Zespri importer urges partnership ‘soon’

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One of China’s largest fresh produce producers and importers says a commercial partnership with Chinese kiwifruit growers is something New Zealand growers should consider to protect their market position as the competitive threat grows.

Liu Zijie, owner and founder of Good Farmer fruit and produce company, is Zespri’s second largest Chinese distributor of kiwifruit in China, accounting for around quarter of the NZ company’s exports there.

In an interview with Farmers Weekly at this year’s China International Import Expo in Shanghai, he said after 13 years of importing Zespri fruit, the company has earned his deepest respect for its culture and business operations.

“Particularly now under leadership of Michael Jiang here in China, the team knows how to go wide and deep into the China market and, with a five-year strategy now firmly in place, it gives us more confidence in our own planning.

“So much so we now have committed 220 staff here in China solely to overseeing Zespri imports and distribution.”

He said the defining aspect is identifying the kiwifruit as Zespri-branded kiwifruit, rather than New Zealand kiwifruit labelled by Zespri. Global supply to keep fruit on the shelf all year round has helped strengthen Zespri as a valued household fruit brand.

But looking ahead he can see Chinese growers continuing to move to plant more G3 fruit, particularly in the Chengdu region, with Zespri’s out-of-season supply shortfalls making it particularly vulnerable to these increased locally grown volumes.

“The timing of Chinese growers in Chengdu for harvest is particularly good for Chinese New Year [January-February period], which brings a really big increase in demand for fruit as gifts.”

At present Zespri-branded SunGold fruit is shipped from Italy to meet out-of-season supply, but it takes six weeks, and Italian sourced fruit faces a 20% tariff. There is also very limited Italian volume available for the China market.

He wholly endorses Zespri’s past efforts to identify kiwifruit growers in Chengdu who are good operators, and explore the potential of them being part of a grower team.

This would, however, be subject to gaining NZ grower voter approval back home.

“There is still some way to go with quality here in China. Some growers have good techniques and land but not all – but they are getting better.

“But if Zespri does not join up with local growers, I am sure in the near future a Chinese company will make a brand of equal quality, and Zespri will lose its opportunity here to really gain value over the Chinese New Year market period.”He believes the company has one year, maybe “two at most”, before that happens.

“At present we are at least 10 million trays of supply short of what we could sell over Chinese New Year.”

Zespri is marketing about 45 million trays into China this year and he was quite confident the market could take another 15 million during the NZ offseason, including extra NZ fruit.

“It would be far better to turn this into an opportunity rather than competition, and it will become a real problem in the future.”

He noted the recent court case and prosecution of a large-scale unauthorised G3 grower.

“It will help slow plantings, but I am not sure by how much, and the case is subject to appeal.”Given the level of investment already in place in infrastructure and distribution chains, collaboration would not demand a great deal of outlay by Zespri.

“And I know while relations between China and NZ are already very good, they would only get even better if an arrangement could be arrived at.”

Rennie’s Meeting the Market tour has been made possible with grants from Fonterra, Silver Fern Farms, Rabobank, Zespri, Alliance Group, Meat Industry Association, Wools of NZ, Beef + Lamb NZ, NZ Merino, the European Union and Gallagher.