iFAB 2013 PRODUCE REVIEW

January 2014 v1.00

iFAB 2013 The Food and Beverage Information Project What is the purpose of the food and beverage information project? iFAB 2013 The Food & Beverage Information Project is the first comprehensive overview of the state of New Zealand’s Food & The project pulls together the available information on the food Beverage (F&B) industry. Part of the Government’s Business and beverage industry into one place, in a form which is familiar Growth Agenda (BGA), it is an integrated programme of work and useful to business. The reports contain analysis and focusing on the six key inputs businesses need to succeed, grow interpretation of trends and opportunities to materially assist and add jobs; export markets, capital markets, innovation, skilled with business strategy and government policy. and safe workplaces, natural resources and infrastructure. The information will be of vital use to businesses, investors, Essentially, the BGA Export Markets goal will require lifting the government, and research institutions as the industry expands ratio of exports from today’s rate of 30% of GDP to 40% by and diversifies. This industry view will be very useful to 2025. This equates to doubling exports in real terms (or tripling government, enabling better dialogue and the opportunity to exports in nominal non-inflation adjusted terms). This in turn address issues collectively. equates to achieving a 7% per annum growth rate over the next twelve years. What benefit will this bring to businesses?

This five-year project analyses the main sectors in F&B, including The Project will have many uses for businesses. These include: dairy, meat, seafood, produce, processed foods, and beverages, as well as providing an overview of how the industry is fairing in – As a base of market intelligence to enable business to be our major markets. It also conducts in-depth sector reviews on a much more targeted in their own market research rotating basis. The information is updated annually and feedback – Reviewing and informing offshore market development from users shows the project is acting as a vital tool for (including export and investment) strategies companies looking to expand and grow exports. – Assisting in identifying areas of innovation and R&D for the future Why Food & Beverage? – Identifying strategic partners and collaborators – Enabling a company to benchmark performance with that The Food & Beverage industry is vitally important to the New of its competitors Zealand economy. Food & Beverage accounts for 56% of our – Monitoring industry activity merchandise trade exports and one in five jobs across the wider – Gaining a better understanding of their own industry value chain. In addition, F&B acts as a vital ambassador for the sector country, being in most cases the first exposure global consumers – Identifying internal capability needs or external inputs get to “Brand New Zealand.” How will government use the reports? New Zealand’s F&B exports are growing strongly and the country’s export performance is strong and improving relative to This information will provide much greater insight into the peers. In the 15 years leading up to 2010, New Zealand's food and industry, which is useful for a range of policy development, from beverage exports grew at a compound annual rate of 7% per regulatory frameworks to investment in science and skills and annum. So one way to look at the challenge is to ask – can we facilitating access to international markets. In particular, a single continue to grow our food & beverage exports at the same rate? source of factual information will enable government agencies to To understand if this is possible we need to know what has been better coordinate their efforts across the system and be more driving our success. responsive to addressing industry issues.

OTHER RELATED iFAB REPORTS IFAB 2013 This analysis of the New Zealand produce sector forms a part of the wider Food & Beverage Information Project

Other reports, including those from previous years, are available on the MBIE or Coriolis website…

http://www.med.govt.nz/sectors-industries/food-beverage/information-project/ http://www.coriolisresearch.com/reports/

3 NOTE ON DEFINITIONS IFAB 2013 The iFAB project splits the total New Zealand food & beverage industry into six separate sectors; to avoid double counting, products and firms are only defined and counted in one; some firms may be in another report

DEFINED AS PRODUCE DEFINED AS PROCESSED FOODS DEFINED AS BEVERAGES WHAT: Whole or minimally processed fruit or WHAT: Products made from a mixture or WHAT: Juice, fermented or not, made from a vegetables; firms that predominantly pack these combination of ingredients, rather a single single fruit or vegetable or a mixture or products ingredient; firms that predominantly make these combination of ingredients; water products Ingredients: Reconstituted vegetable Ingredients: Tomatoes juice blend (water and concentrated Ingredients: Concentrated Tomatoes, juices of tomatoes, carrots, celery, beets, Sugar, Salt, Concentrated White Vinegar, parsley, lettuce, watercress, spinach), Food Acid (Citric Acid), Natural Flavours contains less than 2% of: salt, vitamin c (Contains Garlic), Spices (ascorbic acid), natural flavoring, citric acid, natural flavor. EXAMPLES: Kiwifruit, apples, blueberries, EXAMPLES: Chocolate, ice cream, retail-ready EXAMPLES: Beer, wine, soft drinks, bottled onions, other fruit and vegetables infant formula, frozen croissants, Milo & similar, water, kiwifruit juice Anlene and other similar dairy nutritionals TRADE CODES: Primarily classified in the global TRADE CODES: Primarily classified in the global TRADE CODES: Primarily classified in the global Harmonised Standard trade codes as HS07/08 Harmonised Standard trade codes as HS 16-21 Harmonised Standard trade codes as HS22/2009 EXAMPLE FIRMS: EXAMPLE FIRMS: EXAMPLE FIRMS:

