NZ Apple Export markets

1. NZ Apple Export markets What have we done to affect DEMAND

2. The NZ Apple Industry • Fresh Apple exports in 2011 = 363 million NZ$ Following low returns in the 2004 – 2005 period, and the consequential reduction in hectares and the number of growers and the number of apple exporting packhouses and other resources, apple sector returns have improved and the planted area has stabilised with new plantings matching tree removals.

3. In 2011, New Zealand apples were exported to 74 countries to a total value of $363 million in 2011, which was an 11.9% increase on 2010 but significantly less than 2004 exports of $485m.

5. The top 7 Apple varieties exported by NZ between 2007 10 have not changed significantly except Braeburn (decreased by 9%) and Jazz (increased by 7%).

6. NZ is now exploring new apple cultivars that offer quality, novelty, consumer appeal and superior on-orchard performance. • These new fruit are then protected by international plant patents and commercialised worldwide through mechanisms that ensure ongoing commercial returns to New Zealand

7. Jazz™ – The designer apple • Introduction of new apple varieties is part of New Zealand’s strategy to retain a competitive position in the global apple market. • Plant Variety Rights (PVR) now allow breeders to retain ownership of their varieties. • Jazz™ is a apple variety, bred by HortResearch scientists who crossed Braeburn (seed parent) and Royal Gala (pollen parent) to obtain a firm apple, which is crisp and crunchy with an attractive tangy effervescence; it is protected by a PVR.

8. Reliability of supply – case study Jazz • Jazz™ trees have been planted in commercial orchards in New Zealand, USA (Washington), and France, ensuring a continuous supply of quality fruit available to global customers. • Having orchards in both hemispheres allows the jazz variety to maintain its ‘shelf space’ in supermarkets. • This strategy maintains consumer demand for the variety without the need to re-establish demand for the variety with each new season which would increase marketing costs. • ENZA controls the commercial development of Jazz™. Royalties collected on fruit sold from the orchard are returned to New Zealand.

9. Meeting consumer PreferenceDiversification of varieties • An important factor in the position for New Zealand apples has been the diversification of varieties. In 2004, Braeburn variety was 42% of the national export crop and has rapidly declined to 27% in 2010, being displaced by new varieties such as Jazz™ and the Pacific series

10. More on Jazz • http://www.youtube.com/watch?v=Jq4qGNQ36kM • www.jazzapple.co.nz/

11. Apple Futures

12. Introduced in 2007, AppleFutures is an Integrated Pest Management (IFP) programme designed to keep pest and disease levels low with average chemical residues below 10% of EU regulatory tolerances. The programme incorporates a range of different tools, used in different combinations depending on the growing environment, to predict disease risk, monitor pests, maintain beneficial organism levels and target spraying when required.

13. History • Way back in the 1990’s New Zealand introduced an Integrated Fruit Production Programme (IFP). This phased out the use of harsh chemicals, and replacing these with more acceptable orchard management techniques, and softer sprays for the control of insects and disease. • IFP has become the industry standard adopted by buyers in key world markets, who now demand that all suppliers to these Northern Hemisphere markets produce fruit to the IFP standard. • European consumers are now demanding fruit with even lower chemical residues. As a result these retailers are now challenging their suppliers to meet increasingly stringent residue standards. NZ has identified this development as an opportunity. Apple Futures is the project charged with developing, commercializing,  and implementing that capability.

14. With current knowledge “residue free” is an unrealistic claim, that in practice is highly unlikely to be achieved by an active production system - especially one that maintains standards of fruit quality and appearance.

15. US research has identified that 43% of [claimed] residue free produce actually contained residues. This fact highlights the inability of growers to guarantee their product is 100% free of chemical residues -  even if they don’t use them, as cross contamination, spray drift, orchard and pack house management practices all impact on residues

16. All New Zealand apples destined for the European market, and 65% of the total harvest, are now produced under the AppleFutures programme, delivered with ultra low chemical residues. • Subsequently, Pipfruit New Zealand have introduced a new marketing campaign, “100% Pure Apples from New Zealand”, to demonstrate to consumers the benefits of the programme.

19. Questions • Which market force does the Apples Futures Programme relate to? • Will it increase supply or demand. And how?