Monday, April 22, 2024

China boosts Zespri’s online sales

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Chinese consumers have taken to online food ordering with a vengeance, and Zespri says there is no sign that it is going to slow any time soon.
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Speaking at Mystery Creek, chief executive Dan Mathieson says after selling about 17% of fruit online in China in 2019, that lifted to 25% last year over the covid lockdown, and this year is on track to almost a third of Chinese sales.

“There has been this real acceleration of consumers buying trusted brands online, and returning to buy them regularly,” Mathieson said.

Expectations are that by 2030 online sales in China will constitute 50% of total sales in a market that is highly tech savvy, and with rapidly improving supply chain infrastructure that can deliver perishable products.

“Obviously with covid, consumers spent more time at home indoors, and were seeking out high-quality, health-giving snack items,” he said.

With China comprising about 30% of Zespri’s sales, last year marked the first time kiwifruit pipped the south-east Asian fruit durian as the most imported fruit. Durian has gained a huge reputation in China, despite being known for its strong smell.

Mathieson says prospects were positive and growing in other emerging Asian markets, including India and Vietnam. India’s potential was becoming more of a reality as the country improved its coolstore infrastructure, but the 30% tariff on imported fruit remained a significant hurdle to overcome. Sales in the respective countries were a modest 1.5 million and three million last year.

The United States continues to grow as a market that is familiar with kiwifruit, and benefitting from greater Zespri investment in offices and staff on the ground there.

The company achieved a 47% increase in sales through 2020, selling 8.5 million trays through its “Taste it to believe it” 360 degree marketing campaign.

He says early indications for the red variety’s first full commercial season are proving positive.

“We are enjoying a particularly strong appeal to children, which in turn opens them up to the entire fruit range, effectively securing our future consumers,” he said.

The fruit marketer reported a record lift in profit and fruit volumes for the 2020-21 season, reporting record global operating revenue of $3.89 billion, from global fruit sales accounting for $3.58b. This accompanied a lift in profit of 45% to $290.5 million.

Mathieson says by far the most significant headwind the sector faced is labour supply.

“As an industry we have proven our efforts in employing local people, paying the living wage as a minimum,” he said.

The longer-term vision is for greater orchard automation, but this remains several years away and would remain only part of the answer.

“We also rely upon a steady flow of migrant workers coming in, and need to see that pool of RSE workers protected,” he said.

He says the sector continued to work closely with the Government, with a constrained labour supply likely to compromise the quality of fruit in future.

“Our post-harvest processors say they have never had it so tough,” he said.

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