SEE RELATED REPORT SEE RELATED REPORT THIS REPORT

4 iFAB 2013 BENCHMARK – EXPORT GROWTH BY SECTOR IFAB 2013 In 2012 the value of New Zealand’s produce exports declined and the industry performed poorly relative to most other sectors

ANNUAL CHANGE IN EXPORT VALUE BY TYPE PERCENT CHANGE IN EXPORT VALUE BY TYPE US$m; 2012 vs. 2011 %; US$m; 2012 vs. 2011

CORE F&B CATEGORIES

Beverage $117 Other Foods 23%

Processed Food $66 Pet & Animal Foods 14%

Seafood $51 Beverage 10%

Pet & Animal Foods $35 Seafood 4%

Other Foods $35 Net Processed Food 4% Core F&B Dairy -$23 +$67m Dairy 0%

Produce -$36 Produce -2%

Meat -$180 Meat -4%

F&B RELATED CATEGORIES

Seed for sowing $30 Fertilisers 57%

Live Animals $27 Tobacco 48%

Tobacco $16 Supplements 33%

Supplements $3 Seed for sowing 28%

Fertilisers $3 Live Animals 15%

HBC/Household -$2 HBC/Household -1% Net Pharmaceuticals -$7 Related F&B Pharmaceuticals -3% +$70m

Source: UN Comtrade database; Coriolis classification and analysis 6 PRODUCE – SITUATION IFAB 2013 New Zealand is a major producer and exporter of kiwifruit and apples but has limited scale elsewhere; the industry is currently undergoing consolidation to increase scale and productivity

New Zealand nearest global kiwifruit competitor.

New Zealand has a climate conducive to horticulture, particularly high The recent Psa-V outbreak has impacted the industry, but strong quality fruit production. New Zealand, surrounded by the Pacific industry coherence and coordination has led to an effective response. Ocean, has the light of Spain with the climate of Bordeaux. This The worst of the crisis appears over and industry is moving forward. climate will also moderate the effects of global warming going Apples forward (relative to large continents).

The country’s farmers are highly productive and efficient. The country The apple industry is highly competitive and undergoing rapid has no agricultural subsidies and regulation is rational and light consolidation around large grower/packer/shippers; the top 8 handed, however additional compliance costs are imposed by markets packhouse operators account for about two thirds of volume. and retailers around the world, increasing total cost. Packhouses are backwards integrating into production to ensure supply and quality. More than a third of total apple area is now New Zealand has two significant export species, kiwifruit and apples, controlled by the top 10 packers. that together account for over 70% of the export value of fresh produce. The number of smaller family orchards has decreased and area has fallen significantly over the last 10 years. Despite this production has Kiwifruit been maintained due to increased productivity; in other words, inefficient growers are going out of business and good ones are While the yáng táo is native to China, New Zealand was the first getting stronger. country to commercialise the kiwifruit (and gave it its common name). This early innovation, and ongoing investment, has created Other fruit significant competitive advantage for New Zealand in kiwifruit and the country is now the third largest producer globally. While New Zealand produces a wide range of other fruits and nuts, only a few are achieving any significant growth; avocados, cherries Kiwifruit are primarily packed by grower-owned co-operatives. These and blueberries stand out for generally positive metrics. are consolidating rapidly driven by the increased capital cost of a packhouse (equipment, technology, etc.). The top eight packers now Vegetables account for 80%+ of volume. “Fresh” vegetable exports are primarily onions, squash and capsicums. New Zealand is a mid-sized producer of vegetables for Most kiwifruit (except those to Australia or under a collaborative processing and export. Significantly transformed vegetable products marketing agreement) are exported through Zespri, a grower-owned are covered in the related processed foods documents. monopsony1; this structure is strongly supported by growers but challenged by competing fruit exporters; Zespri is ~13x larger than its

