ZESPRI Launches Three New Kiwifruit Varieties

Media Release - 17 June 2010

The world’s most successful horticulture marketer, ZESPRI Group Ltd, has announced today the next steps in the ongoing development of the New Zealand Kiwifruit industry with the commercialisation this winter of three new types of kiwifruit and the start of on-orchard trials for a further two new varieties.

A total of 600 hectares of the three new commercial varieties will be licensed to be planted or grafted this season, about five percent of all the New Zealand land currently planted in kiwifruit. Growers will receive detailed information on the new varieties on Monday.

The decision to proceed, made by ZESPRI on Wednesday, follows a 10-year development programme by ZESPRI, in association with the New Zealand Government through Plant & Food Research, four years of on-orchard, storage, shipping and taste tests in New Zealand, Europe and Japan, and extensive work with growers and international customers.

The three new varieties for planting or grafting this winter are an early-season GOLD (Gold3); a potentially long-storing GOLD (Gold9); and a new sweet GREEN (Green14). The two new varieties for on-orchard grower trials are both RED Kiwifruits and are now on the shortlist for future commercialisation.

ZESPRI Chief Executive Lain Jager said the decisions were vitally-important steps in the ongoing development of ZESPRI and the New Zealand Kiwifruit industry, and part of its medium- and long-term strategy to progressively and sustainably grow the New Zealand Kiwifruit offering while taking care not to cannibalise existing sales and prices.

“This has been the most thorough and rigorous product development process ever undertaken by the New Zealand horticulture sector, and, as a joint industry/government initiative, it is New Zealand Inc at its best,” Mr Jager said.

He said that more than 50,000 potential new varieties had been part of the programme, more than 10,000 had made the initial shortlist, 40 went to initial growing trials, four made it to on-orchard trials and underwent on-orchard, storage, shipping and taste tests, and three have reached the stage of commercialisation. For the RED varieties, nearly 2,000 different options had been considered, with more than 10 making it to initial growing trials, and two to on-orchard grower trials.

Two hundred hectares of each new variety would be licensed this winter. This would be progressively increased based on on-orchard, storage, shipping and consumer performance. First significant sales volumes are expected in 2013.

Mr Jager said the new varieties provide exciting new opportunities for growers interested in either GREEN, GOLD or both.

“In GOLD, ZESPRI has the world’s best performing horticulture product,” he said. “GOLD orchards are highly productive, yielding approximately 22 percent more fruit per hectare than GREEN Kiwifruits, and GOLD product then achieves premiums of more than 100 percent over other varieties – something which, to ZESPRI’s knowledge, no other horticulture marketer has ever managed to achieve.

“We have therefore made the strategic decision that the next best step we can make in our business is to strongly grow the GOLD product line, and take a major step towards year-round supply, primarily from New Zealand.

“We can do this highly efficiently, without the cost of launching an entirely new brand into the marketplace and it avoids the risk of confusing consumers with too many similar offerings, as other horticultural businesses have sometimes done. Our taste tests indicate that the two new GOLD varieties are seen as near-identical to the existing ZESPRI® GOLD Kiwifruit so that they can be marketed within that brand portfolio.”

Mr Jager said that consumers in Europe, Japan and elsewhere in Asia want ZESPRI® GOLD Kiwifruit all year round, driving ZESPRI’s 12-month supply strategy.

“Right now, New Zealand can meet demand for ZESPRI® GOLD Kiwifruit for 20 weeks of the year, with the rest being met from offshore supply,” he said. “Today’s decisions are about taking that towards 30 weeks, delivering a potential 50 percent efficiency gain in our marketing and distribution network from New Zealand, with the balance of demand to be met by ZESPRI® GOLD Kiwifruit growers in the Northern Hemisphere as that business develops in the future.”

Mr Jager said the early-season GOLD was expected to be exported in March, arriving in markets up to three weeks ahead of existing GOLD, with the other new GOLD variety delivering exports hopefully all the way through to Spring.

On-orchard research had indicated both were likely to be as productive as the existing ZESPRI® GOLD Kiwifruit variety, and cost no more to grow.

Mr Jager said the commercialisation of the new sweet GREEN Kiwifruit provides growers with an attractive option for a new market segment.

“The sweet GREEN will be exported into premium markets and decisions about how it will be branded will be made next year. Our market managers see strong potential for sales at the start of the season and – being a new sweet variety – it also has the potential to attract new consumers to kiwifruit.”

The speed of growth from the additional 200 hectares will be determined by a wide range of factors, including yield per hectare. Current indications are that the new GREEN variety is comparable in terms of cost of production and yields as existing GREEN Kiwifruit.

Mr Jager said today’s announcements were just the start of a programme to progressively and sustainably expand ZESPRI’s product range over the next decade and beyond and to triple export earnings by 2025. All new varieties including these five being progressed today have been developed using natural breeding techniques.

He said there was particular media interest in RED varieties and he expected results from the two on-orchard trials to be available in the next 2-3 years.

“It is absolutely essential we get all these decisions right – especially the inevitable decision to launch an entirely new ZESPRI® RED brand globally. There are literally tens of thousands of kiwifruit varieties that we or others could potentially try to sell, but uncoordinated new product launches only risk driving down prices and overall returns to New Zealand. Only a handful of the tens of thousands of types of kiwifruit that are possible will meet ZESPRI’s tests and standards, from on-orchard performance through to consumer preference.

“As with any new venture, our growers will think carefully about the commercial risks and opportunities presented by these new varieties, before they make a decision for their orcharding business, and we will be providing extensive information as part of that process.”

Mr Jager said there were also opportunities for those interested in growing and exporting other kiwifruit varieties to work with industry regulator Kiwifruit New Zealand (KNZ) and ZESPRI to sell these beyond New Zealand and Australia under the industry’s collaborative marketing arrangements. More than 16 companies are already exporting from New Zealand under these arrangements and further growth in this area is expected.

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