New Zealand Cherries, Ready for Takeoff

New Zealand is the 9th largest exporter of cherries in the world. In 2018, the country exported 44 million USD, with most of the export going to Taiwan and China. Cherries need to be exported by airfreight, as New Zealand’s main export markets are too far away. Cherries are quite fragile and need to be handled, stored, and transported using cutting-edge technologies in order to maintain their quality during long transportation.

The export of cherries has been increasing year-on-year, but the production this year has stayed behind. According to Trophy Ridge Cherries, a New Zealand cherry exporter, the estimated production in 2019 totals around 4,000 tons, which is significantly lower than the last year’s volume due to frost damage. Almost 90% of the cherries produced in New Zealand come from the Central Otago region.

All of the company’s cherries are airfreighted. Once the Trophy Ridge Cherries' cherries leave the orchard, they are sent to the packhouse and within 48 hours, they are all packed and are flown out to the customers from either Christchurch or Auckland. The company’s packhouse uses a modern Unitec 3 machine to ensure the highest packing standard. All the cherry shipments have a thermal recorder per pallet so when the customers get the shipments, they can check that the cherries were transported at ideal temperatures.

The target markets for Trophy Ridge Cherries are Asian countries such as China, Taiwan, Hong Kong, and Vietnam. China and Taiwan are the biggest markets and they each account for 30% of the company’s exports. Of the company’s target markets, the Chinese and Vietnamese markets are growing rapidly. Due to the US-China Trade War, the US cherry exports to China decreased by 46.7% from 2017 to 2018, and the trend is expected to continue. This presents opportunities for New Zealand cherry exporters.

The main competition for New Zealand cherries are cherries from Chile and Australia, although New Zealand cherries, which are known for their high quality, are mainly targeted to high-end markets unlike those from Chile and Australia. The cherry season from Chile runs from September to February, which overlaps with New Zealand’s season, which runs from December to February. New Zealand cherries do not compete against the US or Canadian cherries, whose seasons run from May to August.

Chile has been drastically increasing its cherry exports to Asian markets such as China and Hong Kong. Chile almost doubled its cherry exports to China from 2017 to 2018. The majority of Chilean cherries reach Asian markets via ships. AS there are no direct flights from Chile to Asia, Chilean exporters have to either ship their produce the entire journey or first ship their products to the US and fly them out to Asia from there. Due to the long journey, Chilean cherries are not as fresh as cherries from New Zealand; New Zealand is closer and has direct flights to the most Asian markets including China. On average, the Chilean sea freights and airfreights are priced around 20% lower than the airfreighted cherries from New Zealand, depending on variety and size. However, New Zealand cherries have higher quality and are fresher than the Chilean sea freighted cherries. Even compared to Chilean airfreighted cherries, New Zealand cherries have higher quality and freshness.