The one-week delay to the New Zealand top-fruit season has had little impact on operations and sources say first arrivals are similar to last year. Royal Gala apples are due to arrive into the Port of Tilbury around 10 April, followed by Cox apples into the Port of Sheerness on 14 April. Other varieties including Braeburn, Jazz and Cripps will follow in May.
The exchange rate and a significantly smaller crop are expected to affect UK sendings and with major producers forecasting shorter supplies, it is going to be an interesting season.
New Zealand’s apple crop is estimated at 264,000 tonnes this season, a 14 per cent drop on last year’s volumes of 308,000t. Braeburn, Royal Gala, Cox Orange and Pacific Beauty production will all fall this season, while Jazz output is forecast to rise by more than 25 per cent.
On the pear front, volumes are forecast to fall by 11 per cent this season. Historically, half of the crop has gone to North America and volumes to the UK are not expected to be significant, sources say.
The drop in output has been blamed on a series of hailstorms and adverse weather in Hawkes Bay and Nelson. A slightly delayed start could also mean better market conditions for new arrivals.
“Being late this year is probably a blessing because it gives a little more time for the sluggish northern hemisphere stock to reduce,” says Peter Beaven, chief executive of Pipfruit New Zealand.
Although Worldwide Fruit (WWF) will handle more fruit this year due to the increased availability of Jazz, commercial director Steve Maxwell says there is “no doubt” that a smaller New Zealand crop will impact on UK supply. “We are working closely with Enza to minimise disruption to supplies but there will be shortages across the board, especially on Cox and Braeburn,” he adds.
DG Fruit will handle similar volumes to last year, although there will be a change in the company’s apple mix. “We will be down on Royal Gala, but will increase in other varieties to compensate,” says managing director Chris Rowe. “Our main volumes have traditionally been Braeburn and Royal Gala, but this year will be a little different - half of our volume will be Braeburn, with the balance split between Cripps, Cox and Royals.”
The company says it has a loyal customer base that specifically wants New Zealand fruit, and it is anticipating normal demand.
New Zealand producers are keen to focus on the quality of this season’s crop. “The fruit quality is great and we need to work with customers in the UK who in turn have consumers who recognise the quality we deliver and are prepared to pay for a consistently good eating apple,” says Brendon Osborn, general manager of Heartland Fruit NZ.
Like other sources, Osborn anticipates challenging times for New Zealand. “This year is shaping up to be extremely tough for our UK programmes,” he tells FPJ. “We have the volume available and there is good demand, but the decisions on actual volume shipped will be based on whether we can achieve the prices required to break even.
“We are going to be very cautious and will enter the market slowly this year, as we try to ascertain the values that can be achieved. Over the past three years, the UK market has been our largest and shown the greatest deliverable growth.”
The biggest impact on Heartland and its UK business will be the depreciating value of the sterling, which has fallen 30 per cent against the New Zealand dollar over the last year, and whether it will be able to achieve the increased sales prices that are required from UK customers.
“We need sales prices to increase by a similar amount to put us on the same returns as last year, which were just below break even,” says Osborn. “If prices are at the same level as in 2009, then it is not worth us shipping the fruit. We lose less money by leaving the fruit here in New Zealand.”
Maxwell says the impact of the exchange rate cannot be underestimated. “Getting the correct volume of loose size fruit will be difficult, as continental Europe looks like being able to pay more than the UK,” he says. “We’re lucky that we have long-term partners with a long-term view, but there will be fruit originally consigned for the UK that is diverted to other markets.”
DG Fruit says price expectation is a lot higher this year in sterling terms due to the currency being weaker, compounded by volume reduction from New Zealand, South Africa and South America. “Matching customer and supplier price expectation will be the only hard part of the season,” Rowe says.
Beaven anticipates a decline in exports to the UK during this campaign. “For several years now, our growers have really struggled to get a sustainable return from supplies to the UK and this is why Cox production in New Zealand has reduced to the point where it is at its lowest in 40 years,” he says.