1. Monopsony = monopoly on buying not selling 7 PRODUCE – SITUATION IFAB 2013 Chile is the key competitor in fruit (both apples and kiwifruit); there are still a lot of growth opportunities available for New Zealand into Asia across all fruit & vegetables

Competitors New Zealand has a strong track record of innovation and new product development in fruit. However, new varieties continue to be In fresh, New Zealand competes in the first instance with other developed by other competitors, for example: temperate countries in the S.H. seasonal window: Australia, Chile, Argentina, South Africa & Southern Brazil. Secondarily, the S.H. - Summerkiwi, Kiwigold/Jingold, and Greenlight among many competes on the edges, with N.H. temperate production. others in kiwifruit Global production of most fruit & vegetables (F&V) is relatively - Kanzai, Honeycrisp, Cameo among many others in apples stable; the major exception is China which has dramatically increased its production of most major F&V over the past 20 years. The impact of Chinese production growth has primarily been felt in some Consumers/Markets processed products (e.g. apple juice concentrate) rather than premium fresh F&V. Chinese yields are still low and quality is an Broadly speaking, the world can be separated into temperate and issue; this will change over the next 20 years as systems and tropical production regions. Produce consumption varies strongly by processes improve. region and, as a general rule, people (and countries) generally cook and consume what they produce. Therefore, for most fruits and Very few fresh vegetables cross borders; most are produced and vegetables, the major producing countries are the major consuming consumed in their country of origin; cross-border trade is more countries and also the major counter-seasonal importers (where common in preserved/processed vegetables, particularly from relevant). temperate regions to tropical ones. In processed vegetables, New Zealand competes primarily with rich Northern Hemisphere countries In this environment, China represents an opportunity not a threat for (e.g. Netherlands, Canada). Fruit crosses borders more often. New Zealand in premium counter-seasonal supply for the foreseeable future. China is now New Zealand’s fifth largest export market for Globally, fresh fruit and vegetable packing is extremely fragmented produce and was the fastest growing last year. with a huge number of medium-to-small packers operating. Firms of any scale only exist around key tropical fruits (bananas and South East Asian markets are a rapidly growing opportunity (e.g. pineapples). New Zealand packhouses compete primarily with either Indonesia, Thailand, Philippines, Vietnam) as they are pure importers co-operative or family-owned packhouses in other countries. of temperate fruits and vegetables. Per capita consumption evidence from the richer countries of the region (Singapore, Malaysia and Fruit and vegetable preserving and processing is more consolidated, Taiwan) suggest significant further growth potential exists in the driven by economies of scale in processing equipment. poorer countries as they grow richer.

Source: Coriolis 8 PRODUCE – SWOT ANALYSIS IFAB 2013 Future growth and success is dependant on continued innovation around new varieties and cultivars and improvements in industry structure

STRENGTHS WEAKNESSES

- Track record of success in new fruit development (e.g. kiwifruit) - Low/no ability to supply fruit year-round - Track record of success in breeding of new cultivars (e.g. Braeburn, Zespri Gold) - Water, access and availability - Counter seasonal to Northern Hemisphere in a narrow climatic window only shared by 4-5 - Higher cost structure than others in seasonal window (e.g. Chile) competitors (Chile, Argentina, South Africa, Southern Brazil and Australia) - Too much area still in older varieties (e.g. Braeburn apples, Hayward kiwifruit) that are now - Proximity to fast growing Asian markets widely produced by competitors and not IP-controlled - Strong biosecurity; free from many diseases and pests - Many smaller orchards and farms; peer group benchmarking strongly suggests NZ needs fewer, larger farms - High yields per hectare/high levels of export packout in export fruits relative to peers - Failing to collectively nurture emerging Horizon 2 products to scale (e.g. avocados) - Unsubsidised industry competing successfully in world markets - Poor current funding model for new cultivar development - Industry rapidly consolidating into fewer, larger growers operating at scale - Poor current commercialisation model for new cultivars emerging from breeding programs - Transition to integrated grower/packer/shipper model underway - Legal separation of apple and kiwifruit exporting (also a strength depending on point-of-view) - Supportive, collective industry structure in kiwifruit - Small scale niche sectors, limits availability of key agrichemicals available OPPORTUNITIES ISSUES/THREATS/RISKS

