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Note 1: The information in this presentation is not to be copied or used for any purpose unless expressly authorised in writing by Kiwifruit New Zealand
KIWIBERRY2016 Season1
Geoff Morgan - Chief Executive, KNZ
NZKBGI Annual General Meeting27 October 2016
2
Outline of 2016 presentation
ƒ Kiwiberry applications
ƒ Kiwiberry results
ƒ Perceptions, observations and questions
3
Kiwiberry Collaborative Marketing Applications
• For the 2016 season, there were 7 collaborative marketers approved: T&GGlobal, Freshmax, Fresh Produce, New Zealand Gourmet, ProducePartners, Seeka, and Southern Produce
• The 7 collaborative marketers operated 47 export programmes into 18export destinations (including Australia but excluding NZ)
• 2 collaborative marketers sold into NZ – Fresh Produce Group andFreshmax. Kiwi Produce also sold into the NZ market
• Packhouses involved are Seeka, KiwiProduce, Freshpac, Riverlock, Prendo(Southern Produce)
• 2016 CM Committee: 2 KNZ Directors – Andrew Fenton and Ruth Lee;advised by KNZ Chief Executive and NZ KiwiBerry Growers Inc.Representative – David Page
• 2017 CM Process – some changes
4
Kiwiberry results context:
For collaborative marketing purposes, consistent with the Regulations, theKNZ focus is principally on net return and OGR per tray on exports to the restof world (ROW), not including Australasia.
However, this presentation has a grower focus, on:
ƒ Whole of world (“WOW”) volumes (including NZ)
ƒ Return before pack house costs, for whole of world including NZ andrest of world (“ROW”) (NZ sales may be/are class 2)
ƒ WOW OGR, that is return to growers at orchard gate
5
Volumes: up 8%, 131k (vs 171k Te projected)
2,25
9
61,3
08
8,55
5
34,0
46
13,9
09
120,
077
647
63,3
14
12,8
23
39,7
76
14,1
88
130,
748
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
TotalEU/ME
Total Asia Total NA Australia NZ Total
Tray
sSo
ld
Market
Total Volumes WOW Sold Comparing 2015 and 2016
20152016
6
WOW volume by market:
40%
Top 4exportmarkets
Actual2015
Actual2016
Australia 34,046 39,776
Taiwan 9,782 30,123
Singapore 3,023 5,006
China 33,422 11,477
Other 39,804 44,366
TOTAL 120,077 130,748
34,0
46
9782
13,9
09
8,55
5
33,4
22
8,80
0
3,02
3
3,31
7
1,39
6
0
622
0 0 436
636
168
0 174 1,
287
168
336
39,7
76
30,1
23
14,1
88
12,1
44
11,4
77
7,89
4
5,00
6
4,33
5
1,29
3
1,15
7
1,11
2
679
500
313
250
204
193
104
0 0 0
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
2015 TRAYS SOLD 2016 TRAYS SOLD
18,3
43 23,3
50
10,7
46
8,34
9
5,26
6 8,82
8
26,0
78
2,98
2
15,9
13
28,3
86
14,5
05
5,88
4
2,67
0
9,34
5
29,6
46
13,7
28
13,6
03
39,9
02
13,2
04
9,75
5
4,84
6
6,59
4
23,7
67
19,0
77
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
201420152016
7
Sales by Company: 4 increased & 4 declined
Total WOW Volumes Sold Comparing 2014 Actual, 2015 Actual and 2016 Actual
8
At $24.37, total WOW average net returns1 were down onlast year by $1.32 cents per tray
1ANR (average net return) is the return to growers before packhouse costs.
28.2
3
23.8
3 26.3
9
27.0
6
24.5
6
19.8
6
28.2
3
24.0
1
25.6
9
26.1
1
21.0
1
26.2
6
27.5
2 30.9
1
20.3
3
28.6
2
21.6
8 24.3
7
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
-
5.00
10.00
15.00
20.00
25.00
30.00
35.00
Tray
s(T
e)
NZD
perT
e
Net Return comparing 2015 to 2016
2015 WOW NR 2016 WOW NR 2015 WOW Volumes 2016 WOW Volumes
9
Excluding NZ sales, net returns (ROW) were down $1.15
1ANR (average net return) is the return to growers before packhouse costs.
