According to Stats NZ, meat and seafood exports to China have been severely hit, down almost 40% from 2019 due to the coronavirus outbreak.
But Ivan Kinsella, head of corporate affairs at Zespri China, told FoodNavigator-Asia: “We’re seeing strong demand in our key markets for fresh, healthy fruit like kiwifruit and our first vessels have departed for Asia (Japan) and China as planned.”
Coronavirus impact
Kinsella explained that: “While there are ongoing challenges, all ports in Japan, Korea and Europe are functioning and have labour available, as is the terminal we’re using in China. We are continuing to plan for a range of contingencies,
@We’re pleased to see things stabilising in China and the improvement in consumer metrics.”
The New Zealand Government had recently responded to the outbreak by closing all non-essential businesses to help minimise the spread.
However, Zespri assured: “As a food producer, our supply chain is classified by the New Zealand Government as an essential service, and will continue to operate under strict Government guidelines and with enhanced hygiene practices in place.”
First China online retailer
According to Kinsella, many consumers’ purchasing behaviours will shift from offline to online during this period.
Recently, Chinese e-commerce giant JD.com signed a contract with Zespri to become China’s first online retailer to supply Zespri kiwifruit from the brand directly to consumers.
Previously, Zespri had a flagship store on JD since 2017, but supply was managed through distributors. In 2019, sales of the company’s kiwifruit on JD exceeded RMB 200 million (USD 28 million) in November.
According to Kinsella the new arrangement will shorten supply chain process, offer more efficient services, and better ensure the efficiency of customer services.
As part of the agreement, JD’s online and offline fresh food businesses, JD Fresh and 7FRESH, will procure over 1.2 million trays (3.3 kg per tray) of Zespri’s kiwifruit from New Zealand this year. With the renewed contract, Zespri’s sales on JD are expected to exceed RMB 300 million (USD 42 million) annually.
This year’s first Zespri kiwifruit harvest which includes SunGold, Green, and Organic SunGold Kiwifruit will begin selling on JD in April.
According to JD’s data, kiwifruits are especially popular with middle class consumers who are focused on health and nutrition.
In addition, JD observed that sales of Zespri in 4th to 6th tier cities increased 46% year-on-year.
Stop kiwi-around
Earlier this year, Zespri was granted key trademark protection status in China, as it faces counterfeiting of its SunGold variety, including unauthorised growing.
Kinsella explained: “Zespri invests heavily in protecting our Plant Variety Rights and has a zero tolerance attitude towards counterfeit fruit. Becoming the first New Zealand company and first fruit brand to be granted Key Trademark Protection Status offers us greater protection against trademark infringements and the counterfeiting challenges we’re facing in China.”
The firm is now working with the Plant & Food Research in New Zealand to develop a new DNA fingerprinting tool to allow quick and efficient identification of kiwifruit varieties. Kinsella added, “[we] were pleased at the successful outcome of legal action we took in New Zealand against a former grower who took our protected plant material to China.”