Blog

Rockit working hard to meet demand for mini apple.

15/May/2019


Laden with awards and phenomenal growth since its emergence in 2010, Hawke's Bay apple company Rockit Global has refreshed its market positioning and brand and is readying for its next wave of expansion.

Based on the demand for its unique mini apple in a tube, Rockit Global CEO Austin Mortimer says the company is about to see production volumes accelerate both in New Zealand and in Zespri-styled licenced operations overseas.

In addition to New Zealand, Rockit apples are currently grown in six European countries, in the US and Australia. Rockit also has plant material in South America and South Africa but is undecided on whether planting on those continents will be commercialised.

Mortimer acknowledged that managing global royalty payments is likely to become an issue as trees come to maturity, although he is confident the system is not easily manipulated. In advance of the issue arising, Rockit contracted PwC to carry out an audit in its international markets, and nothing was found to raise concerns. "Legally we are on solid ground. There is some cause to worry, but it is not unmanageable either."

As with other New Zealand fresh fruit exporters, Asia has proved to be hard to resist for Rockit. Mainland China accounts for 56% of its global sales, and there is no getting away from the company's reliance on the market.

The lucrative nature of China was no more evident than last year when Rockit carried out a soft launch of its apples as part of the official launch of the NZ food basket on Alibaba. "They told us that based on past experience we recommend you get 1,000 tubes of apples ready, which we did as well as 30% extra just in case. At 7.00pm on a Tuesday evening a celebrity started introducing Rockit and before the three-minute introduction had finished, all 1,300 tubes had been sold, at approximately NZ$8.00 a tube (three apples). This is an example of why it is very hard to walk away from China, just to diminish the exposure to one market."

While Rockit is making the most of China, it is also developing other markets. "We are going to send fruit to the US this year to reinvigorate that market which will be at the expense of margin, but it is part of our risk mitigation."

To keep up with demand Rockit has big expansion plans at its Hawkes Bay base. It has 200ha planted at this point in time and has no reason to doubt it can't get to 600ha by 2025. "The only limitation we have at the moment is one common to everyone in the industry – the availability of rootstock. It is a challenge, but we will get there."

Meanwhile other growing pains familiar to all fruit exporters are emerging for Rockit. Fraudulent use of the brand and its packaging has emerged in China, which the company has been forced tackle at significant expense. Mortimer though recognises this is just part of having IP and a global variety. "Protecting IP comes with the territory of owning it."

As much as the apples themselves, Rockit is known for its unique packaging, which is critical for its market positioning.

While consumer concern about its use of plastic and the company's sustainability credentials have emerged in some markets, Mortimer said 'no packaging' won't do it for us. "Packaging is complicated. When we launched in Japan last year packaging was not an issue, because they are so diligent at recycling. In Japan they don't want composable, or biodegradable. They want something they can recycle. We introduced cardboard packaging in New Zealand this year, which came from our German licencing because of the pushback against plastic. We are currently looking at corn-starch and paper pulp. This will suit some markets, but not others.

"Telling someone in China your packaging is compostable means nothing when they are living in an apartment block. In China food safety is critical. The reason they are paying a premium for Rockit apples is because they understand the apples were washed and packed in New Zealand and no one has touched them since. They need something they can recycle."

Get in touch

Contact
MyFarm Investments

Call 0800 MYFARM (0800 693 276)
Phone: +64 6 323 2954 | Fax +64 6 323 0599
Postal Address: PO Box 91, Feilding 4740
New Zealand
info@myfarm.co.nz

Talk with our Farm
Investment Team

Grant PaytonGrant Payton
grantp@myfarm.co.nz
029 445 5871
 
Karen RichardsonKaren Richardson
karen@myfarm.co.nz
021 262 2779
Copyright © 2018 MyFarm Investments, New Zealand, New Zealand. All rights reserved | Website by NYX | Login