Zespri to increase Italian production to meet rising demand

MEDIA RELEASE: 9 February 2017

Zespri to increase Italian production SunGold kiwifruit to meet rising demand

Zespri will allocate an additional 1,800 hectares of European SunGold licence over the next three years, doubling production of the proprietary kiwifruit variety in Europe. The first 1,200 hectares will be in Italy with the remaining 600 hectares still to be allocated.

Zespri Chief Operating Officer Simon Limmer explains this significant investment to extend Zespri’s supply base in Europe is driven by growing year-round demand for Zespri Kiwifruit.

“Twelve-month supply is a key part of Zespri’s strategy and this investment aligns our offshore production with the strong increases in New Zealand SunGold volumes, set to double to around 90 million trays over the next five years,” says Mr Limmer.

Zespri President Global Sales & Marketing Daniel Mathieson explains Zespri invested around NZ$160 million last year in targeted marketing at trade and consumer levels, which benefits the entire kiwifruit category.

“Kiwifruit makes up just 0.22 percent of globally traded fruit: our goal is to grow kiwifruit consumption around the world. Large-scale investments like this help us achieve that goal and meet the very strong consumer demand for this great-tasting, quality fruit, which has brought real excitement to the global kiwifruit category.

“We’re pleased to see the growth in kiwifruit volumes around the world, which underscores just how important it is for all kiwifruit producers to supply good quality, tasty fruit to support this category growth,” says Mr Mathieson.

This significant investment will be initially delivered through the longstanding partnership with four Italian suppliers – Apofruit, Alegra–Intesa, Salvi Unacoa and Spreafico – the four suppliers originally contracted with Zespri in 2000 to produce the previous gold variety Hort16A which ignited the gold category worldwide. SunGold and the earlier gold variety Hort16A were developed by Zespri and Plant & Food Research as part of the annual NZ$50 million investment by New Zealand’s kiwifruit industry and government in innovation, which includes breeding new varieties to attract new consumers to eat kiwifruit regularly.

Current production of Zespri SunGold in Italy is over 4 million trays this year from 800 producing SunGold hectares. There are another 850 licenced hectares in the ground which will come into full production in the next few years; the combined volume of the existing 1,650 hectares and the new 1,200 hectares will see Zespri’s Italian SunGold volume quadruple to around 15 million trays in the next five years. The volume from the additional 600 hectares would be on top of that.

Mr Limmer explains that New Zealand growers are seeing the benefits of a high-performing, high-quality variety, managed through the Zespri supply chain and marketed under Zespri’s premium brand, which celebrates its 20th birthday next month.

“Growing Zespri Kiwifruit in Italy for the past 17 years has seen us develop strong partnerships with Italian growers and suppliers, making Italy the logical choice to expand our production base,” says Mr Limmer.

Zespri is responsible for export and marketing of premium New Zealand kiwifruit to 56 countries around the world. It has established a strong source of supply from Northern Hemisphere countries, particularly in Italy and France, to supply customers for 12 months of the year with premium Zespri Kiwifruit for the several months where New Zealand kiwifruit is not available.

The new plantings will be staged, with 1,200 hectares to be established in Italy over the next two years and a further 600 hectares planned for Europe in 2019/20.

Zespri invests strongly in supporting its growers with technical advice to maximise their returns from growing for Zespri and will collaborate closely with its Italian partners to achieve the increase in supply over the coming years. Zespri shares best practice growing techniques, Psa learnings and R&D with grower forums in its offshore production bases.

Ends

Background information

• Zespri sources premium quality kiwifruit from Northern Hemisphere orchards to supply the market for the few months of the year when NZ-grown kiwifruit is not available, with orchards in Italy, France, Korea and Japan. This is managed by the ‘Zespri Global Supply’ (ZGS) division of the company.

• The majority of ZGS fruit is grown in Italy.

• Zespri has a long-standing association with growing premium Zespri Kiwifruit in Italy, through partnership with Italian growers and suppliers.

• Zespri has 170ha of SunGold licenced in France which is yet to reach full production. This is set to triple in the next five years

• Zespri exports ZGS Italy Green fruit principally to European markets but began exports of fruit sourced in Italy to China for the first time in 2014 and again in 2015 and 2016. Zespri was awarded the Macfrut export award in 2015 in recognition of our role in supporting Italian kiwifruit industry’s export success.

• ZGS sales revenue were NZ$184 million in 2015/16, up from NZ$168 million in 2014/15. Total Zespri sales for the same period were NZ$1.9 billion

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