The world has changed so much that a bunch of farmers from southern Germany have gone to the other side of the world to buy into a New Zealand company, believing this will open new opportunities in Asia. For that is what BayWa’s acquisition of a majority stake in Turners & Growers/Enza boils down to. As chairman Klaus Josef Lutz said in our January issue, “New Zealand might be far away in terms of geography, but it is very close in terms of our strategy and will enable us to open up the Asia market.” So a company from the world’s largest exporter of manufactured goods buys into the world’s most isolated fruit-growing nation in a bid to unlock more business in the world’s largest consumer markets. Go figure.
As Shakespeare taught us to say, there may be method in this madness. Look closely and you see a deal that definitely makes a lot of sense, both for the Germans and the New Zealanders. The interest BayWa has shown in New Zealand has certainly put a spring in the step of apple growers in Hawke’s Bay and Nelson. Europe’s ongoing recession, allied to the continued strengthening of the New Zealand dollar against the euro, has positioned them nicely on the edge of an abyss. You might say that BayWa could be about to rescue New Zealand’s apple industry from the threat of global irrelevance.
New Zealand has featured prominently during my almost 25 years as a fresh produce journalist, and the transformation of its apple business in that time has been remarkable. At one time, the New Zealand Apple & Pear Marketing Board was for apples in Europe what Apple Inc is for personal computers – a market leader at the premium end of the commercial spectrum. Their fruits were like little balls of gold, fetching the highest prices in Europe from spring onwards, not to mention enriching apple growers and marketers alike.
Overnight deregulation of their industry a decade or more ago came much too soon for some but not a moment too late for others. Suddenly New Zealand apple growers were exposed to the full forces of the international market at a time when other countries were growing New Zealand’s signature varieties, often more effectively and almost always more cheaply. Without the marketing board, growers understood there were other major markets outside the UK and Germany that needed careful and proper consideration.
The struggle for control of New Zealand’s apple industry has dominated discussions down under and filled the pages of trade magazines up here. It has been a long and often brutal political battle. BayWa’s planned acquisition of T&G/Enza brings with it something of the sense of an armistice, a moment of change that will afford orchardists and marketers alike the opportunity to focus on what’s really important, namely how to make New Zealand apples more competitive on global markets.
It also raises the question of how New Zealand’s kiwifruit industry will cope with the Psa crisis. Zespri might have been spared the travails of its topfruit counterparts in recent years, but its senior management team faces big decisions of its own about the future direction of the business. Over the last ten years, Zespri has set about creating a successful global brand. It now needs to figure out how to expand its reach at a time when a significant proportion of its Gold production – in New Zealand and Italy, most notably – is under threat. The answer, it seems clear, has to be found in different and better kiwifruit varieties, because ultimately Zespri has to ensure that growers keep faith with its unique, single-category model and trust in its apparent ability to invest in the best new product research and development that money can buy. Whatever happens, New Zealand is certainly going to keep us all busy.
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