- Further develop “Fresh” fruit, especially high value, high return fruits (e.g. berries) - Growing production of apples, kiwifruit and other horticulture in China - Continued growth of middle-class in Asia - Further disease outbreaks (cf. PSA) - Aging baby boomers focusing on healthy living eating for illness prevention - The risk of disease outbreaks must be balanced with the biosecurity retarding or preventing introduction of new genetics and new species - Growth of nutraceuticals and functional foods; fruits as “superfoods” - Other countries phytosanitary protocols limiting extent and speed to market, particularly - Potential of the Australian market Australia - Continued work on FTAs to develop tariff free markets (e.g. ASEAN); especially focussing on - Re-export of produce labelled “Made in New Zealand” endangering NZ reputation the high volume, high impact products and markets - Climatic conditions impact production rates - Growing demand for fresh, convenient produce especially into Asian markets - Other global centres of fruit development coming up with better products - Continued orchard-level technological innovation (e.g. Hi-Cane) and management improvement (e.g. girdling) leading to increased yields, automated pruning

Source: various company annual reports; various company websites; Interviews; Coriolis 9 PRODUCE – POTENTIAL AREAS FOR INVESTMENT IFAB 2013 Opportunities for new and/or external investment primarily for those with transferrable skills or global networks

Apples Kiwifruit less advanced than apples in new IP-controlled variety Industry has consolidated around two key regions: Hawkes Bay and development. Nelson; opportunities outside these regions are less clear. - Zespri Gold kiwifruit a strong success for New Zealand Two largest apples exporters have changed hands recently: and doing well in Asia. - #2 Mr Apple to Direct Capital - Other recent new varieties appear to represent #1 T&G/ENZA to BayWa improvements (e.g. Green 14) and are yet to be proven - either in production economics or the market (cf. Tomua1). Opportunities for further consolidation among smaller packhouses, particularly around regional consolidation. - Lack of red variety key failure of breeding program to date. New emerging third generation IP-controlled varieties have high potential for growth, particularly in Asia. Other fruit and nuts - New Zealand has a strong track record of developing International investors with strong transferrable skills in the avocado successful new varieties of apples; for example NZ sector could help the industry realise its potential. developed Gala and Braeburn now account for one in six Berries have clear opportunities for growth but long run potential is apple trees planted globally (outside China). unclear; investors with transferrable skills should explore. Olives are a marginal activity due to lack of scale and huge plantings Kiwifruit elsewhere due to high EU subsidies (cf. Spain). Industry consolidated around Bay of Plenty region; opportunities Wide range of other fruit and nuts that have yet to demonstrate clear outside this region are more speculative. market success. Industry almost totally grower-controlled, limiting opportunity for outside investor participation; further packhouse consolidation highly Vegetables probable going forward. Strong opportunities for further investment by major global value- Current Zespri structure severely limits ability of new investors (e.g. added vegetable processors. Dole, Chiquita, T&G) from exporting outside the system; participation NZ strongly competitive with key temperate producer/exporters such in the New Zealand kiwifruit industry is effectively participation in the as the Netherlands, Canada, the US, France, etc.; EU producers should Zespri system. consider NZ as an Asia-Pacific production base. Low/no likelihood of change in structure in short to medium term due to strong grower support and five years of industry turmoil required for transition to an open system.

1. Tomua was a green variant launched in the late 90’s that failed 10 PRODUCE – SUPPLY CHAIN IFAB 2013 New Zealand fruit and vegetables either travel to the consumer in a fresh/whole form or are processed; processed foods range from simple preservation (e.g. whole frozen) through to total conversion (e.g. wine)

SIMPLIFIED MODEL OF NEW ZEALAND FRUIT & VEGETABLE SUPPLY CHAIN Model; ANZSIC codes as available

Domestic Supermarkets Vegetable market growing & other retail (A021)

Kiwifruit Fruit & vegetable Distributor Greengrocers growing wholesale wholesaler (A013-200 (F360-500)

Apple/pear Fruit & vegetable Fruit & vegetable Foodservice growing fresh packhouse coolstore (A013-400) (C114) (C114)

Stonefruit Fruit & vegetable growing processing Seafreight F&V Supermarkets (A013-500) (C114) Airfreight wholesale2 & other retail (in-market) Citrus growing Foodservice International (A013-600) markets

Other fruit & Processed/other nut growing foods Processed (rem. A013) (Other C121) Foods Processed/other foods Processed Foods Grape Wine making (Other C121) growing (C121-400) Beverages (A013-100)

