Commodities: Markets blow the kiwi a raspberry
Monday 22 March 1993
Once an exotic and expensive food used sparingly for special occasions and fancy garnishes, kiwi fruit now are over-produced in such quantities that the price is scraping all-time lows.
Waitrose is selling them for 12p each, and in packages of 12 for 99p, which works out at just over 8p each. When was the last time you bought anything for 8p?
The New Zealand kiwi industry denies that the fruit is a riches-to-rags saga, but it is hard to see it otherwise.
The first exports of New Zealand kiwi fruit landed in Britain and America in 1951. By the mid-1970s, growers were producing them in commercial quantities for export.
Then the marketing push began, viewed today as a success story. The New Zealand Kiwi Fruit Marketing Board, a growers' co-operative, kept strict quality controls on the fruit.
It launched an international advertising campaign, focusing on Europe and Japan, now its biggest markets.
The kiwi was becoming more available on British wholesale markets at the same time that nouvelle cuisine was catching on. With its lovely green colour, interesting flavour and exotic origins, kiwi fruit was perfectly placed to benefit from the latest restaurant fashion.
Besides looking elegant when sliced, the kiwi was exalted for its low calories (60 cal) and high vitamin C and potassium content. It rode the crest of the wave of trendiness, and no self-respecting chic restaurant's kitchen was complete without it.
Sadly, the kiwi seems to be something of a fashion victim now. Peter Luxton, European marketing director for the board, says the fruit suffered the same fate in the British press as do many UK sports personalities: it was built up hugely, only to be knocked down again. Headlines like 'Kiwi fruit is passe' and 'Kiwi fruit: in memoriam' appeared in newspapers.
Mr Luxton says the fruit has never caught on in the UK as it has elsewhere. We eat 350 grams (12 ounces) of kiwi per year per person: the Germans eat seven times as much.
At home in New Zealand, when the kiwi's popularity was gaining momentum, doctors and dentists and bankers saw growers getting rich and decided they wanted a piece of the action. They bought orchard land when property values were rising sharply and planted vines, which take six years to grow to full production.
Ten or 12 years ago when it was still a little-produced fruit, New Zealand kiwi sold wholesale for pounds 10-pounds 12 per 3.5 kg tray, a tray containing an average of 35 fruits - compared with pounds 1.20-pounds 1.50 a tray today. Growers then pocketed NZdollars 10-NZdollars 12 (pounds 3.50-pounds 4.30) per tray.
But Mike Lloyd, sales manager at Christopher Sims, a UK fruit importer, believes the New Zealand Marketing Board sowed the seeds of its own discontent.
'New Zealand were the forerunners, but they supplied kiwi vines to many other countries and actually ruined their own market,' he said.
Italian and French crops reached the world market in 1986. Last year, Italian production exceeded New Zealand's for the first time, at 300,000 tonnes. Chile, Greece, Spain and Portugal also export.
Not surprisingly, world production overall has rocketed, from 2-3 million trays in 1980 when New Zealand had the market to itself, to about 130 million trays today. The world market is saturated.
Prices paid to New Zealand growers have slumped to a record low of NZdollars 3.85, below break-even for most. Prices are so poor that the once-chic fruit is increasingly fed to sheep. About 500 growers have left the business since 1990, but 4,000 are struggling on. The marketing board is encouraging them to pull up their vines.
Production is being curtailed - to 67 million trays for export last year, down from 70 million in 1991 - though New Zealand's competitors are not thinking of cutting back. Lower production should slowly lift prices.
The returns to importers in Britain are also unattractive. But consumers are reaping the benefits as the market regains its balance. Today's prices are less than a quarter of what they were at their peak 10 years ago, and Waitrose says this has made the fruit more popular.
The UK Fresh Fruit and Vegetable Information Bureau says that kiwis are moving from the exotic to the mainstream category. Total imports to the UK rose to 17,600 tonnes in 1992 from 12,710 in 1991.
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