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An Interview With Zespri: A Record-Breaking 2021 in China
Zespri, the world’s largest marketer of kiwifruit, recently made an appearance at the Fourth China International Import Expo, which was held in Shanghai on Nov. 5–10. The fruit giant has attended this important event every year since its inception in 2018. Produce Report paid a visit to Zespri’s stand at the expo to take the opportunity to interview Jiang Shijie, Zespri’s general manager for Greater China.
RubyRed, a perfect complement to Zespri’s product line
In April this year, Zespri announced the China market launch of its red-fleshed kiwifruit RubyRed, a cultivar whose breeding program started as early as 18 years ago. As the commercial production of the new cultivar remains fairly small, this launch primarily served as a trial run before the official availability of the fruit next year. To collect market feedback, Zespri chose Tmall and Pagoda as its exclusive online and offline retailers, respectively, for the trial run.
Even though the supply window for the red-fleshed kiwifruit lasts only about eight weeks, the fruit has already met with initial success in China owing to several unique features, including a sweet berry-tinged flavor and striking red flesh. According to Jiang, the repeat purchase rate for RubyRed kiwifruit reached 20% and the average age of consumers who bought this cultivar was five years lower than that for SunGold, Zespri’s yellow-fleshed variety. Despite RubyRed and SunGold falling into the same price range, the flavors of the two are distinctly different. Consequently, the availability of RubyRed is not anticipated to negatively affect the sales of other Zespri products, instead serving as a perfect complement to the company’s existing product line.
It is expected that the volume of RubyRed shipped to the Chinese market will increase by two to three times in 2022 and achieve growth of 10–15 times in 2023. Moreover, in the next 5–10 years, Jiang estimates that sales of RubyRed may reach 30–40% of those for SunGold.
One out of every four SunGold kiwifruit is consumed by a Chinese customer
In recent years, Zespri’s sales in China have maintained a double-digit annual growth rate and this year is no exception. According to Jiang, 2021 has been a record-breaking year, with sales of Zespri’s New Zealand-grown kiwifruit already having exceeded 40 million boxes and 30 million boxes in Greater China and mainland China, respectively, both of which represent new records.
China has become Zespri’s largest market with a 30% share of the company’s worldwide sales. For every four SunGold kiwifruit sold globally, one is consumed by the Chinese market. Zespri estimates that its sales in mainland China will double in the next five years to hit 60–70 million boxes by 2026.
It is widely considered that the core competitiveness of Zespri lies in its brand and products. However, according to data from the company, only 20–25% of Chinese families have bought Zespri kiwifruit in the last 12 months. This market penetration rate indicates that China still holds tremendous potential for Zespri’s further development.
Zespri’s China business is reportedly heavily concentrated in first-tier cities and the Yangtze River Delta and Pearl River Delta regions. Sales from the top 20 cities account for nearly 80% of Zespri’s total sales in China. In the years to come, the kiwifruit giant is expected to extend its business further into China’s lower-tier cities.
Online channels and supply chains, always priorities for Zespri
After years of continued efforts, Zespri has developed a business model in China that takes full advantage of various e-commerce operators to market its products. Approximately 30% of Zespri’s sales in China originate from online channels.
Through thorough studies, Zespri has split e-commerce platforms into traditional ones, online-to-offline (O2O) ones and community group-buying ones so that it can adopt highly customized marketing tactics when dealing with different retailers. Further tapping online channels and optimizing the entire supply chain will become Zespri’s next priorities in China.
Italy is Zespri’s largest producing country in the Northern Hemisphere. Although the production volume in Italy has been rising for years, it is still unable to keep up with China’s ever-growing demand. At the end of the interview, Jiang noted that Zespri will continue to push for improved cooperation with kiwifruit growers in China to better serve the domestic market.
This article was translated from Chinese. Read the original article.
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