Zespri applies New Zealand growing methods in South Korea

Nigel Costley outlines Zespri's operations in South Korea, where kiwifruit is a premium product in a fast growing market.

Zespri’s aims to supply the lucrative South Korean market with kiwifruit for as close to year around as possible and maintain the high prices with good quality fruit. Zespri has a 60 percent volume increase in golden kiwifruit grown on Jeju Island, South Korea, where it has 147 orchardists growing under licence for the local market.

“We’re really pleased with our growth in Korea this season – thanks to the efforts of our growers, the quality of the fruit is very good and we’ve seen significant growth in production over last year,” Simon Limmer, Zespri’s General Manager of Global Supply, says.

Golden kiwifruit is a premium product in Korea – although a country which generally has cheap food, Korean supermarkets in October of last year were selling golden kiwifruit from New Zealand at around NZ$1.20 a piece.

With 80 percent of Jeju’s crop already delivered to distributors this year, Zespri has an excellent start to their sales campaign with volumes and prices remaining high.

“We’ve increased our promotional focus in the region, with more in-store sampling. And one of our major marketing successes this year was a three minute feature on a major TV breakfast show,” Mr Limmer says.

Zespri began harvest kiwifruit on Jeju in 2006 and has two staff permanently placed there: supply manager, Jason Kim and technical consultant, Callum Kay. Zespri has invested considerable technical expertise in this operation, with 50 chemicals authorised, a target of 14 percent dry matter to ensure the right flavour and a NZ$12,000 chronometer to give the market the colour that it wants.

Typically orchards in Jeju are much smaller (1.6 hectares) than their New Zealand counterparts (six hectares) and because of the threat of typhoons the fruit must be grown inside sturdy tunnel houses constructed of heavy gauge galvanized piping approximately 50 metres in length.

Because of the very wet summers fungicide used on Jeju is much heavier than in New Zealand, Mr Kay says. Uppermost among Mr Kay’s duties is to ensure spray regimes and orchard compliance meets international standards.

Using Mr Kim as interpreter, Mr Kay gives presentations to the growers on technical aspects of the process.

“I find the growers are very receptive to the science, but they also have their traditional methods.

Every grower is looking for a magic formula, but environmentally we have very different conditions, often with poor soils and wet conditions,” Mr Kay says.

He runs trial orchards using techniques from New Zealand to see if they work and modify them if they don’t.

Pollination is done artificially with a fan-operated gun, applied every two days over the 10 days the fruit was in flower. The pollen is brought from New Zealand and administered with a dye to give the pollinator a good guide on what flowers have been done. The fruit size (at least 72 grams) indicted that this is an effective method.

While pollination might be high tech, harvesting on Jeju is done the old fashioned way, with the growers and their wives collaborating in large groups. The fruit is picked and placed into trays that are sent directly to the pack house. Great care is taken to handle the fruit gently into the trays which are stacked on a hand-pulled cart.

“They do the picking very well – an orchard in one day. Typically the wives do most of the work while the guys sit around drinking. The labour cost is reckoned at two thirds that of New Zealand,” Mr Kay says.

Growing off-shore, both in Jeju and Italy, looks to be a great success for Zespri – there are only a couple of months of the year when they can’t put their golden kiwifruit in Korean supermarkets and, with the development of new cultivars with variable harvest times, they may well be able to cover the whole year.

With exports to Korea from New Zealand totaling 7.5 million trays (33 fruit in each) in 2008, Zespri will be watching the progress of negotiations between the two countries on an FTA with keen interest.

They face the prospect of being undercut by the Chileans who, with an FTA already in place, will pay only 16.6 percent tariff for their kiwifruit to Korea this year compared to Zespri’s 45 percent.

- By Nigel Costley

Read more:

The 2009 Asia:NZ report, South Korea: An Opportunity for New Zealand business, includes a case study on Zespri

Photos:

1) Kiwifruit grows inside the tunnel house

2) Jason Kim, supply manager for Zespri in Korea and technical consultant, Callum Kay

3) Korean grower Yeon Bae Kim

4) An outside view of the tunnel house

Article uploaded: 5 March 2010