1. Statistics do not differentiate between packhouses, coolstores and processors (for example, a fresh apple export packhouse and a factory canning peas); 2. There may be one or more layers of wholesaling, depending on product or market; some wholesale functions maybe captive inside retailers or foodservice operators; Source: Coriolis 11 iFAB 2013 GLOBAL PRODUCE PRODUCTION BY TYPE IFAB 2013 Global produce production is growing; vegetables and melons leading growth, while root crops are declining on a per capita consumption basis

GLOBAL PRODUCE PRODUCTION BY TYPE 50 YEAR GLOBAL PRODUCE PRODUCTION BY TYPE 50y Tonnes; million; 2011 Tonnes; million; 1961-2011 CAGR* 2,500

50y Fruit 2.6% 2,000 CAGR 2.2% Melons 3.4%

1,500

Vegetables 3.2% Fruit 1,000 638 25% 500 Vegetables Root crops 1.2% 956 - 38% 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

Total = 1 Melons 2,539m tonnes 50 YEAR GLOBAL PRODUCE CONSUMPTION PER CAPITA 134 Kilograms/person; 1961-2011 50y 5% CAGR 350 0.6% Fruit 1.0% 300 Melons 1.8% 250

200 Root crops Vegetables 1.5% 811 150 32% 100

50 Root crops -0.5%

- 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009

1. Data is apparent consumption (aka. disappearance) in all forms; will include waste, shrinkage and post harvest loss; Note: 2011 is latest data available for all countries globally in FAO Agstat as of October 2013; * CAGR = Compound annual growth rate; Source: UN FAO AgStat database; Coriolis analysis 13 GLOBAL PRODUCE PRODUCTION BY REGION IFAB 2013 New Zealand produces 0.1% of total global produce (fruit & vegetables); global production growth being driven by China and the developing world

GLOBAL PRODUCE PRODUCTION BY KEY COUNTRIES & REGION 50 YEAR PRODUCE PRODUCTION BY REGION Tonnes; million; 2011 Tonnes; million; 1961-2011 50y CAGR Italy 33 1% Russia 52 2% 2,539 Spain 31 1% France 23 1% 337 SS Africa 3% 50y SS Africa 337 13% Other Europe CAGR 211 8% 185 NA/ME/CA 4% 2% 1,974 Canada 7 0% USA Australia 6 0.2% 239 274 S Asia 4% Europe/Russia 82 3% New Zealand 3 0.1% NA/ME/CA 185 7% 14% Pacific Islands 5 0% 122 165 SE Asia 3% N America Brazil 83 3% 4% 178 45 Other E Asia 1% Other Asia 42 2% 1,403 C/S America Other C/S America 115 Total = 9% 134 5% 173 51 S Asia 2,539m tonnes 1,180 11% 78 India 232 9% 1,035 111 118 864 China 4% 56 93 98 89 631 SE Asia 853 37 49 7% 65 80 70 46 48 Other SE Asia 26 44 43 294 74 3% E Asia 39 204 36% 35 177 150 186 217 C/S America 2% 108 123 149 Thailand 37 1% 71 7 8 63 72 10 14 13 Australasia 2% Other E Asia 54 5 81 95 90 N America 1% Indonesia 55 2% 45 2% China 864 34% 360 390 389 358 345 348 Europe -0.1%

1961 1971 1981 1991 2001 2011

Note: 2011 is latest data available for all countries globally in FAO Agstat as of October 2013; Source: UN FAO AgStat database; Coriolis analysis 14 VEGETABLE – GLOBAL PRODUCTION IFAB 2013 Global vegetable consumption is fragmented, with a wide range of vegetables being produced worldwide

TOTAL GLOBAL VEGETABLE PRODUCTION BY TYPE/GROUP 50Y GLOBAL VEGETABLE PRODUCTION BY TYPE/GROUP 50y Tonnes; million; 2011 Tonnes; million; 1961-2011 CAGR (61-11)

1,901 2.4%

134 Melons 3.4%

Melons 134 7% Potatoes 373 1,496 461 Other vegetables 3.0% 20% 107

Other vegetables 461 30 Peppers/chillies 3.3% 24% 36 Carrots/turnips 3.7% 356 47 Eggplant 3.9% 65 Cucumbers 3.9% Total = Cassava 1,049 69 Cabbage/brassic. 2.2% 1,901m tonnes 256 49 2221 91 Onions 3.6% 13% 27 883 40 216 72 159 Tomatoes 3.6% 793 37 55 19 29 11 Other root crops 2.1% Peppers/chillies 146 1412 Yams/S Potato 678 18 108 30 2% 118 8 40 162 Yams/S.Potato 0.8% 162 25 14119 34 18 Carrots/turnips 9% 687 37 36 2% 103 2811 25 76 Onions Tomatoes 19 54 11 176 Eggplant 6 38 91 159 107 9 8 47 2% 2315 151 256 Cassava 2.6% 5% 8% 28 7 143 138 182 Cucumbers 107 65 3% 99 128 161 Cabbage/ Other root crops 19 71 brassicas 1% 69 4% 373 Potatoes 0.6% 311 271 279 268 258

