Q&A

Lain Jager, CEO of Zespri, heads an in­dus­try in full re­cov­ery, with sales rev­enues of $1.35 bil­lion per year. He talks about the tri­als and tri­umphs of of­fice.

Exporter - - CONTENTS -

Lain Jager, CEO of Zespri, talks about the tri­als and tri­umphs of of­fice.

EX­PORTER: When you tookook on your role at Zespri, what were yourour im­me­di­ate goals, and what vi­sion did you have for the company?

Lain: I was ap­pointed CEO of Zespri in 2008. My im­me­di­ate te goals were to re­build the prof­itabil­ity bil­ity of Zespri Green Ki­wifruit and to con­tinue to drive growth in the Zespri Gold Ki­wifruit business. Our pur­pose e is to de­liver the best re­turns to New w Zealand ki­wifruit grow­ers and de­liver long term sus­tain­able value for thehe in­dus­try.

How­ever, not long into nto my ap­point­ment the ki­wifruit fruit in­dus­try was im­pacted by the bac­te­rial dis­ease Psa, con­firmed in Neww Zealand in Novem­ber 2010. This s ob­vi­ously changed the fo­cus for Zespri to [one of] re­cov­ery from the im­pact.

EX­PORTER: What have been the big­gest chal­lenges you’ve had too man­age in your time at Zespri?

Lain: The ad­vent of Psa a was a huge chal­lenge. It forced a break in the in­dus­try’s growth story y and brought with it a fo­cus on val­uee growth and sup­ply chain ef­fi­ciency. y. The re­cov­ery from Psa is well un­der­way way and that is tes­ti­mony to the en­tre­pre­neur­ial, trepreneurial, in­no­va­tive and co­op­er­a­tive ative spirit that has de­fined the New Zealand ki­wifruit in­dus­try.

Zespri has man­aged d other sig­nif­i­cant is­sues, in­clud­ing the pros­e­cu­tion rose­cu­tion of a for­mer Zespri im­porter r in China for un­der-dec­la­ra­tion of cus­toms ustoms du­ties be­tween 2008 and 2010. 010.

We’ve learned im­por­tant rtant lessons and have sig­nif­i­cantly over­hauled our com­pli­ance prac­tices to min­imise the risk of this hap­pen­ing again.

EX­PORTER: What gives you the most cause for op­ti­mism?

Lain: There’re sev­eral causes for op­ti­mism. Firstly is the re­silience of ki­wifruit grow­ers in the face of Psa; their fo­cus on in­no­va­tion and will­ing­ness to invest in new cul­ti­vars. Th­ese qual­i­ties pro­vide for a strong foun­da­tion.

Se­condly is the qual­ity of the prod­ucts we are sell­ing. Zespri ki­wifruit have proven health ben­e­fits and are the world’s best for qual­ity and taste. We are sell­ing fruit in an in­creas­ingly health con­scious world and into mar­kets in China and South­east Asia, which are go­ing through sig­nif­i­cant eco­nomic de­vel­op­ment. Our chal­lenge is to keep up with the growth.

The in­dus­try has re­bounded, with sales rev­enues of $1.35 bil­lion last year, and or­chard val­ues and fruit vol­umes back to pre-Psa lev­els. We sold 86 mil­lion trays of New Zealand fruit in 2013/14 in 53 coun­tries around the world and we’re aim­ing to more than dou­ble ex­port

earn­ings to $3 bil­lion by 2025.

A big part of this ex­port suc­cess is in China. As re­cently as 2004, trade to China was just one mil­lion trays. Ten years later, we’re look­ing at sales of over 13 mil­lion trays of Zespri ki­wifruit. China is our third third-largest largest mar­ket, tipped to be our num­ber-one mar­ket in five years, and earns pre­mium re­turns for grow­ers.

EX­PORTER: The in­dus­try ap­pears to have re­cov­ered from the Psa out­break. Look­ing back do you think things could have been han­dled dif­fer­ently or bet­ter? What steps have been taken to en­sure that any­thing like that never hap­pens again?

Lain: There is Psa in ki­wifruit pro­duc­ing coun­tries around the world so we should have per­haps ex­pected Psa in New Zealand to a greater ex­tent than we did. Once im­pacted, we learned quickly about how to man­age the dis­ease. Another im­por­tant fac­tor was that we de­vel­oped a suc­cess­ful re­cov­ery path­way through the Gold3 va­ri­ety, en­abling im­pacted grow­ers to graft over from the Hort16A va­ri­ety which was so badly af­fected. Con­tin­ued R&D and proac­tive on-or­chard man­age­ment are also so im­por­tant.

