Latest tweets from Zespri

Zespri

Redefining the Chinese gooseberry as the Kiwi fruit

Sector: Futurefood
Themes:

Kiwi fruit are a great example of market creation. Zespri, owned by New Zealand growers, shows how to build premium brands that increase the market size, whilst also capturing disproportionate value, and what might otherwise be a commodity market.

zespri“Yang tao” or “Chinese gooseberries” as they were initially known, were taken from China to New Zealand in the early 20th century, by a Wanganui school mistress called Mary Isabel Fraser. In the 1950s they evolved into the green, furry “Kiwi fruit” which we know today and became New Zealand’s largest export. Today, Kiwis are still the second largest grower of their fruit (after Italy), and it is Lain Jager, CEO of Zespri who continues to shape the market.

“Fresh produce is a marketplace cluttered with commodities, where earning as price premium and sustaining customer loyalty is a significant challenge” says Jager. Recognising that overcoming this commodity trap is critical to building a profitable livelihood for New Zealand kiwifruit growers, Zespri has focused on establishing meaningful brand reputation through sophisticated marketing.

This commitment to sophisticated marketing is backed by a consistency of supply of a high-quality, high-taste product, a market-based payment method where growers are paid according to meeting demand and driving innovation. Most successful amongst the different branded varierties is Zespri Gold.

“Zespri’s success in establishing itself as the world’s premium kiwifruit brand is built on capturing two-thirds of the value in the global kiwifruit category, while only accounting for one-third of globally traded kiwifruit” explains Jager.  “Despite kiwifruit only accounting for less than half a percent of the global fruit bowl, in markets where Zespri has invested, kiwifruit has become one of the top ten fruits consumed, with a large base of regular and loyal consumers”

The brand is owned by New Zealand kiwifruit growers, who fiercely protect their ability to capture value from the supply chain.  “Unlike most fruit producers that are at the mercy of the traders the shared brand commands a price premium, supported by sophisticated marketing programmes to trade and consumers, the types previously only seen in the packaged goods categories, and maximizes the returns back to the grower”.

New product development in the fruit business takes time.  Through critical selection of kiwifruit plant varieties and natural plant breeding methods, Zespri has the largest global selection of new kiwifruit varieties.  It launched the immensely popular “Zespri Gold” to the market in 2000; and is working now on the next generation of sweeter, flavourful varieties to grow the category and cater to the range of tastes throughout Japan, Asia and European markets.  New variety breeding and selection can take up to 15 years through to commercialization.  Kiwi fruit is also celebrated for its health benefits “twice the vitamin C of an orange, low glycemic index for diabetics, accelerates digestion of proteins, and a natural source of folate”.

Zespri is also an advanced user of social media. These include a game application developed in China and launched globally where you can care for and grow your own Zespri kiwifruit in an on-line game, the 14 day Zespri challenge to feel healthier, local Facebook pages for each language and culture, and online competitions particularly seeking to promote the health benefits to older people.

Pivot points for Zespri in “changing the game” of kiwifruit were:

  • Disrupt: Creating a new market space, built around a new type of fruit.
  • Inspire: Building a premium brand, Zespri Gold, that defines the market
  • Design: Product innovation that constantly evolves varieties, flavours and process
  • Amplify: Promoting the fruit (not just the brand) globally for its nutrition and taste

Find out more