1961 1971 1981 1991 2001 2011

Source: UN FAO database (custom job); Coriolis analysis 15 FRUIT – GLOBAL PRODUCTION IFAB 2013 Global fruit production is dominated by a handful of major fruit: bananas, citrus, apples/pears and grapes

TOTAL GLOBAL FRUIT PRODUCTION BY FRUIT TYPE/GROUP 50Y GLOBAL FRUIT PRODUCTION BY TYPE/GROUP Tonnes; million; 2011 Tonnes; million; 1961-2011 50y Pineapples CAGR (61-11) Guavas/ 22 3% 3% mangoes 638 39 6% 22 Pineapples 4% Guavas/ 51 3% mangoes Apples Pears 25 4% 75 12% 478 145 Bananas 3% 16 Stonefruit 34 37 6% Kiwifruit 1 0% Bananas 145 354 99 23% Total = 12 131 Citrus 3% 638m tonnes Grapes 22 69 297 11% 9 18 76 105 242 82 Other fruit 3% 6 60 14 Other fruit 82 82 175 53 62 Citrus 4 61 Grapes (incl. wine) 1% 13% 12 69 131 42 34 42 1 20% 31 61 1 Kiwifruit 13% Stonefruit 2% 25 25 37 1 21 62 56 26 25 Pears 3% 54 17 43 0 1 0 15 18 14 9 9 75 Apples 3% 13 - 8 57 6 36 17 27 33 Total = 594m tonnes 1961 1971 1981 1991 2001 2011

1. 30y CAGR; Notes: bananas includes plantains; guavas/mangoes includes papaya; stonefruit includes apricots, plums, sloes and other stone fruit; Source: UN FAO database (custom job); Coriolis analysis 16 TOP PRODUCING COUNTRIES – KIWIFRUIT & APPLES IFAB 2013 New Zealand is the third largest kiwifruit producer and the 26th largest apple producer

TOP 20 KIWIFRUIT PRODUCERS TOP 26 APPLE PRODUCERS Tonnes; 000; 2011 Tonnes; million; 2011 PRODUCTION 10Y CAGR PRODUCTION 10Y CAGR

China 600 China 15% China 36.0 China 6% Italy 432 Italy 3% USA 4.3 USA 0% India 2.9 India 9% New Zealand 420 New Zealand 4% Turkey 2.7 Turkey 1% Chile 237 Chile 6% Poland 2.5 Poland 0% Greece 140 Greece 13% Italy 2.4 Italy 0% France 73 France -1% France 1.9 France -3% Iran 1.7 Iran -3% USA 34 USA 4% Brazil 1.3 Brazil 6% Iran 32 Iran 4% Russia 1.2 Russia -3% Turkey 29 Turkey 29% Chile 1.2 Chile 0% Argentina 1.1 Argentina -2% Japan 26 Japan -5% Ukraine 1.0 Ukraine 7% Portugal 23 Portugal 12% Germany 0.9 Germany 0% Spain 23 Spain 6% South Africa 0.8 South Africa 3% Uzbekistan 0.8 Uzbekistan 6% South Korea 10 South Korea -3% North Korea 0.8 North Korea 1% Israel 4 Israel 8% Spain 0.7 Spain -3% Australia 3 Australia -3% Japan 0.7 Japan -3% Mexico Mexico Switzerland 1 Switzerland 7% 0.6 4% Romania 0.6 Romania 2% Montenegro 1 Montenegro 0% Pakistan 0.6 Pakistan 5% Kyrgyzstan 0 Kyrgyzstan 1% Austria 0.5 Austria 3% Slovenia 0 Slovenia 0% Morocco 0.5 Morocco 8% Egypt 0.5 Egypt 0% Cyprus 0 Cyprus-9% New Zealand 0.4 New Zealand -1%

