Kiwifruit marketer begins consultation on how it plans to tackle growing Gold3 supply in China
Zespri has started a conversation with its New Zealand growers about a potential China Supply procurement model as part of efforts to respond to Chinese-grown Gold3 (G3).
In a newsletter to growers, the kiwifruit marketer said the China market was evolving, and it identified the improvement of local Gold3 production as a key trend. Zespri estimates there is between 7,100ha and 8,100ha of Gold3 planted in China with a Class 1 packout rate of 70-80 per cent that is improving quickly.
Zespri CEO Jason Te Brake said although there is still strong demand for Zespri kiwifruit, the market was becoming more competitive and complex.
“We’ve been talking for some time about the need to respond to the issue of the China G3 plantings, and we think now is the time to start that conversation. I’ve seen first-hand how local G3 is improving,” Te Brake said.
“The quality, the branding and the confidence in the product are increasing quickly, presenting a growing challenge to us all. Our brand is known and trusted, but we can’t take our success in China for granted and we can’t stand still.
“Whatever we decide as an industry needs to be well worked through, with you as growers getting the opportunity to understand the issue, the options and the risk, and to work to a solution.”
Zespri last broached the topic of unauthorised Gold3 plantings in 2021 when it held a producer vote to approve a one-year orchard monitoring, procurement and sales and marketing trial in China. The vote failed to reach the required support threshold of 75 per cent, with only 70.5 per cent of growers supporting the primary resolution.
A second trend influencing Zespri’s decision to examine its approach to China is variability in quality, particularly late in season. It’s a challenge amplified by growing consumer expectations, increased competition from other categories, and fresher, local Gold3. Chinese-grown fruit is available from September through to March.
Zespri said it has now identified two potential plans of action, which it will put forward for grower feedback while also hearing thoughts on alternatives.
One option would be to continue competing with New Zealand supply by focusing on improving quality, particularly in the late season.
A second proposed option would be “a tightly controlled China Supply procurement model to complement New Zealand fruit”.
Under this model, if late-season New Zealand fruit falls below quality benchmarks, Zespri would have the option to transition to locally-grown Gold3 that meets its standards.
This model would be similar to Zespri’s existing global supply model for its green kiwifruit, where it procures Hayward from both Italy and Greece.
Under this approach, all fruit would be required to meet Zespri’s quality, maturity and food safety requirements, with additional oversight in-market.
Zespri noted any China supply model would require grower support via a producer vote, which would not be considered until 2027 depending on grower feedback.
Zespri said it now plans to engage growers directly and seek feedback on its next steps.
