1. NZ Cold Storage Association Conference 2016
Alan Pollard
Chief Executive Officer
Pipfruit New Zealand Incorporated

2. Future shock – acceleration of change
Could easily apply to the apple industry
Experienced some very low times; experiencing some very high times
Huge changes afoot

3. Industry timeline
1814 apples introduced to NZ by missionaries led by Reverend Samuel Marsden
1899 first trial shipment of apples to UK in cold storage
1916 NZ Fruitgrowers Federation formed
1920 NZFF obtains government guarantee of 1d per pound against export losses
1926 Fruit Export Council formed (selling agent in market)
WW2 decimates apple exports (57m pounds to zero)
1948 NZ Apple & Pear Marketing Board formed (single desk exporter)
1963 Domestic supply of apples deregulated
2000 NZAPMB/ENZA corporatized
2001 Exports of apples deregulated
2005 industry hits hard times
2008 Apple Futures
2012 Good times ahead
2015 Apple Futures 2

4. Historic data
1925
1955
1975
1995
2001
2005
2010
2015
Growers
1,489
720
742
1,600
1,200
650
327
Exporters 1 86 84
Pack houses
180
125 85 61
Planted area
5,511
2,800
5,202
15,916
13,890
13,495
9,061
9,308
Gross volume
28,364
46,941
159,403
527,000
473,000
565,165
Export volume
3,859
17,454
79,713
302,415
261,000
322,185
265,492
315,000

5. Regional industry 1925 1949 1973 1985 1995 2005 2015 Hawkes Bay 8% 17%
26%
39%
40%
55%
64%
Nelson
37%
42%
36%
29%
22%
27%
Canterbury
10% 6% 5%
13% 2% 0%
Otago
16%
11% 9%
Other
20%
23%
21% 4%

6. Export Destination 2005 2015 Asia 13% 41% North America UK 20% 15%
Other Europe
50%
24%
Other 4% 7%
Exports
66%
59%
Domestic
12%
Processing
27%
29%

7. NZ Industry Situation Outlook
YEAR
EXPORTS (MT)
FOB VALUE (million$)
PRICE MT
2012
288,930
$341.6
$1,182
2013
324,686
$475.3
$1,464
2014
316,284
$536.4
$1,695
2015
315,000
$556.3
$1,766
2016
351,000
$700.0
$1,994
% change
21%
105%
68%
Of the $358m increase $73m is due to volume and $285m due to value
Volume extracted by commercialisation of new exclusive varieties; world leading on orchard practices that deliver quality, taste, safety; high quality trade and market access

8. NZ Industry Situation Outlook
World apple ranking 2016: # 1 New Zealand # 2 Chile # 3 United States # 4= Italy # 4= France

9. NZ Industry Situation Outlook
World apple production 2015: # 1 China at 43m tonnes # 2 United States at 4.5m tonnes # 3 Turkey at 2.7m tonnes # 4 Poland at 3.2m tonnes # 5 Italy at 2.2m tonnes NZ 0.56m tonnes

10. NZ Industry Situation Outlook
World apple export value 2014 ($US):
# 1 United States at $1,088m
# 2 China at $1,027m
# 3 Italy at $975m
# 4 Chile at $822m
# 5 France at $719m
# 7 New Zealand at $433m

11. NZ Industry Situation Outlook
Productivity 2014:
# 1 New Zealand at 61.0 tonnes/hectare
# 2 Chile at 41.3 tonnes/hectare
# 3 Netherlands at 40.7 tonnes/hectare
# 4 Belgium at 40.6 tonnes/hectare
# 5 Italy at 39.3 tonnes/hectare

12. NZ Industry Situation Outlook
Residues:
Lowest of any country
Response to NGA pressures in Europe
2012 USDA report
21 times less that US fruit
42 times less that Chilean fruit

13. NZ Industry Situation Outlook
Long term crop estimate
Gross
Crop (mT)
2015
2016
2017
2018
2019
2020
Hawkes Bay
381,590
382,132
397,989
409,360
432,371
456,275
Nelson
145,479
142,565
143,559
146,012
152,326
156,888
Otago
15,882
16,644
16,980
17,688
18,482
19,078
Other
20,511
21,573
21,970
22,159
22,107
22,240
Grand Total
563,462
562,914
580,498
595,219
625,286
654,481

14. Core Strategic Priorities
Market Access
Highest quality market access
Focus on quality, taste, safety
Europe about residues
Asia about pests and diseases
Prioritisation model
Governance and technical structure
Partnership with MFAT, NZTE, MPI
Market development work
Apple story India World Bank project
China partnership with PFR Japan exchange
Korea connection with domestic industry Trade policy/FTAs

15. Core Strategic Priorities
Relationships
MPI, MFAT, NZTE, MBIE, MSD
Horticulture NZ
Other industry sectors – Kiwifruit, avocados
Industry partners
Collective wisdom and strength
Common interests

16. Core Strategic Priorities
Apple Story
We don’t tell it enough
Powerful story
Broad audience
Differentiator
Name and brand

17. Core Strategic Priorities
Information
Vast amount of industry data
Right information to right person at right time in right way to do right job
Real time on orchard
Must be easily accessible and professional
Intelligent tools

18. Core Strategic Priorities
Recognised Seasonal Employer Scheme
Pacific Island aid programme
9,500 nationally, 5,500 in pipfruit industry
Transformed our industry
Transformed Pacific Island communities
Defined harvest window
Balance between opportunities for New Zealanders and RSE workers

19. Core Strategic Priorities
Attract retain and grow talent
Primary sector needs 25,000 more jobs by 2025
Pipfruit sector needs 4-5,000 more in next 4 to 5 years
Horticulture as a credible career option
Rise of vertically integrated businesses
Roles and skills analysis
Engage with primary and secondary schools, tertiary institutions and work places

20. Core Strategic Priorities
Access to new varieties
World leading plant breeders
NZ exclusive varieties
Premium market position
Anticipate future consumer preferences

21. Core Strategic Priorities
Biosecurity
Protect our borders
Be prepared
Government Industry Agreements

22. So where to from here $1 billion in export returns by 2020
Long term sustainably profitable and growing industry
Increasing share in Hawkes Bay
Continued growth in Asia
Exemplar industry organisation
People want to work with us
Continue to push scientific boundaries

23. Risks Used to be market access Now Biosecurity Weather
Infrastructure i.e. cool stores

24. Thank you

25. NZ Cold Storage Association Conference 2016
Alan Pollard
Chief Executive Officer
Pipfruit New Zealand Incorporated