Source: UN FAO database (custom job); China is Coriolis from a range of sources; Coriolis analysis 17 iFAB 2013 KEY PRODUCTION METRICS IFAB 2013 The amount of area in New Zealand in fruit and vegetables has been relatively stable over the past decade, other than wine grapes

TOTAL NEW ZEALAND HECTARES IN PRODUCE TOTAL NEW ZEALAND HECTARES IN PRODUCE Hectare; 2012 or as available Hectare; 1961-2012

140

120 Wine grapes 100 Potatoes Other fruit 911 1% 11,700 Peas 80 Fruit Citrus 999 1% 12% 11,000 Nuts 1,484 2% 11% 60 Melons Summerfr 1,830 2% Olives 2,173 2% Squash 40 7,200 Vegetables Berryfruit 2,785 3% 7% 20

-

Avocados 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Vegetables Sweetcorn 4,550 62,888 5,800 5% Total = 64% 6% Pears 441 0% Fruit & nuts 98,923 ha 10Y CAGR OF AREA IN HECTARES IN PRODUCE BY KEY SPECIES 35,999 Onions CAGR% change in hectare; 2002-2012 Apples 36% 5,400 8,324 5% 8% Kiwifruit 2% Apples -4% Pears -8% Avocados 4% Berryfruit 0% Kiwifruit Olives -2% 12,502 Other veg. 13% 21,788 Summperfruit -5% 22% Nuts -2% Citrus -7% Other fruit 13%

Potatoes 1% Peas WINE GRAPES PRIMARILY DEALT WITH 3% IN BEVERAGES DOCUMENT; SEE THAT Squash 1% FOR MORE DETAILS ON WINE GRAPES Sweetcorn -1% Onions 1% Other vegetables -1%

Source: Plant & Food FreshFacts; UN FAO AgStat database; MAF/MPI; Coriolis analysis 19 KEY PRODUCTION METRICS IFAB 2013 While area is down, total production is more flat driven by greater productivity through yield increases

TOTAL NEW ZEALAND PRODUCE PRODUCTION TOTAL NEW ZEALAND PRODUCE PRODUCTION Tonnes; 000; 2012 or as available Tonnes; 000; 1961-2012 3,000

2,500 Wine grapes

2,000 Other vegetables Kiwi fruit Fruit 403 420 17% 18% 1,500

1,000

Vegetables 500 Onions 179 Fruit 7% - 995 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 42% Sweetcorn Total = 82 2,392 tonnes (000) Apples Vegetables 10Y CAGR OF PRODUCTION IN PRODUCE BY KEY SPECIES 3% 438 1,397 18% % of tonnes; 2002-2012 58% Squash 141 Kiwi fruit 4% 6% Apples -1% Pears -2% Peas 70 Avocados 4% 3% Berryfruit 5% Olives 0% Pears 27 1% Summerfruit -1% Avocados 19 1% Citrus 3% Potatoes Berryfruit 21 1% 522 Other fruit -6% 22% Olives 2 0% Summerfru 23 1% Potatoes 0% Citrus 29 1% Peas -1% WINE GRAPES PRIMARILY DEALT WITH Other Fruit 16 1% Squash -1% IN BEVERAGES DOCUMENT; SEE THAT Sweetcorn -2% FOR MORE DETAILS ON WINE GRAPES Onions -3% Other vegetables -1%

Source: Plant & Food FreshFacts; UN FAO AgStat database; MAF/MPI; Coriolis analysis 20 iFAB 2013 NUMBER OF FIRMS IFAB 2013 The number of produce processing & wholesaling firms was declining, but appears to have stabilised since 2010

NUMBER OF PRODUCE PROCESSING & WHOLESALING ENTERPRISES CHANGE IN NUMBER OF PRODUCE PROCESSING ENTERPRISES Enterprises; 2002-2012 CAGR; absolute change; periods as given

395 397 392 385 376 375 0% CAGR 10y -5 ABS 10y 352 356 345 341 347

-2% CAGR 5y -38 ABS 5y

2% CAGR 1y 6 ABS 1y

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Note: 2012 data latest available as of October 2013; 1. Defined as C114 Fruit & Vegetable Processing & F360500 Fruit and Vegetable Wholesaling; Source: Statistics NZ business demographics database; Coriolis analysis 22 iFAB TOP TEN PRODUCE FIRM TURNOVER FY12 IFAB 2013 Zespri continues as the largest produce firm in New Zealand

