Drought conditions led to harvest delays for New Zealand's apples this year as well as smaller sizing for some varieties, but exporters are positive for the season ahead. A shift towards sweeter Asia-focused varieties appears to be yielding dividends, while traditional Europe-oriented Braeburns continue to find market demand. At www.freshfruitportal.com we speak with shippers to hear their views on the season thus far, strategic placements and building a Japanese niche.

Freshco general manager Glenn Pool says New Zealand is now more competitive in the global apple market since it made the shift towards sweeter fruit catering to the Asian palate.

He adds the level of this competitiveness depends on the variety concerned, emphasizing the fruit still has a place in Europe.

"The blocks that are left are producing very good Braeburn so I think the market is still quite favorable for that variety in Europe and the U.K., but there's definitely a focus on new business in Asia," he says.

"Queen has continued to grow in demand from last year, particularly in markets like China, and we have some of our own varieties Breeze and Sonya that are also going well for us in Asia; they're probably the standouts.

"We're just starting Rose, quality is very good, and we're expecting to see very good demand continue on for Rose as well."

For Freshco, the European focus has been on British and German retailers, who will also receive Royal Galas later on in the deal.

"We've got quite a diverse spread of markets for apples, far bigger than what it was five or 10 years ago. It's not just an Asian focus, as Germany and the U.K. are still very much part of the program, as well as retail business in the U.S.

"It seems as though the markets are expanding and there’s opportunity for all the competing countries to forge good business."

He says values are up this year with "very good quality" and believes the opportunity exists to maintain good prices.

"Some of the later varieties have been a bit delayed in harvest and they were a little bit behind in shipping, but in general terms it’s been a good start," he says.

He added the company was very specific in where it sent its fruit and tried not to compete with other Southern Hemisphere exporters in some areas.

"I think that timing to market is also critical, and having varieties that are unique. These are ways that we can try to make the marketplace bigger so we’re not just competing on price or going head to head."

Southern Kowhai Exports manager Sharon Kirk echoes Pool's comments about quality, highlighting that while exchange rates have been a difficulty, the market seems to be "trucking along well".

"The sizing of Royal Gala was a bit small this year, probably bigger than last year but smaller than what we would have liked," she says.

"There's there’s a lot of demand in Royal Galas in 90s through to 110 count, and there was just not enough of those, so we’re lucky with the Royal Gala in having a wide spread of markets so fruit gets placed in the appropriate market."

Asian focus

Aozora New Zealand may not be the country's biggest apple exporter, but it represents the shift towards Asian markets. Meaning "Blue Sky" in Japanese, the company only focuses on Asian markets. Managing director Anthony Bruford speaks Japanese and highlights all his staff are bilingual with English and Asian languages.

Bruford says the prolonged drought that only broke recently had an effect on crops with most varieties starting 7-10 days late.

"That’s put a bit of a delay on the start of the apples but the actual quality and the color and the apples we’re seeing come through the packhouse is fantastic; one of the better seasons we’ve seen," he says.

However, sizing has not played in Aozora's favor this year.

"We've got some quite big programs of Gala into China. Color-wise and quality-wise it's been excellent, but it's just that they've been pretty small - the early Gala we repacked was averaging 135 and the Chinese want mainly 100s and 110s, so they were having to take some 120 to fill the balance of their programs.

"We’ve now moved on to Rose. They obviously like extra big Rose and Queen, mainly 60s and 70s and a few 80s, but the Rose is averaging about a 90 so it’s a little bit on the small size."

On the other hand, Aozora's Fujis have been "incredibly" big in Bruford's view, at around a 78 count when the target Japanese market wants 100-110 count.

"All three major programs that we do we seem to have had the size go in the opposite direction to what we would have really liked. In saying all that the quality has been very good and we’ve been happy with the color too, the apples look fantastic."

Building a foothold in Japan

Bruford says the Japanese market is relatively new for New Zealand and has stringent protocols involving fumigation, but since Enza subsidiary Delica showed it was possible to export there, more shippers have got involved.

"As an industry we shipped 92 containers last year, and certainly there was some fairly big expectations that this would be another good season to Japan," he says.

"We've had a couple of issues – one has been the domestic crop in Japan is up about 250,000 MT this year from last year, which was a particularly low year for domestic volumes so they've got plenty of apples around.

"The New Zealand dollar has been strengthening more and more against the yen, so that’s put a bit of a dampener on the potential for that market, but we’re certainly maintaining the volume we did last year and we’re getting some good feedback from Japanese customers."

While there has been backlash from Japan's domestic industry against imported apples and consumers have a bias towards local goods, Bruford say New Zealand's apples are fresher and tastier compared to Japanese apples that have been stored for eight to nine months.

"We'll need to invest some time and money into some marketing and promotion to encourage them to switch to New Zealand apples which should be fresher and better tasting at that time."

Efforts are also underway encouraging Japanese people to snack on an apple as westerners do, instead of the traditionally preparation of peeling the fruit before cutting it into slices or wedges. Early window closing Bruford says the "little window" between Washington and Chilean apples is closing in Asia.

"Taiwan for example, not for us personally, but for the New Zealand industry has always been a good spot market for New Zealand Fuji and this year that’s been a real struggle with the amount of Washington apples in the market," he says.

"I think the window got re-opened with the port strikes in Chile – that might have helped us out a little bit – but long term the market's not going to be what it was.

"It's the same up in China. A lot of Chilean Galas up there make it tough for us - we have a number of hoops to jump through and higher cost structures than Chile."

www.freshfruitportal.com