{"id":96176,"date":"2025-10-23T09:39:08","date_gmt":"2025-10-23T09:39:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/96176\/"},"modified":"2025-10-23T09:39:08","modified_gmt":"2025-10-23T09:39:08","slug":"rockit-global-chief-says-supply-surge-hit-profits-recovery-plan-under-way","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/96176\/","title":{"rendered":"Rockit Global chief says supply surge hit profits, recovery plan under way"},"content":{"rendered":"
\u201cNew Zealand Apples and Pears recognises the ongoing challenges for Rockit Global, but we do not believe this is part of a larger trend,\u201d Morrish said.<\/p>\n
\u201cThe pipfruit model remains profitable, with some operators even reforecasting for higher returns this year as a result of a quality harvest and export season, as well as continued investment into IP [intellectual property] varieties,\u201d she said in a statement to the Herald.<\/p>\n
The 2025 season had started well for many early varieties, however, as always with the industry, different varieties faced different challenges, Morrish said.<\/p>\n
\u201cIn New Zealand, apple varieties are harvested at various times across a full three-month period, so we can see a fluctuation of performance across varieties each year as a result,\u201d she said.<\/p>\n
Rockit Global, which is owned by private equity companies Pioneer Capital and Oriens Capital, along with Punchbowl Investments, has been through a string of CEOs over recent years, with McBeath taking up the reins 12 months ago.<\/p>\n
About 1000ha is planted in Rockit \u2013 90% of it in Tair\u0101whiti and Hawke\u2019s Bay \u2013 and the variety forms about 10% of the national crop.<\/p>\n
Post-Cyclone Gabrielle, which hit both regions\u2019 apple growers hard, Rockit has branched out to Canterbury to set up joint ventures in order to shore up its supply chain, McBeath said.<\/p>\n
The miniature Rockit apple, with its full-sized cousin.<\/p>\n
Rockit Global sells growers licences to grow the miniature apples and markets the fruit \u2013 mostly for export \u2013 at harvest time in February.<\/p>\n
In a typical orchard, the Rockit variety would be grown among other varieties and other pipfruit.<\/p>\n
Some orchards are dedicated apple growers that will move from one variety to the next based on the phase of that product\u2019s lifecycle.<\/p>\n
\u201cBut then we also have a situation where we have a few growing syndicates \u2013 MyFarm being one of them \u2013 which will do a big block, all within the Rockit variety,\u201d McBeath told the Herald.<\/p>\n
\u201cAnd so then when you have those sort of swings or those changes, they\u2019re a little bit more prone to the excess than others are.\u201d<\/p>\n
McBeath said Rockit is priced differently compared with the world\u2019s traded \u201ccommodity\u201d apples.<\/p>\n
\u201cWe treat ourselves as a fast-moving consumer good [FMCG], available 12-months of the the year.\u201d<\/p>\n
The company, based in Havelock North, has the global and exclusive licence to grow and market Rockit apples.<\/p>\n
The company markets its apples in distinctive, small transparent tubes.<\/p>\n
\u201cWe don\u2019t sell in price per kilo \u2013 we sell price per sales \u2018occasion\u2019,\u201d McBeath said.<\/p>\n
\u201cWe really talk about those \u2018occasions\u2019 and so we talk very differently compared to our competitors.\u201d<\/p>\n
The Rockit variety grows under licence in six or seven countries around the world.<\/p>\n
Each of those markets is allowed to sell into their domestic market.<\/p>\n
New Zealand provenance fruit is exported to Asia, the Middle East, India, and the United States.<\/p>\n
Oriens’ first fund invested in apple grower Rockit Global.<\/p>\n
\u201cWhat we find is that consumers prefer the taste and profile of New Zealand fruit so we really project that and are able to command the premium off the back of that \u2013 so that\u2019s where price comes in,\u201d McBeath said.<\/p>\n
\u201cThe real issue that we\u2019ve got at the moment is we don\u2019t have demand ahead of supply.<\/p>\n
\u201cWith a premium product, you don\u2019t want to discount your price to shift volume because you\u2019re really impacting on the future premiumisation of your brand.<\/p>\n
\u201cThe capital intensity of a Rockit orchard coupled with the cost of harvest \u2013 what we do with packaging and what we do with the brand \u2013 means we need a superior price or a premium price to deliver superior returns.<\/p>\n
\u201cWe were doing it up until 2023 and then, really in 2023, we had Cyclone Gabrielle, which impacted that season and impacted the whole ecosystem.<\/p>\n
\u201cOff the back of 2023, it was really uncertain as [to] what would come off the trees in 2024 because the ground was so waterlogged.<\/p>\n
\u201cWe had high incidence of pests and disease, which impacted our ability to get fruit into the market, primarily China and Taiwan, and we had a 137% increase in fruit year-on-year in 2024 over 2023 \u2013 30% more than we expected.<\/p>\n
\u201cThe fruit size was 8% lower and that really put the whole business under duress because, again … we\u2019re trying to protect that price.\u201d<\/p>\n
At that point, Rockit had to consider how it would manage the 2025 season.<\/p>\n
\u201cAnd so we draw a line in the sand and say that number is going to be 65,000 bins, which would have been 25% growth, year on year,\u201d McBeath said.<\/p>\n
\u201cAnd unfortunately, the lingering effects of Gabrielle impacted fruit quality, so we didn\u2019t want to put that into consumers\u2019 hands, which meant we actually had to sell 80% this year over what we sold in 2024.\u201d<\/p>\n
\u201cEighty per cent growth is not controlled growth, especially in a macroeconomic market like we experience today.\u201d<\/p>\n
If the product can\u2019t be branded as Rockit, then that comes off orchard gate returns.<\/p>\n
While McBeath cited the aftermath of Cyclone Gabrielle for much of the company\u2019s supply problems, he said the company needed to get better at planning for the unexpected.<\/p>\n
\u201cI don\u2019t think we\u2019ve been great at doing that over the last couple of seasons. We are redoing how we forecast and so that we take more contingency into our OGR [orchard gate return] forecast.\u201d<\/p>\n
Rockit started the season with a $1.30 to $1.55 per tube forecast range. That has since fallen to 60c a dollar per tube.<\/p>\n
Next season, the company has a $1.25-$1.30 forecast and $1.50 for 2027.<\/p>\n
\u201cIf you look at the commercial model, growers take the bulk of the upside on price, and so that means if price goes up and performs really well, the growers get the bulk of that benefit,\u201d McBeath said.<\/p>\n
\u201cEqually, if the product is not sold at a premium price, then they also incur the price of that impact.\u201d<\/p>\n
Rockit Global was established in 2017 and went on to build a significant pack house in Hastings.<\/p>\n
The business was \u201cperforming exceptionally\u201d all the way up to 2023, McBeath said.<\/p>\n
Many growers expanded into Rockit over 2019, 2020 and 2021.<\/p>\n
\u201cApples take about five years before they get to maturity, so anything grown in 2019\/20\/21 is really hitting that phase now,\u201d McBeath said.<\/p>\n
\u201cAnd so, in hindsight, we were aggressive with regards to that.<\/p>\n
\u201cThat growing has all come on largely as we\u2019ve gone through these crises of Covid, the weather events of 2022, Cyclone Gabrielle in 2023, pests and disease and then low-quality fruit, so those have been all causal factors.<\/p>\n
\u201cEither way, we haven\u2019t got demand ahead of supply.<\/p>\n
\u201cThat\u2019s on Rockit. We\u2019ve got to measure up and we\u2019ve got to deliver that demand ahead of supply plan.\u201d<\/p>\n