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

KIWIBERRY 2016 Season 1 NZKBGI Annual General Meeting 27 October 2016 Geoff Morgan - Chief Executive, KNZ 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

Outline of 2016 presentation Kiwiberry applications ƒ Kiwiberry results ƒ Perceptions, observations and questions ƒ 2

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 3

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 of 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 4

Volumes: up 8%, 131k (vs 171k Te projected) Total Volumes WOW Sold Comparing 2015 and 2016 130,748 120,077 140,000 120,000 100,000 63,314 Trays Sold 61,308 80,000 2015 2016 39,776 60,000 34,046 40,000 14,188 13,909 12,823 8,555 2,259 20,000 647 0 Total Total Asia Total NA Australia NZ Total EU/ME Market 5

WOW volume by market: 45,000 39,776 2015 TRAYS SOLD 2016 TRAYS SOLD 40,000 34,046 33,422 35,000 30,123 Top 4 Actual Actual export 2015 2016 markets 30,000 Australia 34,046 39,776 25,000 Taiwan 9,782 30,123 40% Singapore 3,023 5,006 20,000 China 33,422 11,477 14,188 13,909 12,144 Other 39,804 44,366 11,477 15,000 TOTAL 120,077 130,748 9782 8,800 8,555 7,894 10,000 5,006 4,335 3,317 3,023 1,396 1,293 1,287 5,000 1,157 1,112 679 622 500 636 436 313 250 336 168 204 193 174 104 168 0 0 0 0 0 0 0 - 6

Sales by Company: 4 increased & 4 declined Total WOW Volumes Sold Comparing 2014 Actual, 2015 Actual and 2016 Actual 39,902 45,000 40,000 29,646 28,386 35,000 26,078 2014 23,767 23,350 30,000 2015 19,077 18,343 25,000 2016 15,913 14,505 13,728 13,603 13,204 20,000 10,746 9,755 9,345 8,828 15,000 8,349 6,594 5,884 5,266 4,846 10,000 2,982 2,670 5,000 - 7

At $24.37, total WOW average net returns 1 were down on last year by $1.32 cents per tray Net Return comparing 2015 to 2016 35.00 140,000 30.00 120,000 30.91 28.62 28.23 28.23 27.52 27.06 25.00 100,000 26.39 26.26 26.11 25.69 24.56 24.37 24.01 NZD per Te 23.83 Trays (Te) 20.00 80,000 21.68 21.01 20.33 19.86 15.00 60,000 10.00 40,000 5.00 20,000 - - 2015 WOW NR 2016 WOW NR 2015 WOW Volumes 2016 WOW Volumes 1 ANR (average net return) is the return to growers before packhouse costs. 8

Excluding NZ sales, net returns (ROW) were down $1.15 Net Return comparing 2015 to 2016 (excluding NZ sales - R.O.W) 35.00 30.00 30.91 29.46 28.23 27.52 27.03 27.12 25.00 27.02 26.42 26.39 26.11 25.90 25.97 25.13 24.53 24.47 23.53 NZD per Te 20.00 15.00 10.00 5.00 - 2015 R.O.W NR 2016 R.O.W NR 1 ANR (average net return) is the return to growers before packhouse costs. 9

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 40 35 1.92 4.02 30 3.15 0.83 25 0.26 0.38 Per Te 6.95 20 2015 2016 34.93 Gross revenue 35.03 34.93 15 Offshore costs 0.83 1.92 28.99 Shipping costs 4.03 4.02 Return per tray FOB 30.17 28.99 24.37 Exporter onshore costs 3.00 3.15 10 Other marketing costs 0.75 0.83 17.42 Freight to Auckland 0.35 0.26 NZKBGI levy 0.38 0.38 5 Net return per tray 25.69 24.37 Post harvest costs 10.20 6.95 OGR Return 15.49 17.42 0 Gross Offshore Shipping Return per Exporter Other Freight to NZKBGI levy Net return per Post harvest Return revenue costs costs tray FOB onshore marketing Auckland tray costs costs costs Note: (1) This graph includes NZ and Australian sales. The equivalent export OGR is $18.97 (that is excluding NZ sales) 11

OGR is up 25% since 2012: Total OGR over the past five years 20.00 140000 18.00 18.97 120000 17.42 16.00 16.70 15.51 15.56 15.49 100000 14.00 14.84 Net Return per tray 14.59 14.28 13.97 12.00 80000 10.00 60000 8.00 6.00 40000 4.00 20000 2.00 - 0 2012 2013 2014 2015 2016 Total Export Total WOW WOW Volumes 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) 11

OGR comparison for each CM programme: OGR by CM Programme 35 140 130,748 16,907 2,280 4,882 456 684 30 120 2 2,296 6,604 25 2,736 100 1,417 197 1,648 2,948 230 1,293 Trays x1,000 3,787 250 4,393 2,052 NZD per Tray 120 440 384 223 20 456 104 80 275 684 504 4,058 313 456 500 432 1,752 17.42 average 16,501 18,369 5,320 680 254 15 60 193 4,227 549 6,594 578 4,500 10 40 204 5 20 7,016 - 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 13

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. 13

Any other questions or comments? 16

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) 15