“It is a great shame because we have long-standing historical relationships, both political and economic, with the UK and we don’t compete with the UK’s domestic apple industry.”
Despite the challenges, marketers are confident that New Zealand’s wide range of apple varieties will continue to score a hit in the UK.
“Jazz sales are growing month on month and we are very lucky to have this variety in our portfolio, as it is delivering for our consumers and giving them fantastic-quality fruit consistently, and it is delivering for our customers by increasing sales,” Maxwell tells FPJ. “Jazz is on target to be over three per cent of the apple market this year and will grow further.”
Maxwell is confident that Jazz still has the potential to grow substantially and could become as big a variety as Pink Lady. WWF will showcase New Zealand Jazz at this year’s Taste of London show in June, as well as other food-sampling events. “We find that this goes down a storm with consumers,” Maxwell says.
Beaven says Jazz is a fantastic variety for anyone who wants a crunchy, tasty apple. New Zealand forecasts a significant rise in the supply of Jazz over the next few years, as the 900 hectares planted in the country come into production. “Jazz deserves a premium price and prominent position on UK supermarket shelves,” Beaven says.
WWF also has high hopes for Envy, the latest launch from the Enza stable. “This variety is very pretty and very sweet and we will also see samples of T17 this season, so it will be interesting to gauge customer and consumer reactions,” Maxwell explains.
Other new varieties such as Lady in Red, Kanzi, Tentation and Sonja are in the early stages of planting.
Beaven is also keen to keep the spotlight on Braeburn. “It is important for us to differentiate New Zealand Braeburn from other origins so that UK consumers know they are getting premium quality,” he says.
Osborn says there are many new varieties being launched globally and most are very good apples. However, they all require significant marketing and promotional investment to make the consumer aware and educated about the variety.
He says that Pink Lady has been a success and has had a lot of money spent on promoting it. “Pink Lady also has a natural visual advantage in that it obtained shelf space by being visually different - pink. The worry is that most new varieties launched to date are bi-coloured and therefore are going to require sharp marketing to get the consumer to buy them for the first time,” Osborn explains.
Heartland has a couple of new varieties that have potential opportunity for the UK market. Some are disease-resistant varieties that have undergone fewer chemical applications and also require fewer energy inputs to grow, therefore having a potentially lower carbon footprint on the orchard. These varieties will be launched this year with the main focus on the US and Asian markets, although there is also the potential to promote them in the UK.
“These varieties will also require significant promotional funding from us to make people aware of them and the benefits of eating them,” Osborn says. “We are prepared to do this and also work with customers that can see value in working together on these varieties.”
The Apple Futures programme that targets zero-residue production is also promoting New Zealand’s profile as a “clean and green” choice. “This is a fantastic programme and can generate real resonance with UK consumers,” Maxwell says.
New Zealand may ship fewer loads this season, but it will also face less competition from some southern hemisphere competitors.
Intense heat has taken a toll on South Africa’s apple crop, with estimates now just short of 23m cartons, a 14 per cent drop on last year’s crop. Gala and Golden Delicious have been particularly affected.
A question mark also hangs over Chilean top-fruit volumes, following the devastating earthquakes of February and March. Sources report fruit on the ground and infrastructure challenges, including difficulty in accessing some ports.
Insiders are certainly anticipating changes this season. “We’re confident that we have the correct partners across the southern hemisphere to deliver great-quality fruit for our customers, but I do think this will be a summer that sees very little promotional activity and there could be gaps in supply,” Maxwell says.
When asked what UK importers could do to help support the sector, Maxwell says that the industry needs to ensure that there are efficient supply chains, as money needs to go back into growers’ pockets to enable them to invest for the future.
“Our biggest challenge is the same as with every imported product - we are competing now in a truly global market and if we can’t match our competitors, we will see reduced quantities,” Rowe says. “For New Zealand specifically, it is the same issues year in, year out - distance and costs. With no price increases for fruit, the increased shipping and production costs eat into the growers’ pocket.”
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