Zespri turned over NZ$3.36 billion and achieved a net profit of NZ$200.8 million in the financial year to end March 2020Iain MacIntyre discusses the Zespri kiwifruit marketing cooperative supply strategy for delivering over five billion pieces of kiwifruit in 2019-20 and progress made this year in spite of COVID-19.
Close relationships with selected ports, securing availability of tailored wharfside infrastructure and carefully balancing use of conventional reefer vessel charters and container line services are pivotal to the ongoing trade success of Zespri International.
Headquartered in Mount Maunganui (New Zealand), the world’s largest marketer of kiwifruit works with about 2800 local and 1500 international growers and post-harvest firms to distribute kiwifruit to over 50 countries around the world.
Mike Knowles, Shipping Manager, Zespri, underlines the brand has become established as, “The world’s leading provider of premium kiwifruit.”
“This season,” he explains, “We are expecting a crop of around 155 million trays (or around 600,000 tonnes) and we’ll again be supplying more Zespri SunGold than Zespri Green Kiwifruit.”
Exporting about 90 per cent of the total premium kiwifruit grown in New Zealand, Zespri’s main markets are greater China, Japan, Spain, Portugal, Germany and Korea Knowles says maintaining strong working relationships with the Port of Tauranga and other ports around the world is a key factor in global supply chain efficiency. Such partnerships ensure Zespri has ready access to essential wharfside infrastructure.
“As our kiwifruit is a perishable product, we require cool stores to at the ports in which we discharge our fruit. The Port of Tauranga, where around 80 per cent of our kiwifruit is shipped from, has a dedicated cool store for the kiwifruit industry, as well as the Port of Zeebrugge. There are also cool store facilities at our terminals in Japan, Spain and Italy."
In recognition of the trade’s importance to its business, the Port of Tauranga opened its NZ$11 million purpose-built cool store at Mount Maunganui to replace a 48-year-old facility in November 2017. Developed in close liaison with the sector, it has been leased for 15 years to Tauranga Kiwifruit Logistics which handles kiwifruit to the point of export. It covers 4200 square metres, can accommodate about 5200 pallets of kiwifruit and features advanced energy saving characteristics.
“At the Port of Tauranga,” says Knowles, “We hire the cool store for 12 months of the year, although we do rent it out to other users when New Zealand moves to the resource of the global supply of kiwifruit.”
“Our Northern Hemisphere growers,” he elaborates further. “Supply fruit to consumers in our global markets at the end of the New Zealand season (for the three months when New Zealand-grown fruit is unavailable). In other ports around the world, due to the seasonal nature of supplying perishable products, facilities like cool stores are hired short term and are shared with other goods for the remainder of the year."
60: 40 CONTAINER/REEFER SPLIT
Influenced by such factors as geographic destination, seasonality and relative cost, Zespri splits its New Zealand exports about 60/40 in favour of regular container line services over chartered reefer vessels, in another key element of its supply chain strategy.
“Our goal is to get our fruit to the market and safely delivered to customers and consumers as quickly as possible. There are a number of advantages in having our own services going direct to the markets, including faster transit times and we can better control the conditioning of our fruit onboard,” says Knowles.
Commenting on recent performance, Knowles emphasises that New Zealand’s kiwifruit industry has worked “incredibly hard” in the face of the challenges posed by COVID-19 to safely pick, pack and ship fruit to market".
He added: “The supply chain adapted and collaborated to make sure growers and postharvest operators had the support they required to pick and pack kiwifruit under the stricter hygiene and additional safety protocols put in place.”
As of late June, 30 of the 50 charter vessels scheduled for the season as well as over 16,000 containers had been loaded for Zespri. Interestingly, Knowles notes that Zespri had previously developed, and “more importantly, practiced” a business recovery plan for events such as the global pandemic.
“Control and certainty over shipping,” he underlines, “is an important strategic asset, and we were able to achieve this through the relationships we have with our shipping partners. We increased our charter programme and bypassed congested ports to discharge fruit.”
And he notes: “Our carriers all comply with the new IMO 2020 regulations requiring the use of low-sulphur fuels and it is important to us that we play our part in sustainability and looking after our environment. The long-term financial impacts have been factored into our budgets and support our sustainability objectives.”
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August 15, 2020 at 12:43AM
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