KIWIBERRY 2016 Season 1 NZKBGI Annual General Meeting 27 October - - PowerPoint PPT Presentation

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

KIWIBERRY

2016 Season1

Geoff Morgan - Chief Executive, KNZ

NZKBGI Annual General Meeting

27 October 2016

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Outline of 2016 presentation

ƒ Kiwiberry applications ƒ Kiwiberry results ƒ Perceptions, observations and questions

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Kiwiberry Collaborative Marketing Applications

• For the 2016 season, there were 7 collaborative marketers approved: T&G

Global, Freshmax, Fresh Produce, New Zealand Gourmet, Produce Partners, Seeka, and Southern Produce

• The 7 collaborative marketers operated 47 export programmes into 18

export destinations (including Australia but excluding NZ)

• 2 collaborative marketers sold into NZ – Fresh Produce Group and
• Freshmax. 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

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Kiwiberry results context:

For collaborative marketing purposes, consistent with the Regulations, the KNZ focus is principally on net return and OGR per tray on exports to the rest

• f 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 and rest of world (“ROW”) (NZ sales may be/are class 2) ƒ WOW OGR, that is return to growers at orchard gate

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Volumes: up 8%, 131k (vs 171k Te projected)

2,259 61,308 8,555 34,046 13,909 120,077 647 63,314 12,823 39,776 14,188 130,748

20,000 40,000 60,000 80,000 100,000 120,000 140,000 Total EU/ME Total Asia Total NA Australia NZ Total Trays Sold Market

Total Volumes WOW Sold Comparing 2015 and 2016

2015 2016

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WOW volume by market:

40%

Top 4 export markets Actual 2015 Actual 2016 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

34,046 9782 13,909 8,555 33,422 8,800 3,023 3,317 1,396 622 436 636 168 174 1,287 168 336 39,776 30,123 14,188 12,144 11,477 7,894 5,006 4,335 1,293 1,157 1,112 679 500 313 250 204 193 104

• 5,000

10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000

2015 TRAYS SOLD 2016 TRAYS SOLD

18,343 23,350 10,746 8,349 5,266 8,828 26,078 2,982 15,913 28,386 14,505 5,884 2,670 9,345 29,646 13,728 13,603 39,902 13,204 9,755 4,846 6,594 23,767 19,077

• 5,000

10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 2014 2015 2016 7

Sales by Company: 4 increased & 4 declined

Total WOW Volumes Sold Comparing 2014 Actual, 2015 Actual and 2016 Actual

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At $24.37, total WOW average net returns1 were down on last year by $1.32 cents per tray

1ANR (average net return) is the return to growers before packhouse costs.

28.23 23.83 26.39 27.06 24.56 19.86 28.23 24.01 25.69 26.11 21.01 26.26 27.52 30.91 20.33 28.62 21.68 24.37

• 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

Trays (Te) NZD per Te

Net Return comparing 2015 to 2016

2015 WOW NR 2016 WOW NR 2015 WOW Volumes 2016 WOW Volumes

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Excluding NZ sales, net returns (ROW) were down $1.15

1ANR (average net return) is the return to growers before packhouse costs.

28.23 26.42 26.39 27.03 25.13 29.46 25.90 27.12 26.11 24.47 27.02 27.52 30.91 24.53 23.53 25.97

• 5.00

10.00 15.00 20.00 25.00 30.00 35.00 NZD per Te

Net 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 WOW OGR per tray increased by $1.93

Key: Green arrows – YOY improvement in OGR Red 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)

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34.93 28.99 24.37 17.42

1.92 4.02 3.15 0.83 0.26 0.38 6.95

5 10 15 20 25 30 35 40

Gross revenue Offshore costs Shipping costs Return per tray FOB Exporter

• nshore

costs Other marketing costs Freight to Auckland NZKBGI levy Net return per tray Post harvest costs Return

Per Te

2015 2016 Gross revenue 35.03 34.93 Offshore costs 0.83 1.92 Shipping costs 4.03 4.02 Return per tray FOB 30.17 28.99 Exporter onshore costs 3.00 3.15 Other marketing costs 0.75 0.83 Freight to Auckland 0.35 0.26 NZKBGI levy 0.38 0.38 Net return per tray 25.69 24.37 Post harvest costs 10.20 6.95 OGR Return 15.49 17.42

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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)

14.84 15.51 15.56 16.70 18.97 13.97 14.59 14.28 15.49 17.42

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 Return per tray

Total OGR over the past five years

Total Export Total WOW WOW Volumes

OGR comparison for each CM programme:

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16,907 2,280 4,882 456 684 2 2,296 6,604 2,736 1,417 197 230 1,648 2,948 250 1,293 3,787 120 440 384 4,393 223 456 104 2,052 275 684 504 313 456 500 432 4,058 1,752 16,501 680 254 18,369 5,320 193 549 4,227 578 6,594 4,500 204 7,016

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

Trays x1,000 NZD per Tray

OGR by CM Programme

average 130,748

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Exporter comments for the 2016 season:

• Harvest was later than expected, this helped build demand and lift early

price 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 category

knowledge and demand. Others spent no promotional funds as demand exceeded supply.

• Underlying demand is strong worldwide, need to extend season at both

ends, need to develop other markets to lessen reliance on China.

Any other questions or comments?

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4.1: What is KNZ’s role in kiwiberry collaborative marketing?

• KNZ is required to decide whether to approve a collaborative marketing

arrangement (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 the

proposed arrangement. It is up to the CM applicant to put their case, and each is considered on its merits.

• The applicant through collaboration needs to have regard to the effect its

arrangement will have on others (including Zespri if it was in the market) to help establish 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 possible

changes to the application which if included would improve the prospects of the application being approved (Regulation 28).

• KNZ can impose necessary and reasonable conditions. (Regulation 28)