We have ben­e­fited from the cre­ation of a pur­pose-built biose­cu­rity body, Ki­wifruit Vine Health. KVH man­ages the wider biose­cu­rity readi­ness, re­sponse and op­er­a­tional role on be­half of the ki­wifruit in­dus­try and works through part­ner­ship. Gov­ern­ment support has been hugely ben­e­fi­cial. MPI, ki­wifruit grow­ers, New Zealand Ki­wifruit Grow­ers Inc (NZKGI), the post-har­vest and as­so­ci­ated in­dus­tries such as bee­keep­ers, pollen providers, nurs­eries and trans­porters, as well as Zespri, have all been in­volved.

EX­PORTER: What needs to hap­pen to achieve that $3 bil­lion tar­get by 2025?

Lain: A large por­tion of our growth will be achieved through Gold3. We have almost 5,000 hectares in the ground now, which should take pro­duc­tion to around 50 mil­lion trays. We may also see more plant­ing of green ki­wifruit again, as we get some ex­change rate re­lief, which will fur­ther support growth. We are also in­vest­ing strongly to de­velop new va­ri­eties to support longer-term growth.

EX­PORTER: Look­ing at the China mar­ket specif­i­cally, what’s your strat­egy for mak­ing it your num­ber one mar­ket by 2020?

Lain: We’ve only just scratched the sur­face in China. We will take the op­por­tu­nity to ex­tend into tier two ci­ties, ex­tend­ing our dis­tri­bu­tion and bring­ing our prod­uct to more con­sumers. It’s re­ally about hav­ing the sup­ply avail­able to support growth.

EX­PORTER: What other mar­kets hold the most po­ten­tial for growth, and why?

Lain: The South East Asia re­gion is a great op­por­tu­nity, with a pop­u­la­tion of over 600 mil­lion peo­ple and rapidly de­vel­op­ing economies. Our vol­ume growth is cur­rently over 20 per­cent.

The Mid­dle East and Brazil are also ex­cit­ing mar­kets. Our fo­cus is on mar­kets with rapid eco­nomic growth and strong fruit con­sump­tion. Ris­ing in­come lev­els are lead­ing to chang­ing con­sump­tion pat­terns and a greater fo­cus on health.

EX­PORTER: What other new ini­tia­tives has Zespri in­tro­duced re­cently to help boost ex­ports and look after its grow­ers?

Lain: Our strat­egy is very fo­cused. We are boost­ing ex­port growth through bring­ing new prod­ucts to mar­ket and com­mer­cial­is­ing Gold Ki­wifruit, through po­si­tion­ing our­selves in rapidly grow­ing new mar­kets and through mar­ket­ing health to con­sumers in places where we have a higher mar­ket share. From a value per­spec­tive there’s a fourth as­pect, which is op­er­at­ing the most ef­fec­tive sup­ply chain we can. To bring great qual­ity fruit in op­ti­mal con­di­tion to mar­ket and to take cost out of the sup­ply chain.

EX­PORTER: What are some of the fun­da­men­tal ex­port lessons you’re learnt dur­ing your time at Zespri?

Lain: Qual­ity is ev­ery­thing. Ki­wifruit ex­port is also com­plex be­cause our prod­uct is per­ish­able. This makes re­la­tion­ships so im­por­tant. The fruit sup­ply chain is char­ac­terised by deep ex­per­tise as fruit changes hands – from grower to post-har­vest, from shipping to ter­mi­nal op­er­a­tions, and from dis­tri­bu­tion to re­tail. It is im­por­tant to be a pre­dictable part­ner and con­trib­ute to a sus­tain­able sup­ply chain that brings value in the long term. The value isn’t cap­tured in just one sea­son.

EX­PORTER: Why do you think Zespri as a brand has been such a ma­jor suc­cess for New Zealand.

Lain: Our suc­cess and the suc­cess of our grow­ers is due to an un­wa­ver­ing com­mit­ment to qual­ity and our abil­ity to plan for the long term and invest in the brand, in cat­e­gory ex­pan­sion and in R&D. Our in­te­gra­tion al­lows us to cap­ture max­i­mum value from the mar­ket, which is re­turned to New Zealand grow­ers.

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