BAY OF PLENTY BUSINESS NEWS DECEMBER 2019

26 BAY OF PLENTY BUSINESS NEWS December 2019
Global Zespri kiwifruit returns
remain strong
Kiwifruit export marketer Zespri is
forecasting strong returns from a record
harvest from its European growers.
By DAVID PORTER
Zespri’s European growers
- around 750 families
- play a key role in
Zespri’s global supply strategy,
which allows it to supply premium
Zespri kiwifruit for 12
months of the year.
Zespri is expecting to harvest
around 19 million trays
or almost 70 tonnes of kiwifruit
from orchards throughout
Italy, France and Greece, said
chief international production
officer Sheila McCann-Morrison.
Kiwifruit grown outside
of New Zealand is currently
around 10 percent of all the
fruit sold internationally by
Zespri, but that will increase
significantly along with
demand. Zespri has around
3100 ha in the ground in
Europe, set to grow to around
5000 ha over the next five
years.
“It’s been a tough season for
some European growers this
year, with a cold wet spring
negatively affecting pollination
and issues including the
presence of the Brown Marmorated
Stink Bug and Moira
disease affecting kiwifruit and
other local produce,” she said.
“However, despite those
challenges, this season’s
It’s helping deliver
greater orchard gate
returns, jobs for
locals and is also
leading to tens of
millions of euros
being invested in
orchards and postharvest
facilities.”
Northern Hemisphere crop
is still expected to be around
the same as the record set last
year.”
And more broadly, she
added, the relationship was
working incredibly well for
both growers, post-harvest
operators and distributors, as
well as for Zespri and the New
Zealand industry.
“It’s helping deliver greater
orchard gate returns, jobs
for locals and is also leading
to tens of millions of euros
being invested in orchards
and post-harvest facilities.
It’s also helping foster further
collaboration including technical
exchange through R&D,
grower workshops and nursery
visits in New Zealand and
other general support – all of
which are helping boost production.”
McCann-Morrison said
market access was also a significant
focus for Zespri.
“We’re committed to helping
create access to new markets
for European exporters as
we have recently with Mexico,
so we’re ensuring an even
greater number of consumers
around the world can access
our premium kiwifruit.”
New Zealand forecasts
positive
In its October forecast, Zespri
chairman Bruce Cameron
advised New Zealand growers
that forecast returns have
increased for all pools on both
a per tray and per hectare basis
Nikki Johnson: industry trying to attract
more New Zealanders. Photo/Supplied
for the 2019/20 season.
• The Green return is forecast
at $6.54 per tray, with
the average per ha return of
$66,023.
• Organic Green is forecast
at $9.45 per tray, with an
average per ha return of
$61,201.
• The Gold return is forecast
at $11.41 per tray, with an
average per ha return of
$155,889.
• The Green14 forecast
return is $7.58 per tray, with
an average return per ha of
$43,088.
• The October forecast pertray
and per-hectare average
orchard gate returns are
below:
• The total fruit and service
payment, across all pools
and excluding the loyalty
premium, is currently fore-
cast at $1,892.4 million,
up by $39.2 million on the
board’s previous forecast.
Worker availability still an
issue
The board has also approved
the continuation of the Sun-
Gold licence release programme
with a further 700 ha
of unrestricted licence and 50
ha of Gold Organic licence for
2020.
New Zealand Kiwifruit
Growers Inc. (NZKGI) chief
executive Nikki Johnson told
Bay of Plenty Business News
it was too early to forecast
how the 2019/2020 season was
shaping up.
“However, if the unemployment
rate stays at its low
level, there may be issues
again around finding enough
seasonal workers for harvest,”
she said.
“With this in mind, NZKGI
is already in planning to showcase
the industry and encourage
people, with New Zealanders
as a first priority, to pick
and pack. NZKGI is becoming
better equipped to deal with
these issues with the recruitment
of a Provincial Growth
Fund (PGF)-funded labour
coordinator to manage the supply
of seasonal labour.”
More recently, NZKGI has
also recruited a PGF-funded
education coordinator to manage
horticultural careers in the
Bay of Plenty. Challenges also
remain around the building of
accommodation for seasonal
workers, and the need for new
accommodation, particularly
in the Western Bay of Plenty,
is top of mind, said Johnson.
The best time to buy a franchise
The decision to buy a franchise business will be one of the largest
decisions in most people’s lives. And like life’s other big decisions,
deciding on the right time can be challenging.
A
number of factors come
into play, and like life
in general, no two people’s
situations are identical.
From working within the
franchise sector for many
years, it has become clear to
me that there are certainly
factors that influence and those
that should be considered
when thinking about when is
the right time to buy a franchise.
One of the first things
people tend to consider is the
economic cycle. Business confidence,
or the view of where
the economy is or is heading
is important. You may be
more confident in investing in
a franchise if the economy is
looking good. And you would
probably be right.
An economy in growth
generally speaking is good
for business and a good time
for someone to invest and
operate a franchise business.
The old “a rising tide lifts all
boats” analogy.
Assess the
economic cycle
While a buoyant economy
increases the likelihood of a
new franchise business doing
well, does a slowing economy
or decaying business confidence
environment make for
poor timing? Not necessarily.
In fact, there can be a number
of reasons why it’s actually a
good time.
An upside is that weaker
economies are often accompanied
by lower interest rates,
making borrowing less expensive
and contributing towards
improved profitability and
return on investment. Coupled
with the fact that most business
owners will also have a
mortgage, they create a double
happy scenario. A franchise
may also create stability if you
FRANCHISING
> BY NATHAN BONNEY
Nathan Bonney is a director of Iridium Partners. He can be
reached at nathan@iridium.net.nz or 0275-393-022
are concerned about, or facing,
redundancy.
What about business and
consumer confidence and the
rising tide analogy with an outgoing
tide?
Well, some sectors, businesses
and franchises actually
do well and even relatively
better during economic downturns
and buying into these
during that period could be
beneficial. A couple of categories
that surged during the
GFC were casual dining and
liquor retailing.
However, I would suggest
the most important factors are
based around your personal situation.
Consideration needs to
be given to your capital base,
age and experience, energy
levels, family commitments
and support.
Age and experience will
influence not only when and
whether you have the work and
life-experience skillset to successfully
operate a franchise
business. It may also influence
how much capital you have
and are willing to risk.
If you are older, you can
perhaps not afford to risk as
much, so while you have more
capital, you may look towards
established brands and businesses
and a farmer versus
hunter approach. What are
your income and debt servicing
requirements, do you need
a certain income or are you
after longer-term capital gains?
And, how would the potential
earnings and capital gains from
a franchise compare against
your current income over time?
How much energy do you
have to commit to a new business
venture and what sort of
hours can you manage?
Any new business will
require significant initial hard
work, so there is a balance
between youth and experience.
How are your health and
energy levels?
Lastly and most importantly
for both the success of and satisfaction
from your franchise is
what are your family commitments
and the family support
structure you have in place?
You need to be able to balance
life commitments outside the
franchise as well as having the
full support of your family.
So while the economic
conditions are important, the
personal checklist of your personal
position is the critical
factor in determining when it’s
the right time for you to jump
into a franchise.