"We see a lot of growth potential. Kiwifruit as a category is still only less than 1 percent of the fruit bowl. And in our 15 core markets – that represent about 85 percent of our business – we have less than 25 percent of household penetration. So, we have a lot of headspace," explains Jiunn Shih, Chief Marketing, Innovation & Sustainability Officer with Zespri, on the possibilities the kiwi market has to offer. "We see that good quality, tasty, healthy Zespri kiwifruit is an excellent fit to the consumer trend of wanting more healthy snacks."
© Zespri International Ltd
Zespri grew by more than 30 percent in volume last year, with China and the United States as frontrunners, Jiunn mentions. "But even in our more mature markets, like Europe, we are growing." That includes growth in Switzerland, France, Spain and Germany – the biggest European markets and both in the top 5 markets for Zespri globally, Jiunn remarks. In Eastern Europe, Zespri has a lighter presence. "We haven't particularly focussed on Eastern Europe a lot, so it is a potential for the future." He also sees potential in the UK and in the Nordics, where Zespri has already invested and is present.
Production in Northern Hemisphere
As Zespri aims to have a 12-month supply of Zespri Kiwifruit, it also aims to expand production. "We are on a journey to further expand our production outside of New Zealand, in the Northern Hemisphere." Greece is one of the locations that comes into the picture. "We already procure green kiwifruit from growers in Greece and have been trialing growing SunGold in Greece also. This year, we will start the commercial production of SunGold out of Greece."
That Zespri is looking to expand its SunGold plantings comes as no surprise. Jiunn mentions that where green kiwifruit had the lead over the SunGold variety in the global mix some 7 years ago, this has now shifted to one-third Zespri Green and two-thirds SunGold. Specifically in Europe, he sees a loyal consumer base for green kiwis. "When we started to grow our SunGold kiwi some 9 years ago, cannibalisation, especially in Europe, which was mainly a green kiwi region, was one of our concerns. But we actually see that has not been the case; the household penetration of Zespri Green is still there. Some of the households started to buy both green and gold kiwifruit, and we had a lot of new households buying the SunGold variety. We expanded our reach and penetration with Zespri SunGold."
Breeding programme
Does the growing interest in gold kiwis mean the end for the green ones? Absolutely not, thinks Jiunn. "My belief is that Zespri Green will continue to play a critical part in our portfolio because there are loyal consumers to green kiwifruit, and we want to offer them the best fruit." It is the reason that the green kiwifruit is one of the focus areas in the Zespri breeding programme. "We are working on our breeding programme to try to bring even more exciting green kiwifruit, potentially in the years to come."
Another aspect of that green breeding programme is the changing climate. "One of our focuses is around varieties that are more tolerant to warmer winters with fewer winter chill hours," Jiunn explains that in an ideal situation for the cultivation of kiwifruit in New Zealand, there are a minimum of 900 winter chill hours. "Nowadays there is a lot more variability in winter chill hours, in some winters we are not getting anywhere close to 900 hours and obviously, that affects flowering and bud break. Therefore, we are focussing on varieties that can offer good bud break even with less winter chill."
Sustainable innovation
It is only one of the challenges Zespri is meeting. "We have a lot of different challenges across the industry: the climate is changing, the challenges our growers are facing are changing, and the expectations of consumers are changing too. More than ever, we believe that innovation will be critical for Zespri. And especially sustainable innovation."
It is why Zespri launched ZAG, its 200 million USD annual funding platform bringing existing innovation resources together from across the business. "It is designed to attract innovative problem solvers from around the world who can help address some of the key challenges the industry faces as it meets growing demand for kiwifruit." Jiunn mentions that in the first period of 2025, the focus is primarily on climate technologies.
Pilot project
For instance, one of the pilot projects is about a non-invasive prediction of the maturity of fruit. "It is based on a very sensitive way of detecting volatile compounds that gives a more precise prediction of the maturity of the fruits, which we can then shape into more optimal harvest timings. This technology is being trialled in different areas – like for instance funded by the Gates Foundation for tuberculosis detection – and we are very excited to pilot this as well for potential application in kiwifruit."
© Zespri
Jiunn mentions that the ZAG-fund is closely aligned with Zespri's sustainability programme. The company is developing a science-aligned net-zero roadmap to 2050, with packaging as one of the focal points. "We have already reduced the environmental impact of our packaging with 88 percent being recyclable, compostable or reusable." One of the latest developments is the home compostable label that has been used on all kiwifruits in Europe since this season, Jiunn remarks. "This new label is ahead of the mandatory regulations that are coming in France and Belgium."
Consumer focus on value
Sustainability will also play an important role in the consumer proposition, as Jiunn thinks that value will be increasingly important to consumers. "I fundamentally believe that consumers look for value, and I think that this is why premium brands will survive. If you can justify the premium because of the health benefits that you provide, the consistent good quality, and the environmental perspective, those brands will thrive. The strong brands that can justify their value will actually grow in their share. Just like the commodity low-priced fruits. But everything in the middle – a brand with a little bit of premium that is not justified – will be in trouble," Jiunn concludes.
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