matter, and that is already a priority for me.”

Mr Goodacre said ZESPRI would face increasing competition for supremacy in conventional GREEN product and “no doubt, new yellow-fleshed varieties will also try to dislodge our position as the purveyor of a unique, new kiwifruit while riding on our promotional coattail”.

He said an ever present need would be to continue to manage product allocations to ensure that available fruit is sent to the highest earning markets while developing other markets in preparation for higher volumes in the coming years.

“We have a very solid business, but we can always do better. It is my job to keep a firm hand on managing the seasonal performance for growers while prompting action to secure strategic progress of the 12 month strategy and our ability to continually differentiate our exclusive offering to earn premiums and so shape a sustainable future.

“Our aim must be to capture the value accruing from having a unique portfolio of branded kiwifruit products to offer the consumers of the world. And we must act with urgency to ensure opportunities to expand our presence are seized and that revenues do not escape us or are lost in the cut and thrust of managing the new season.”

Strategic marketing focus for 2003-2004

- Move toward 100% Taste ZESPRI™ as the industry flavour standard for all products as soon as practicable and expand the Ready to Eat programmes in all key markets
- Continue the implementation of the 12 month supply strategy through integration of alternative origin fruit into the ZESPRI™ System
- Increase available volumes of non New Zealand origin GOLD Kiwifruit and lift quality, conditioning and handling consistency to match New Zealand standards and thereby extend seasonal availability
- Build consumer demand in all markets for ZESPRI™ GOLD Kiwifruit
- Implement strategic, retail account management and category management to support a multiple kiwifruit offering
- Strengthen in-market ORGANIC pricing
- Revamp current brand architecture to secure value potential from segmentation
- Create demand for full range of products through integrated marketing programmes, which will include a European pilot, consumer programme featuring advertising and retail promotions, aimed specifically at achieving a retail premium for ZESPRI™ GOLD Kiwifruit
- Further extend collaborative marketing programmes and opportunities

ENDS

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