Striking gold in the Eastern Bay

Zespri has got it right with its kiwifruit marketing model. PHOTO: SUPPLIED
Zespri has got it right with its kiwifruit marketing model. PHOTO: SUPPLIED
I met my husband at a wedding in Opotiki 24 years ago. I was a bridesmaid and he was a groomsman. Gin helped the beginning of the love match and a lot more than gin has helped him put up with me since!

One of his regular mutterings, especially during inclement Otago weather, has been around our choice of place to live. This has lessened over the years — he has converted to support the Highlanders instead of the Chiefs; thank goodness— he used to be an absolute embarrassment to attend games with.

The bonus of marrying an ‘‘Eastern Bay boy’’ has been regular holidays in Whakatane, Ohope and the surrounding lakes. Everything feels more relaxed here and I don’t think that is just my holiday brain speaking.

A high proportion of employment is connected directly with horticulture, agriculture and aquaculture and because of that people are down to earth and practical.

The ocean and kaimoana are part of daily life — crayfish were on the menu at the aforementioned Opotiki wedding, and at the head table, we got the best and the most — something etched into my memory almost as much as the romance!

The Eastern Bay is no stranger to agricultural and horticultural booms. Back when I was in my 20s, the dairy boom was beginning and we saw vast tracts of land in Southland and Canterbury converted from sheep and beef to dairy. The Eastern Bay already had significant dairy production, but expansion happened here, too.

That has stopped, dairy prices are recovering but the boom is history.

It is human nature that one boom is replaced by another. In the Bay of Plenty, horticulture is booming, particularly kiwifruit, but also avocado.

The kiwifruit boom has led to waiting lists for licences to grow the gold variety (SunGold). This is despite licence fees of $400,000 per hectare. Add to that the cost of buying the land and planting the vines (with a three-year production wait), and you are looking at an investment of $1 million per canopy hectare.

Return on investment varies for kiwifruit, 9%-12% for gold (including the significant licence fee) and 6%-9% for green, with no licence fees. Like dairying, the later conversions are more likely to be on marginal land.

The optimism around this industry is high to the point where people are planting gold kiwifruit vines with no guarantee of being able to purchase a licence. The plant variety rights mean that if you produce SunGold without a licence, you will be unable to sell your fruit.

The protection around the rights to grow SunGold expires in 2036 and Zespri, in partnership with Plant and Food Research, has other protectable plant varieties waiting in the wings.

There is no doubt that the Zespri management of intellectual property, licensing and marketing is an enviable model. In saying that, Chinese counterfeit fruit and growth of kiwifruit production in South America represent significant headwinds — history shows us booms do not last forever.

There are other major developments. Opotiki is developing its harbour in recognition of the growing demand for aquaculture. There is also development of a significant mussel farm and associated manufacturing infrastructure.

Further down the coast, RuaBio in Ruatoria recently listed on the New Zealand stock exchange as a world-leading medical cannabis company — it is the first NZX-listed company headquartered in Tairawhiti and the first founded by a Maori community.

Of course, development often comes at a cost. Residential house prices have gone ballistic and young people on low wages struggle to find affordable places to rent, let alone buy.

It’s exciting to see the developments in a region I have grown to love, but the challenge remains — how do we spread the riches? Maybe the Maori enterprises behind some of these developments will show the way.

 - Anna Campbell is managing director of AbacusBio Ltd, a Dunedin-based agri-technology company.

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