topfruit production in New Zealand’s Hawke’s Bay came under threat last week as heavy storms hit the area. Hail fell in a 90-minute period, punctuated by bursts of lightening that cut power supplies, but despite the ferocity of the weather, early reports suggest that less than five per cent of the Hawke’s Bay crop was affected, owing to the fact that hail fell mainly over residential areas.
“The hail in Hawke’s Bay came very late in the season, and was mainly around Napier, whereas the Hastings area was left unharmed,” says Alex Schenz, European export manager at Applemax. “The major part of our orchards had already been harvested so initial inspections suggest that the impact could be very minimal in terms of total volume.”
“A lot of the fruit had already been picked so the situation could have been much worse. Royal Gala, for instance, has been harvested for at least three weeks now, and we are well into the Braeburn harvest,” says John Thompson, export manager at Fresh New Zealand.
It is not the first time that New Zealand’s topfruit production has suffered the ill effects of bad weather. 2002-2003 saw spring frosts in Hawke’s Bay, while the Nelson region suffered from hail culminating in low yields and an excess of small fruit. This year, despite escaping from the worst effects of hail damage, New Zealand did suffer a wet February and that has caused some problems with early varieties and the first pick of Royal Gala. “Rain at that time can generally be tolerated, it was the volume that fell leading up to the commencement of the harvest that was the problem,” says Thompson. “Apart from that the season has been good and that is reflected in the quality of the fruit. The Braeburn crop, for example, is stunning.”
“It has been a decent growing season although generally quite wet,” says Empire World Trade’s David Pratt. “However we’ve had the first arrivals of Cox in and they are looking very good and Gala will come on stream next.”
According to Thompson, overall the crop is larger than last year but Royal Gala will be slightly down in numbers and also down on volumes destined for the UK. “This is due to the extremely good size profile in comparison with 2003 and means that a lot more fruit will be going to the markets that want larger fruit such as Canada and the US. Fuji and Braeburn crops are very much up on last year in terms of size profile and volume, and early indications are that the packouts are also better than 2003. The Braeburn quality is the best we have seen for years, and the Fuji crop is far superior to last year,” he says.
According to Schenz, the industry’s forecast for the New Zealand crop in December and January were over estimates. “Within our own orchards Applemax was applying various orchard management techniques such as heavy thinning to increase the average fruit size, which worked successfully to improve marketing opportunities,” he says, “however this reduced overall cartons per hectare.”
This year Fresh NZ has the first pick of Fuji Supreme, a controlled variety that it believes is superior in colour and also gives a much higher overall packout of high colour fruit per tree. Expectations are high for this variety and Thompson believes it will be a real success for growers who take it up.
Current concerns are for growers getting the crop off the trees. “There is not a lot of slack in the system,” says Thompson, “but the feared casual labour shortage has not really eventuated and things are moving along quite smoothly.”
One ongoing logistical difficulty is shipping and that will really start to bite when the bulk of Braeburn enters the packing sheds and cold storage runs out. “The real crunch here, will be to get the fruit packed and stored properly and on to a vessel to Europe and the UK in the quickest possible time,” says Thompson. “With such a crop I also believe that field bins as well as coldstorage will quickly become issues after Easter.”
Big crops always result in logistical challenges, and the shortage of reefer capacity, conventional and containers has been discussed widely in the last three months. “Increased administrative and documentary requirements have also raised the necessary expertise for exporters to comply,” says Schenz. “This season Applemax has not suffered from any of these problems so far, as all shipping requirements were responded to and fruit shipped as scheduled.”
DM Palmer exports 50 per cent of its organic apples to the UK along with conventional crop. “Fruit quality is generally good,” says the company’s David Mitchell, “and expectations now are for a similar total volume out of New Zealand as last year - around 18-18.5 million cartons. Logistically the industry is working quite well although now that harvesting and packing are in full swing it will put some pressure on shipping. The UK remains a market that is fundamentally important to New Zealand because of its ability to move small fruit count sizes but the difficulty we now have is competition from South America, especially Brazil which produces good volumes of good quality small-sized Royal Gala although New Zealand does still has an international advantage with its Braeburn apple.”
Competition is a point on which everyone seems to agree and Pratt points out that strong sendings from Brazil will undoubtedly undermine the New Zealand apple industry this year.
“The main competition for New Zealand fruit is other southern hemisphere suppliers which in some cases overlap, but New Zealand as a supply nation does have its own market segment and in the case of Braeburn that is clearly defined,” says Thompson. “I suppose in a large season we could regard the potential competition of the first northern hemisphere crops as serious potential competition as we aim to tidy up our remaining volumes in the market.”
Traditionally, the UK market is an integral destination for any exporter looking to export fruit globally, but, says Schenz, the present situation on European and UK markets being filled with record volume of other southern hemisphere fruit, raise concerns of whether that fruit will actually be sold before the main load of New Zealand quality fruit arrives.
“Since deregulation in 2001, Applemax established itself in the traditional markets, and has also been successful in exploring new opportunities. This has been achieved in Asia, and together with our European partners, are looking forward to the EU enlargement mid-term. Closer to home we follow the opportunities that will arise by the expected opening of the Australian market for apples.”
Fresh NZ is not looking to supply any new markets this year, preferring instead to consolidate its position in the key markets of Europe, Ireland, the UK, Canada, the US and the Pacific Islands. Although the UK market remains vital for New Zealand topfruit producers, Fresh NZ is trying not to overload the market and has set itself optimum levels it does not want to exceed as far as percentages are concerned.
“We have discussed our plans with our suppliers and the rationale behind what we are trying to do. Unlike other companies, we target three different markets within the European Union and do not regard them as one. Our tactic is to look at the UK, Ireland and continental Europe as separate markets and not to broadbase our plans. Instead, we aim to target each of these markets individually,” says Thompson.
The market for organic apples continues to grow, although the scale of growth has slowed dramatically. “The UK supermarkets do all have a requirement for organic apples,” says Mitchell. “We work very closely with the supermarkets on an individual basis to understand their requirements and deliver programmed fruit on a just-in-time weekly basis. On the other side the conversion of apples to organic has slowed also and in another two years, with continued slow growth in demand and almost no growth in supply we would expect to see an improvement in market returns to the grower.”
Conversely, a major area of concern for Fresh NZ has been the decline in support for New Zealand Royal Gala by UK supermarkets. “I believe that we are to blame for this, as we have not been listening to concerns as they have been raised,” says Thompson. “Predominately the issues have been around the lack of taste in New Zealand Royal Gala when compared to our competitors, most notably Chile.
Fresh NZ believes that this is a growing issue and that it all starts in the orchard, so this year we have put together a trial that includes advice from Hort Research (Government funded scientific and research body) and starts at the orchard. We have called it the taste enhancement trial and we hope to deliver to Waitrose New Zealand Royal Gala that will exceed taste expectations, and to give Waitrose shoppers a tasty New Zealand Royal Gala that will bring back consumer preference for New Zealand Royal Gala.”
Topfruit as a category is also competing at the consumer level with other fruit more readily available in the European summer,” says Schenz, “however with continued efforts in maintaining high quality standards, New Zealand fruit will keep its position in the global market.”
Ultimately, says Hart & Friedmann’s Tom Fleming, New Zealand fruit is enjoyable to sell. “It is a good source that provides good quality fruit. Everything else is an imitation.”
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