Why export customers are concerned about New Zealand’s new red kiwifruit

Zespri commercialised the RubyRed variety in 2019. Photo / Alan Gibson

New Zealand’s new red kiwifruit need to be bigger to convince consumers to keep paying a premium price, says global marketer Zespri after identifying market concern about the high level of very small fruit in our export offering.

In its new five-year outlook for the $4 billion-plus industry, Zespri said the 1.5 million trays of its RubyRed branded fruit delivered this year were well received by Asian and New Zealand markets but a high proportion of very small-sized fruit was a “top concern” raised in customer and consumer feedback.

After a review, Zespri would not be releasing any growing licences for RubyRed in 2025 “while we continue to learn and innovate with fruit size, yield and colour; to grow consumer awareness in the markets and have the benefit of another season’s assessment of the commercial viability of other red varieties in the innovation pipeline”.

“The need to continue learning on red means that further licence release from 2025-2029 is yet to be confirmed.”

To date, 912 hectares of RubyRed licence had been released.

Zespri said customer and consumer concern about the high proportion of very small-sized fruit had been particularly evident in China, a market known to attract significant premiums for larger fruit. In that market, Zespri SunGold, being over 80% of the volume sold by Zespri there, set a strong reference point.

“Consumer research has validated small-sized fruit as being perceived as less premium, and this could have a potential long-term detrimental effect on the brand. It is important to stabilise a consistent, larger-sized offering that supports the premium proposition and pricing that RubyRed has been able to enjoy this far,” said Zespri, which commercialised the variety in 2019.

Markets for RubyRed are Japan, China, Singapore, Taiwan and New Zealand, with new markets this year of Korea, Hong Kong and Malaysia.

Zespri said the red kiwifruit category is small in the global kiwifruit market, but growing.

China produced 833 million trays of all kiwifruit varieties a year and red fruit represented just around 1% of this volume.

In Europe, it was estimated red kiwifruit plantations represent 1% of total kiwifruit planted.

“Red appeals to producers partly because of its price. In China, retail prices can reach a premium of up to 150% over local gold kiwifruit. Italian red kiwifruit, sold mostly in Europe, achieved in 2023 an average retail price of 14% above a SunGold [Zespri’s gold fruit brand] pre-pack.”

Zespri, which has the regulatory authority to export all New Zealand kiwifruit, except to Australia, said branded kiwifruit players were presenting a full portfolio of kiwifruit to retailers and consumers to secure greater brand recognition. Red kiwifruit was part of their effort.

Innovation in the red fruit category, both in optimising the current Red19 variety and developing new and better varieties of red fruit, remained a top priority, the Mount Maunganui-headquartered company said.

Top-selling SunGold variety has set a size standard that's proving hard for RubyRed to match.

“Our innovation programmes, both through storage technology and new cultivars, are addressing the challenge, including, but not limited to, extending the selling window.”

A new red cultivar was in stage three trials and had so far shown good potential to complement the current variety. Red19 stage three trials were also under way in Italy to assess the cultivar performance and its commercial viability. Zespri hoped this work would enable the fruit to be in the market longer and reach more markets in the next few years.

As with Zespri’s best-seller SunGold, growers must pay for a licence to grow RubyRed. Commercial volumes began in 2022 with 126,000 trays sold in the Asia Pacific and Greater China regions.

Zespri anticipated RubyRed volumes to rise up to eight million trays by 2034, with the aim of achieving a 15% orchard gate return premium over SunGold fruit in respective markets the red fruit is sold in, assuming innovation and growing practices help reduce its small-size profile.

The company expected to supply around 7.8 million trays of RubyRed to markets by 2029-2030 and to open new markets for the variety in this time, including Indonesia and Vietnam.

“However, we’re constrained due to the shorter shelf life of this product and we need to serve markets closer to production.”

Looking ahead to potential returns for growers, Zespri said forecasts could be indicative only, due to the “high level of uncertainty still associated with this variety while we build towards commercial volumes”.

Orchard gate return (OGR) per hectare was dependent on orchard yield, and it was expected to take growers differing times to achieve full production.

“For example, assuming an orchardist who grafted in 2022 to RubyRed can achieve a full crop at an average of around 9000 trays per hectare by 2025, then an OGR per hectare of between $103,000 and $149,000 is forecast.”

For context, Zespri’s OGR range per hectare forecast for green fruit for 2025-2029 is between $74,000 and $95,000.

For SunGold, modelling suggested average OGR/ha returns could be sustained between $150,000 to $196,000 over the five-year timeframe, on volumes growing to 153 million trays in 2029-2030.

Zespri said as always, modelling is based on several assumptions, and is dependent on seasonal factors, such as volume, taste, quality, and market conditions, and on broader factors such as biosecurity, competition, and market access.

Andrea Fox joined the Herald as a senior business journalist in 2018 and specialises in writing about the $26 billion dairy industry, agribusiness, exporting and the logistics sector and supply chains.