Kiwi Fruit Farming; South Africa’s Golden Opportunity
After the failure of local green kiwifruit production in the 1980s, a new group of farmers is hopeful that golden kiwis will become a South African success story. One such producer, Peter Nicholson, spoke to Susan Marais about the sector and its ambitions.
If there is one ‘Made in China’ product that is exciting consumers the world over, it’s Chinese gooseberries, also known as kiwifruit.
But perhaps it’s more accurate to say that the fruit originated in that country. While China may be the biggest producer of the fruit, it has never had much success in penetrating Western markets such as Europe.
Instead, that honour belongs to New Zealand, the country that rebranded Chinese gooseberries as ‘kiwifruit’. In the thick of the COVID-19 pandemic in 2020, kiwis were traded around the globe to the value of US$3,5 billion (around R54 billion), according to the International Trade Administration Commission (see Graph 1).
The volume of kiwifruit imported worldwide totalled 1,5 million tons, and wholesale kiwis sold at an average of US$2,38/kg (R37/kg).
Speaking at a webinar hosted by Beanstalk Global last October, Louw Pienaar, senior analyst at the Bureau for Food and Agricultural Policy (BFAP), said: “The compound annual growth rate of golden kiwis [Actinidia chinensis] over time shows a definite upward curve.”
Over the past five years, the global value of kiwis has increased by 8%; while the volume increased by only 0,7%, the price grew by 7,3%.
Research shows that there are huge opportunities for South African farmers to earn a decent slice of the global kiwifruit pie.
Historically, though, local producers haven’t had a very high opinion of kiwis as an agricultural crop, especially those who can recall the disastrous entrance of green kiwis [Actinidia deliciosa] onto the market in the mid-1980s.
“About 40 farmers planted around 100ha of green kiwis across South Africa. When all of this fruit came onto the market, consumers didn’t know what kiwifruit was, so [these farmers] weren’t able to sell it,” says Peter Nicholson, a kiwi producer from Roselands farm near Richmond, KwaZulu-Natal.
“New Zealand went through the same growing pains, but their government realised the potential of the fruit and subsidised producers as they were going through the dip. They came out of it, and today they have the second-biggest kiwi industry in the world.”
With around 190 000ha planted to kiwis, China is the only country today that has a larger industry than New Zealand’s; the latter has around 16 000ha under kiwi orchards.
“Italy has more hectares under production than New Zealand does, but New Zealand’s yields, at 40t/ha, are higher,” says Nicholson.
“There are probably only about 100ha planted to green kiwis in South Africa, while there are around 14 000ha in New Zealand.”
Nicholson inherited the only block of commercial green kiwis still available in South Africa. And even though he has more experience with green kiwis, he says the golden variety is currently the cultivar to watch.
Global and local demand
Nicholson isn’t the only one excited for the future of golden kiwifruit farming, which modern consumers find more palatable than the tart green variety.
Globally, the demand for kiwifruit is on the rise due to its health benefits. It is particularly nutrient-dense and “its vitamin C content is higher than that of any type of citrus”, according to Nicholson.
Pienaar explains that consumers’ buying habits have also changed in recent years, and they are now favouring the fruit. Retailers are currently doing large promotions, and the rise of e-commerce and rapid food-delivery systems have also benefited the industry.
“Political drives to cap unhealthy lifestyles have also aided kiwi sales; some of these include sugar and alcohol taxes,” says Pienaar. These consumer trends are true for both the global and local market, with the latter being supplied mainly by imports.
Nicholson says that South African farmers supply only a fraction of local demand, so there’s “enormous growth potential”. He adds that green kiwis are relatively inexpensive abroad, but costly on the domestic market due to a shortage of supply.
South Africa began exporting golden kiwifruit in 2018, but export volumes have remained low over the years. Last season, the country exported only 550t, mostly to the rest of Africa (68%) and the UK and EU (23%).
“There’s a lot of potential to export even more to Europe, because our route to the continent is more direct than that of our main competitors, namely New Zealand and Chile,” says Pienaar.