28.2
3
26.4
2
26.3
9
27.0
3
25.1
3 29.4
6
25.9
0
27.1
2
26.1
1
24.4
7 27.0
2
27.5
2 30.9
1
24.5
3
23.5
3 25.9
7
-
5.00
10.00
15.00
20.00
25.00
30.00
35.00
NZD
perT
eNet Return comparing 2015 to 2016 (excluding NZ sales - R.O.W)
2015 R.O.W NR 2016 R.O.W NR
Reduced pack-house costs meant the average WOWOGR per tray increased by $1.93
Key: Green arrows – YOY improvement in OGRRed arrows – YOY decrease in OGR
Note: (1) This graph includes NZ and Australian sales. The equivalent export OGR is $18.97 (that is excluding NZ sales)
11
34.93
28.9924.37
17.42
1.92
4.02
3.150.83 0.26 0.38
6.95
0
5
10
15
20
25
30
35
40
Grossrevenue
Offshorecosts
Shippingcosts
Return pertray FOB
Exporteronshore
costs
Othermarketing
costs
Freight toAuckland
NZKBGI levy Net return pertray
Post harvestcosts
Return
PerT
e
2015 2016Gross revenue 35.03 34.93Offshore costs 0.83 1.92Shipping costs 4.03 4.02Return per tray FOB 30.17 28.99Exporter onshore costs 3.00 3.15Other marketing costs 0.75 0.83Freight to Auckland 0.35 0.26NZKBGI levy 0.38 0.38Net return per tray 25.69 24.37Post harvest costs 10.20 6.95OGR Return 15.49 17.42
11
OGR is up 25% since 2012:
Note: The yellow bars on this graph are for total export sales (excluding NZ sales)The light green bars are for total WOW sales (including Australia and New Zealand)
14.8
4
15.5
1
15.5
6 16.7
0 18.9
7
13.9
7
14.5
9
14.2
8 15.4
9 17.4
2
0
20000
40000
60000
80000
100000
120000
140000
-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00
20.00
2012 2013 2014 2015 2016
Net
Ret
urn
pert
ray
Total OGR over the past five years
Total Export Total WOW WOW Volumes
OGR comparison for each CM programme:
13
16,9
07
2,28
0
4,88
2
456
684
2
2,29
6
6,60
4
2,73
6
1,41
7
197
230
1,64
8
2,94
8
250
1,29
3
3,78
7
120
440
384
4,39
3
223
456
104
2,05
2
275
684
504
313
456
500
432
4,05
8
1,75
2
16,5
01
680
254
18,3
69
5,32
0
193
549
4,22
7
578
6,59
4
4,50
0
204
7,01
6
17.42
20
40
60
80
100
120
140
-
5
10
15
20
25
30
35
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47
Programmes
Tray
sx1
,000
NZD
perT
ray
OGR by CM Programme
average
130,748
13
Exporter comments for the 2016 season:
• Harvest was later than expected, this helped build demand and lift earlyprice levels.
• The unexpected closure of China meant fruit diverted to other markets.(mainly Australia and Taiwan)
• This created downward pressure on prices initially in the other markets,but then prices stabilized.
• Lower prices for Chilean fruit kept downward pressure on NZ product,however Chilean quality was poor.
• Some exporters continued promotion activity in markets to build categoryknowledge and demand. Others spent no promotional funds as demandexceeded supply.
• Underlying demand is strong worldwide, need to extend season at bothends, need to develop other markets to lessen reliance on China.
Any other questions or comments?
16
15
4.1: What is KNZ’s role in kiwiberry collaborativemarketing?
• KNZ is required to decide whether to approve a collaborative marketingarrangement (Regulation 28)
• Apart from the provisions of Regulation 24, there are no limitations on form, content,term, or any other aspect of a collaborative marketing arrangement
• The applicant must satisfy KNZ that overall supplier wealth will be increased by theproposed arrangement. It is up to the CM applicant to put their case, and each isconsidered on its merits.
• The applicant through collaboration needs to have regard to the effect itsarrangement will have on others (including Zespri if it was in the market) to helpestablish whether the arrangement will increase supplier wealth.
• KNZ is available for discussion prior to applications being submitted.
• Before deciding whether to approve an application, KNZ may indicate possiblechanges to the application which if included would improve the prospects of theapplication being approved (Regulation 28).
• KNZ can impose necessary and reasonable conditions. (Regulation 28)
