Archive for 'Kiwifruit'

The Winter’s Tale

seeka_kiwifruit_industries_limitedOnce upon a time, there was “an integrated kiwifruit orcharding and post-harvest company” called Seeka Kiwifruit Industries Ltd, which ran a pretty tight ship in a sector of the produce industry the business understood really well – kiwifruit. That was not a surprise to anyone because one would expect kiwifruit growers to understand everything there is to understand about kiwifruit. And if there was something about kiwifruit the kiwifruit growers who owned the orcharding and post-harvest company did not understand about kiwifruit, they could always ask the good people at Zespri who understand the marketing aspects of kiwifruit really well. Because unlike the orcharding and post-harvest company, Zespri really understands everything there is to understand about dealing with kiwifruit retailers and their needs, demands and quirks.
Being a kiwifruit grower has had its ups and downs in recent years, but the kiwifruit orcharding and post-harvest manager in question sought NZX listing and developed a strategy which can be found on its website. The strategy says that the company wants to be “New Zealand’s premier produce business”, and that “developing complementary business” will add to the company’s prospects for future growth. As one would expect from a kiwifruit orcharding and post-harvest company, it already packs a complementary crop, avocados, and the 2013 Annual Report states “limited volumes of Kiwiberries will be handled…in 2014”.

No big surprises so far – and the fairly ambitious statement about wishing to be the country’s premier produce business could be seen as a bunch of Bay of Plenty growers having gotten carried away at a strategy & vision session.

And then there was this announcement recently:

Seeka Kiwifruit Industries Limited advises that it has agreed to purchase Glassfields (NZ) Limited“.

I beg your pardon?

Did I get this right?  A kiwifruit orcharding and post-harvest company is buying a banana importer which exists at the grace of Countdown?

Apparently, I did understand correctly.  The purchase was completed on 17 April.

Now, adding a banana importing and ripening interest to one’s produce business activities is a significant undertaking in anyone’s book.  Well, almost anyone’s.  Here is how Seeka classified its move:

“Glassfields is a small but important step in Seeka achieving its strategic goal of becoming New Zealand’s Premier Produce Company.”

A small step? I don’t think so.  Bananas are the ultimate big league product. Kiwifruit are important to the extent that we manage to fill whole reefer vessels here in New Zealand and send them to the world’s markets.  But within the context of the global fruit trade, Kiwifruit are one of many ‘also run’ sub-tropical products on offer on the world’s fruit & vegetables shelves and any supply issues or disruptions at store level is at best of nuisance value. Woe behold though, if a supermarket experiences a banana supply problem and be it ever so small. Produce shoppers judge the state of the whole  produce department on the quality of the bananas for sale and any deviation from the norm in terms of volume, ripening stage, shelf life or size will lead to pretty hefty “Please explain” requests being issued by agitated banana category managers, and depending upon the severity of the deviation, more senior supermarket managers will fairly rapidly become involved as well. An attention level not afforded to Kiwifruit, Avocados and Kiwiberries I might add.

fortune favours the bold

I am sure Countdown doesn’t think that step is all that small.  Although Countdown has started to diversify its banana offer in recent months, Glassfields was after all started to facilitate the supermarket’s ability to break free from having to purchase bananas from the global brands such as Dole and Bonita and their local supply partners.  Glassfields manages the logistics of getting Countdown’s Gracio bananas (a Sumitomu brand) into the country and into the retailer’s stores.  ’Manages’ as opposed to buying, as Countdown has a direct supply relationship with Sumitomu, as well as with its new Ecuadorian supplier, of course.

So – whilst the whole banana supply scene has become more diversified as the result of advances in  container shipping technology and practices, I would still call it a bold step for a kiwifruit orcharding and post harvest company to leapfrog to banana ripener and distributor status in its quest to grow, diversify and secure its business. One can only wish Seeka well in their endavour.

By the way, did you  figure out why the story is entitled ‘The Winter’s Tale’?  You might want to check this page. The first paragraph will suffice.

ACT Has A View On The Future Of Kiwifruit

Act has discovered a new topic.  Well, it is not exactly new but it is new for Act.  Or is it?  Didn’t John Thompson, ACT’s erstwhile connection with the produce industry blow that particular trumpet some years ago? He might well have….but one can’t make much progress on John’s ACT page . The content appears to have been written in some kind of secret ink, only visible to ACT party members….

110908kiwifruitBe that as it may, ACT now would like the Government to deregulate the kiwifruit industry.  Deregulation does, of course, have its merits and, yes, the Zespri model is a anachronism in a country that has made deregulation and market forces supremacy the ultimate objectives we should all strive for. But if kwifruit deregulation brings us behavours akin to the one we have just seen with respect to Hawkes Bay apples….who needs it?  And in the current PSA environment, the kiwifruit industry needs to work together and not be let loose for growers, packers and coolstore operators to tear each other apart, I would have thought.

 

Global Shrink

The world is a much smaller place than when I was at school.  I barely knew where Chile and New Zealand were, never mind ever seeing fruit grown there for sale in my local shop in Germany.

Yet here I am in a warehouse in Rotterdam, taking photos of southern hemisphere kiwifruit as spotted by the IFPS Board member for Chile, Tom Tjerandsen!

It’s a small world indeed…

They’re selling our fruit here

I travel half way around the world, and what’s the first thing I see upon entering a supermarket in Rotterdam?

This was during the industry tour mentioned a blog post or so back – so I was in the company of other IFPS members from countries such as the US, Canada, South Africa, and Chile.  They were extremely envious and wanted to know how I had managed to get the display put there just for the benefit of the tour!  Much as I would like to think I have that much influence in the global produce industry, I had to come clean and admit that it was all Zespri’s doing.  This image is a wonderful example of New Zealand’s success in the international produce industry.

I have discussed Zespri in previous posts, and say what you like about them (and Turners & Growers have had a lot to say) regarding the single desk position they hold over New Zealand’s kiwifruit exports, but you cannot deny that Zespri is extremely effective at selling kiwifruit for value added prices in the very competitive international market.

Question is, can Zespri’s success be emulated in other New Zealand produce categories without single desk structures and government regulations?

Twitter Sure Focuses The Mind

Zespri Stand at Fruit Logistica Berlin 2011

I sympathise with Turners & Growers.  I truly do.  Here they are, the quintessential New Zealand produce marketer, which in the 1960s probably did more than any other company at the time to turn kiwifruit into the commercial boon the fruit  is  for New Zealand today. But can they sell kiwifruit today?  Nope! Why not? Because of a set of  Parliamentary Regulations which ensure single desk status for what used to be the grower owned marketing company – Zespri.  Well, in a roundabout way anyway.  It is actually a little more complicated than that but I don’t want to open that can of worms right now.

Here is what I wrote on Twitter just now: 

Why do householder surveys on kiwifruit regulation? Zespri is the ultimate scale model, the NZ industry can’t afford not to have it. Period.  

Exactly 140 characters by the way, but I am digressing. I am a free marketer from way back, which is not surprising given my supermarket background; but I mean every letter of that Twitter message.  Turners & Growers have waged quite an effective PR campaign on their opposition to the single desk  model for kiwifruit and some of their arguments do actually make sense.  At the end of the day though, the horticultural industry simply cannot afford to jettison the only scale model it has in order to satisfy free market principles. Sorry guys, but no can do.