Pieter de Jongh, commercial manager for fresh fruit exporter Freshworld and also a speaker at the webinar, says that it was at first difficult to find markets for South Africa’s kiwis. The main reason for this was the fact that the country was not a recognised supplier of the fruit.
“These days, customers are very excited about our products, and now our biggest challenge is to increase our volumes.”
In 2010, Nicholson and a few other local farmers visited New Zealand and Australia on a study tour to learn more about the production of golden kiwifruit. In 2013, they acquired the licensing rights from Australia to grow the Skelton varieties of golden kiwifruit. Due to contractual arrangements, South Africa will never have more than 500ha under Skelton, says Nicholson; at present, there are 280ha planted to these varieties in the country.
“We’ve realised that we should cherry-pick the right growers, because we have limited hectares. We need to produce the most kiwis with the highest possible yield.”
But Skelton varieties aren’t the only option available to local kiwi growers; there are also a few Italian cultivars, as well as some from TopFruit, which specialises in importing plant material. Producers should note, however, that size does matter when it comes to kiwi production. The bigger the fruit, the bigger the payday.
“Gold kiwifruit varieties are all protected as intellectual property, therefore the number of hectares planted will always be limited. Expansion is also controlled,” says Nicholson.
He adds that the different parties within the golden kiwi industry are also working together, and this teamwork will be key to the industry’s success.
“Topfruit has set up a new company called KiwiConnection, which growers of both Skelton and Topfruit varieties can join as shareholders,” says Nicholson.
New Zealand’s kiwi crop is controlled by a company called Zespri, which releases 700ha every year for golden kiwifruit production around the world. However, in 2020 so many people wanted to plant golden kiwis that Zespri decided to auction off the licences.
“To my knowledge, this was the first time this has ever happened in fruit production anywhere in the world,” says Nicholson.
In the end, the licences were auctioned off at roughly NZ$400 000/ha (about R4 million/ha).
“This year, [Zespri] is issuing another 500ha, and then it stops. For the foreseeable future, they aren’t going to issue any more licences. The talk in New Zealand now is that the bids will hit NZ$500 000/ha (R5 million/ha).”
Kiwis can be stored comfortably for about three months. This means that there should never be a seasonal clash between South Africa and any other country (see Graph 2).
“When the Western Cape exports apples [to the European market], the last of the Northern Hemisphere’s apples are still there, but they’re six months old [at that stage] and their quality has started to decline,” explains Nicholson.
Since South Africa harvests kiwis at a time when no other country is doing so, there is a large demand for the fruit on the global market. “As a result, the prices have been [high].”
Nicholson believes that farmers’ willingness to share information with each other is the key to moving the local industry forward.
“It’s so easy to market kiwis at the moment. Aside from South Africa’s own market needs, there’s a massive supermarket chain in Europe that’s [very pleased] to have us supply them. However, we need to get more producers on board. I don’t think there’s a more exciting industry to be in at the moment.”
One of Nicholson’s favourite aspects of kiwi farming is that the crops don’t require much pesticide. “You’ll spray them only three times during the entire season, while fruit like apples need to be sprayed 25 to 28 times per season.
“You’ll probably need to spray kiwis with a fungicide when they start flowering, but that’s it. They aren’t affected by diseases like powdery mildew,” he explains.
He has also incorporated regenerative agricultural practices on the farm. Fodder crops are planted amongst the kiwis, and during winter he raises weaner calves on these crops.
Another reason that farmers might wish to consider growing kiwis is the level of productivity it can add to their farms. Athol Currie, general manager of The Fruit Farm Group’s subtropical farming operations, and also a speaker at the webinar, says that kiwis perfectly complement his company’s core business: avocado production.
“We’re mainly fruit packers in KwaZulu-Natal, where avocados are usually packed between July and December. Golden kiwis are harvested between February and March, so this gives us an additional two or three months of packing, where we used to pack for seven months of the year. It just makes financial sense to invest in kiwi production.”