The New Zealand kiwifruit industry is testing the waters in its third-largest export market after an inaugural shipment of the Enza Red variety arrived in Shanghai Pudong International Airport on May 24.

Property rights for the variety belong to German-owned New Zealand company Turners & Growers (NZX: TUR), and its subsidiary Delica was responsible for the shipment.

Shawn Shan from Shanghai Zelun Trading Co ltd told www.freshfruitportal.com the Chinese market had promising potential for the product, adding the first arrival had 220 trays (6kg each) that would enter RT Mart stores for direct sales.

"We chose air shipping for market research. Given the limited amount of product we have this time, we'll only deal with retail terminals, instead of the wholesale market," Shan said.

"We have been working with Delica for some years now. We have done several projects with them on apples and cherries, so it was no surprise for us when Enza reached out to us to introduce this new variety to China. We then ran the proposal with RT Mart and we are going to conduct market research for Enza's new product right in RT Mart stores."

Shan highlighted RT Mart's leading role on the eastern Chinese produce scene, adding that in-store sampling and telemarketing were among the techniques he planned to use in kicking off the Enza Red marketing campaign.

"RT Mart is the 'number one' in eastern China, in terms of both number of stores and sales volume. That's why we decided to work with them."

"RT Mart has over 200 stores in Eastern China area. We have  a rather small-sized shipment this time, so our best option is to pick a few typical stores and run the campaign for a week. If all our products are sold out within one day, then we can’t get the proper survey results."

He said the promotional campaign was set to launch officially on May 28.

"Enza will send over some of their people to our promotional sites to get feedback from consumers. That shows how much emphasis Enza places on this new variety. Consumer feedback is a key factor, so we will do the taste testing and ask them to get involved in a survey.

Shan emphasizes the deal didn't happen overnight, and that discussions about the opportunity had occurred previously.

"Actually, this year is not our first year talking about introducing Enza red. The thing is there's finally sufficient shipments for China this year, so we can follow through with the plan.

"New Zealand shows strong interest in the Chinese market, so whenever there is a new variety and we think it's good, why not offer our customers some more fruit options?"

But will Enza Red stand out from the rest? After examining the fruit himself, Shan said he could easily tell from the fruit's appearance that it was a brand new variety.

"It’s obvious Enza Red is different from the green and gold varieties. Like the Gold variety, Enza red's outward appearance is smooth and slightly speckled. It shares a similar skin color with the Enza Gold.

"However, unlike the duckbill shaped bottom of the traditional gold varieties or the flat bottom of (Zespri) SunGold, Enza Red's bottom is distinctively dented, which would signal to the consumer that it's a brand new variety, claims Shan.

"When cut open with a striking red central star-burst, Enza Red is a visually spectacular variety.  And the consumers immediately expressed interest in tasting the fruit after seeing it."

In terms of pricing, Shan said the airfreighted fruit would hit the market with a price similar to that of gold varieties shipped over by seafreight.

However, he mentioned the crop size of Zespri SunGold had turned out to be "unexpectedly big", which would impact market prices.

"What I heard, in some supermarkets SunGold kiwifruit managed to peak at CNY10 (US$1.59) each. Since Enza Red kiwifruit come in a smaller size, my estimate for their price would be between CNY6-8 each (US$0.96-1.28)."

Shan said Delica would place its strategic focus on Shanghai initially.

"There’s a larger market potential in Shanghai. There are two or three companies dealing with the Enza brand in Shanghai, but only two firms including us, are designated as Enza's stable partners.

"Frankly, the marketing efforts are still at a preliminary phase, so Enza is still testing the waters with a couple of different partners. But I'm sure after a year or two of collaboration, it will shift toward having only one importer taking care of its products at a particular market, with its strategic focus expanding throughout China, to say, Beijing, Shanghai, Guangzhou or Shenyang."

"Given we have a 50-50 focus in both retail terminals and the wholesale market, the collaboration between us and Enza has had satisfying yields."

Shan expected long-term growth with both Enza Red and Enza Gold varieties, adding that the latter was yet to be officially introduced in China but was high on Zelun's list for future imports.

"The Enza Gold variety could be bred in Chile, but this year's production dropped as a result of heavy frost in the previous year," Shan said.

"But trust me, next year’s Chilean Enza Gold will definitely arrive in Shanghai," he said confidently.

When asked about the rapidly developing business of e-commerce, Shan said he believed traditional retailing still played an irreplaceable role in new product promotion.

"As a matter of fact, what e-commerce sites do to produce products is to broaden the scope of marketing for products already known to consumers. As you also know, young people nowadays like to buy things online, but they usually do so based on pre-existing preferences.

"So, for products new to the Chinese market, such as Enza Red, a market survey based on face-to-face interaction such as taste testing is an important component in the whole marketing process. If you ask me, I think for new products, traditional retailing is still very much a necessary channel."

"Great success" for Enza's Jazz and Envy apples

Shan also discussed plans to continue collaboration with Delica on two exclusively developed apple varieties, Jazz and Envy.

"Initial attempts were made two years ago, but the collaboration really took shape during last year. We launched promotion campaign for Enza's Jazz apples through RT Mart and achieved great success. Beginning with this year, New Zealand has resumed its apple exports," he said.

"We might have to deal with some rather complicated procedures, but there should be no problem with the exports.

"Speaking of Envy, to be honest, it’s got a great taste. I mean, it’s juicy and crispy at the same time and has a unique scent to it, which is sharply different from all the apples we’ve had before."

He highlighted the advantages this apple held over another proprietary apple that was bred in Australasia.

"We've tried Pink Lady apples before, but the problem with Pink Lady is that its skin is very sensitive, which is often bruised by contact during transportation. But with Envy, it doesn't have this problem at all.

He said the first Shanghai-bound shipments of Envy apples were being loaded in New Zealand, and arrival in Shanghai was expected in mid- to late-June.

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