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Performance / June 7, 2018

Zespri NZKGI Scorecard 2017 season

Zespri management have prepared and submitted to NZKGI a 2017 season scorecard of 10 key metrics.  The scorecard indicates that the 2017 season began relatively late and resulted in a challenging supply constrained season, particularly for Green.  Weather, temperature and sunshine hours impacted dry matter accumulation, slowing down clearances and harvest, and contributing to a significantly larger size profile.  The 2017 season crop volume reduced to 65million trays compared to a record crop of 91 million trays in the 2016 season.  The reduction in supply impacted Zespri’s ability to meet customer expectations on sales programmes, but Zespri were able to extract value from a lower volume.  Key highlights of the scorecard include:

  • Fruit loss
    • Onshore fruit loss for all varieties showed an improvement in 2017.  For Green varieties this was in part due to the reduced crop.
    • Offshore fruit loss was lower across the Green, Gold and Green Organic pools for the 2017 season compared to the 2016 season.  By market, Europe saw lower offshore fruit loss for Green and Green Organic in 2017 due mainly to lower total volume and less volume being sold in the latter part of the season.  Offshore fruit loss for Gold however remained stable.  Japan had a later start to Green and saw more volume later in the year than in the previous season, resulting in higher fruit loss rates late in the season.
    • Offshore fruit loss was higher for the Green 14 pool for the 2017 season compared to the 2016 season, due predominantly to staining and over-ripe fruit, particularly in Japan.
  • Market Performance
    • Despite the supply constrained season, many markets managed to deliver improved value through aggressive pricing as well as brand performance.
    • The wholesale price premium achieved in market for Green improved in the 2017 season in Japan, Korea, and China but reduced in North America and Europe.  In North America Zespri Green supply was short and both Italian and Chilean fruit were able to sell through earlier.  In Europe an increase in price of Zespri Green was followed by an increase in the price of Chile Green, with the proportion in price differential reducing as a percentage of the average sales price.
    • Brand Awareness in Zespri’s top 10 markets increased 6% in the 2017 season compared to the previous season, while awareness in the rest of the world increased by 8%.
  • Shipped and Sales Volume
    • Europe and Japan are importer of record markets that hold in-market inventory with customers being invoiced at a point in time after the fruit arrival in market.  Europe invoices on delivery to the customer and sales typically lag at least 4 weeks behind shipping with inventory building towards week 40 as the last ships arrive.  Japan invoices on order (rather than on delivery to the customer) and therefore there is a smaller lag between shipped and sold volumes.
  • Returns per TE versus volume sold
    • Despite the significant drop in yield for Green across all markets in 2017, additional value was captured via strong pricing, particularly in Europe.  Due to very strong demand for SunGold, pricing overall was able to be improved notwithstanding an 18% increase in supply.

To view the scorecard, click here