\u201cOpportunity-wise, we\u2019re looking at 1.4 billion people and, if you even just met 5% of that market, you\u2019re talking about 70 or 80 million people. So there\u2019s big opportunity in terms of being able to grow India to our fifth biggest market after Europe, China, Japan and the US.<\/p>\n
\u201cIt\u2019s probably a 10-year journey to get there, it\u2019s not going to be immediate.\u201d<\/p>\n
The FTA removes the 33% tariff on up to 15,000 tonnes of kiwifruit per year, with all volume on top of that subject to a reduced tariff of 16.5%.<\/p>\n
Zespri sales into India have been heavily constrained by the tariff that cost New Zealand growers $9m on $27m of sales last season.<\/p>\n
Zespri sold around 7200 tonnes into India this year \u2013 50% SunGold variety and 50% green or Hayward fruit. Te Brake expects that volume to more than double in five years and SunGold to make up 70%-75% of shipments.<\/p>\n
The marketer, which has the statutory right to export all New Zealand kiwifruit except to Australia, also has contracted growers in other countries, and achieved global sales nudging $6 billion last season. New Zealand fruit sales earned $3.5b of this.<\/p>\n
Te Brake says the company is not currently planning to source or procure fruit from growers in India.<\/p>\n
\u201cThere are a few concerns around IP protection and until we had comfort around that we wouldn\u2019t be looking at that.<\/p>\n
\u201cFor us it\u2019s more around the investment we\u2019d make around stronger marketing, building more demand and more long-term partnerships with some of our distribution partners so they can get a stronger cool chain infrastructure.<\/p>\n
\u201cIt gives us more certainty to invest for building demand and supply chain infrastructure that will give us a better quality in the market.\u201d<\/p>\n
Protecting Zespri\u2019s intellectual property will require government-to-government discussions to enforce and control plant variety rights, he says.<\/p>\n
Serious issues with rogue growing of Zespri-developed fruit in China have been easing with stricter enforcement of plant variety rights by officials there.<\/p>\n
\u201cWe would want to see similar movements by India in the future to give us comfort.\u201d<\/p>\n
Te Brake says there\u2019s already quite strong brand recognition of Zespri in the Indian market.<\/p>\n
\u201cPeople have an affinity for Zespri and for SunGold kiwifruit. So there\u2019s quite a latent demand there that we would be able to build into.\u201d<\/p>\n
But there are challenges, he says, with supply chain infrastructure the biggest.<\/p>\n
Direct shipping from New Zealand to India is needed; currently, fruit must be transhipped through Singapore.<\/p>\n
When Zespri confronted direct shipping problems when launching its growing US market, it chartered vessels.<\/p>\n
Te Brake says doing that for India trade is probably three years off.<\/p>\n
\u201cIt\u2019s about having to build the demand to be able to build the supply chain in behind it. But that\u2019s what we\u2019d look at in future.\u201d<\/p>\n
The next challenge is cool chain infrastructure once the fruit lands in India.<\/p>\n
\u201cAt the moment you\u2019re dealing with 45-degree temperatures and 80% of our fruit is being sold in stalls on the side of the road in blistering heat, with no cool chain behind it.<\/p>\n
\u201cThat\u2019s not great for quality performance, so it\u2019s where we need to be investing more in the channels to get to market, using more modern retail means.\u201d<\/p>\n
On Zespri\u2019s collaborative work with Indian growers and any concerns it risks turning them into competitors, Te Brake says the aim is to support Indian orchardists to produce better counter-seasonal fruit, of more consistent quality.<\/p>\n
\u201cOur fruit sells from April through to October and then they harvest their crop in October. We don\u2019t want to be trying to push the value up in our selling season and then find the local product ends up diminishing the entire value because of poor performance or that it\u2019s not a great consumer experience.\u201d<\/p>\n
The orchard support work in India is overseen by Crown agency the Bioeconomy Science Institute and funded out of Zespri grower returns.<\/p>\n
Zespri is a sponsor of the Herald\u2019s India Business Report.<\/p>\n","protected":false},"excerpt":{"rendered":"\u201cOpportunity-wise, we\u2019re looking at 1.4 billion people and, if you even just met 5% of that market, you\u2019re…\n","protected":false},"author":2,"featured_media":518575,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[74,19064,6726,82896,138,3937,219,3938,16118,2753,55893,4975,3499,13640,2344,123775,29116,23553,661,225,3025,117,111,139,69,43296,312,22974,584,80,2963,57095],"class_list":["post-518574","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-after","tag-agreement","tag-become","tag-brake","tag-business","tag-chief","tag-economy","tag-executive","tag-export","tag-eyes","tag-fifth","tag-free","tag-growth","tag-important","tag-india","tag-indianew","tag-jason","tag-kiwifruit","tag-major","tag-market","tag-most","tag-new","tag-new-zealand","tag-newzealand","tag-nz","tag-puts","tag-says","tag-track","tag-trade","tag-zealand","tag-zealands","tag-zespri"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/518574","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=518574"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/518574\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/518575"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=518574"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=518574"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=518574"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}