You've now unveiled the three new varieties. How does the process of licencing them proceed from this point onwards?
What we are doing as of now is that we’ve started communicating about the new varieties and working with growers. As a grower you have to graft – for most of these new varieties they will cut the head off Hayward vines and graft onto them. There’s a certain window of time for that in July/August, and you can’t do it any later. Growers will tender for licences over the next two to three weeks.
We’ll release 200ha initially for each variety. We want to get these varieties to the market as quickly as we can, but we’re still on a learning curve. In a sense, these are pretty modest initial commercial plantings. One of the reasons we’re doing that, as an example, is that we’d like to see a couple more years of yield information for the sweet green before we ramp up plantings. Similarly, storage performance of the long-storing gold.
We’re comfortable we can manage the risks in any new cultivar, and we’re doing that with relatively modest new plantations. We will do further plantings depending on the varieties’ market and orchard performance. We’ll only really learn about them `in the market`. We’re still learning about Gold; the learning curve only just started to flatten after 10 years. So it’s a matter of balancing wanting to get to market quickly and acknowledging that learning curve.
You’re referring to Green14 as a ‘sweet green’ – does that mean you’ve decided you won’t push it as an early variety?
It is early - we think it’s at least two to three weeks earlier than Hayward. But consumers get Hayward 12 months a year anyway. Being early is more of a trade benefit than a consumer benefit. For consumers, it’s not as tart as Hayward, so we’re calling it sweet because that’s what we think is important to consumers.
In any new kiwifruit season, there is a propensity for green kiwifruit to be hard and sour to start with. That will give us a significant advantage, because Green14 is sweet and easy to eat `early in the season`.
The storage life is not as good as Hayward; it’s more like Zespri Gold. We think it will make a significant impact on the category, particularly in the first half of the green season.
Will it supplant early Hayward?
We can’t say it’s the same. It simply isn’t as tart. Some consumers won’t accept it as a replacement. Some others won’t eat early Hayward because it’s too tart. We believe it will appeal to some new consumers, and certainly appeal to some Hayward consumers. One of the things that will be very interesting is to fully understand its positioning and relation to Hayward in terms of cannibalisation of sales, which is something we won’t understand for some years to come.
We think it will go alongside Zespri Hayward, and we will see an emerging consumer and trade choice between them, which we will only realise in time. But it is a fantastic option to present consumers and the trade alongside early-season Hayward.
Which markets in particular are you looking at for the sweet green?
We think it will appeal particularly to Asian consumers, so markets like Japan, Taiwan, China. In Europe, we think it will appeal particularly in the south.
We’ll wait and see. One of fascinating things is that people often come out with new varieties of something and tell people where the product will work, but `we think that` the consumers will tell us that. What the product uptake is like will be fascinating to find out.
You announced Gold9 as ‘potentially’ long-storing. Why that disclaimer?
The thing about storage is you have a softening curve, but what tends to bite you is that the fruit runs into various disorders. That could be things like rots, and with Gold it’s beak-end softening. That gets you before the softening curve.
So we think it’s a long-storage cultivar, but there’s a big learning curve still. We want to see a couple more years of storage information before we do big plantings.
The first bottleneck we’ve discovered for Gold9 is its propensity to shrivel, which has to do with the permeability of the skin. So we’re looking at `things like` humidity levelss in storage. On one hand, it’s fantastically exciting, but there are years of steep learning ahead. That’s the way new varieties go.
One of the things here is that we’re regulated, so we’re declaring all of the risks up front – there’s a new variety information guide growers will get next Monday. That contains essentially all the information we know about the new varieties.
You say the late gold may push through to spring – can you give a specific week or month for that?
We would have thought eight to 10 weeks on top of Hort16a, which can bridge the selling seasons; we generally sell out of gold before the Northern Hemisphere season. Provided the storage life is what we think it is, we should get a 12 month supply of Gold.
You’ve said the early gold will give you an extra three weeks, and this late gold will give you eight to 10. Do you think that means there will eventually be more production of the late gold than the early?
Absolutely. Obviously the volume opportunities are related to the number of sales weeks the varieties give us. On the face of it, the long-storing gold is a bigger commercial opportunity.
What is the annual growth rate of Zespri Gold currently? Is there any change expected to that from the new varieties?
Zespri’s total annual growth is 9.8 per cent. In gold, we’re at 21m trays now, and in the next two years we’ll be at 30m trays, so that’s 50 per cent growth in two years.
Obviously the new golds will offer growth in the current window, but what they will do is provide opportunities to fill shelves earlier and later. So we’ll be growing early and late as well. If the storage performance is what we think, we’ll go from 30m to 50m trays without any `further` growth in our current window, which we will definitely get. That’s tremendous growth.
What were the results of your consumer testing in Japan, Europe and New Zealand?
We did sensory testing particularly in Germany and Japan. We’ve been sensory testing there in the last two years, and it’s quite extensive – over 1,500 consumers. It’s been very scientifically done. As you would expect there are some differences between countries – Asian consumers typically have a sweeter palate than Europeans.
We’re going for all three `new varieties` because the sensory testing performance of all three is very strong.
We didn’t see a big difference in the appearance. The visual aspect will not sell these products, it’s all about the flavour. We thought consumers would differentiate on the beak `between Hort16A and the new golds`, but it seems for many consumers they look very similar, while they do pick up distinctions in flavour.
The strategy behind these golds is to extend the Zespri Gold window. Both of these new golds are acceptable compared to Hort16A; people like them comparatively. We think they both work in that regard, and we don’t think consumers will make strong distinctions between them. That said, the sensory testing of Gold9 was very strong.
Will these new varieties enter the Australian market as Zespri branded, class 1 fruit like Zespri Gold?
Yes, like Zespri Gold; they’re licensed varieties. Gold has gone very well for us in Australia. There’s certainly more growth there.
You also have two new red varieties going into commercial block trials. Can you tell me about those?
One is what I call a ‘yellow’ red; it’s a red centre in a yellow-fleshed fruit. The other is a red centre, almost a boysenberry-coloured core, in a pink fruit. Both taste tremendous, and the storage potential looks OK. We’re putting them in growers’ hands now, and there’s only a total of 12ha planted.
Traditionally the challenge with red varieties has been low yield, small fruit and low shelf life. They’re very attractive to consumers, but they’re not a commercial product.
So we have two of them now that we’re putting into commercial block trials. The commercial release won’t come before 2012. Now we’re looking at the yield, doing sensory work, and learning about the storage. It’s early days, but it’s exciting, and we’re delighted we have a couple of serious red varieties. The thing about red kiwifruit that is so exciting is that it’s genuine category growth – new shelf space and consumers.