ANNUAL TURNOVER BY TOP 10 PRODUCE FIRMS NZ$m; FY2012

Zespri 1 $1,487

T&G 2 $669

MG Marketing 3 $534

Mr Apple 4 $227

Fresh Direct 5 $200*

A.S. Wilcox 6 $200*

Leaderbrand 7 $140*

Balle Bros 8 $130

Eastpack Satara 9 $130

Freshmax 10 $120

* Estimate; Note: Eastpack Satara is post merger Prorata Source: various company annual reports; NZCO; Coriolis estimates and analysis 23 iFAB TOP TEN PRODUCE TURNOVER GROWTH FY12 IFAB 2013 In FY12 Zespri led the absolute growth followed by Balle Bros through its acquisition of Mr Chips then Eastpack (through its merger with Satara)

CHANGE IN ANNUAL TURNOVER BY TOP 10 PRODUCE FIRMS ANNUAL TURNOVER % GROWTH BY TOP 10 PRODUCE FIRMS NZ$m; FY2012 vs. FY2011 NZ$m; FY2012 vs. FY 2011

Zespri 1 $72 Balle Bros 1 73%

Balle Bros 2 $55 Eastpack Satara 2 61%

Eastpack Satara 3 $49 T&G 3 4%

T&G $24 Mr Apple 2%

Mr Apple $4 Zespri -3%

Freshmax -$5 Freshmax -4%

MG Marketing -$24 MG Marketing -4%

Fresh Direct Fresh Direct No data No data A.S. Wilcox A.S. Wilcox

Leaderbrand Leaderbrand

Source: various company annual reports; NZCO; Coriolis estimates and analysis 24 KEY PRODUCTION METRICS IFAB 2013 Produce processing & wholesaling employment was trending down - suggesting productivity improvements – but employment has now grown for the past two year

TOTAL EMPLOYMENT BY F&V PROCESSING & WHOLESALING ENTERPRISES CHANGE IN F&V PROCESSING & WHOLESALING EMPLOYMENT Headcount; as of Feb; 2002-2012 CAGR; Absolute change; periods as given

9,130 9,060 8,970 8,740 8,770 8,380 -1% CAGR 10y -750 ABS 10y 8,210 8,200 8,170 7,990 7,660

0% CAGR 5y 170 ABS 5y

3% CAGR 1y 210 ABS 1y

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Note: 2012 data latest available as of October 2013; 1. Defined as C114 Fruit & Vegetable Processing & F360500 Fruit and Vegetable Wholesaling; Source: Statistics NZ business demographics database; Coriolis analysis 25 EMPLOYMENT BY REGION IFAB 2013 Produce processing employment growing in Auckland, BOP and the South Island but declining in Hawkes Bay/Gisborne

PRODUCE PROCESSING EMPLOYMENT BY REGION 5 YEAR CHANGE IN EMPLOYMENT BY REGION Headcount; as of Feb; 2007-2012 CAGR; Absolute change; 2007-2012

8,380 8,210 8,200 8,170 89 Classified elsewhere 7,990 57 143 Northland 216 159 Clasified elsewhere -127 175 563 270 7,660 139 136 154 156 2,070 Auckland Northland -32 1,790 1,920 1,900 1,920 2,000 Auckland 280

165 160 175 Waikato 360 520 520 Bay of Plenty Waikato 10 195 170 430 450 195 420 BOP 160

2,405 Hawkes Bay/Gisborne 2,890 2,480 HB/Gisb -485 2,465 2,515 2,185 Wel/Mana/Tara -129

453 500 Wellington/Manawatu/Taranaki M 53 407 420 629 400 373 383 Marlborough 333 390 330 370 480 Nelson/Tasman/West Coast 300 623 N/T/WC 200 280 318 278

1,210 1,410 Canterbury Canterbury 240 1,170 1,140 1,310 1,160

349 205 210 152 265 205 Otago/Southland Otago/Southland - 2007 2008 2009 2010 2011 2012

1. Data is geographic level; “classified elsewhere” include non-produce processing & wholesaling activities (e.g. retail); Source: Statistics NZ business demographics database; Coriolis analysis 26 EMPLOYMENT BY FIRM IFAB 2013 The top ten produce wholesalers and processors account for just over half of industry employment

PRODUCE PROCESSING EMPLOYMENT BY KEY FIRM Headcount; 2012, 2013 Data should be treated with caution as: 1. Many firms have large seasonal workforces (not captured in this number in all cases) 2. Some firms have subsidiaries that are classified as farming (e.g. T&G’s Status tomato growing operations) Therefore the total here may over-or-understate their relative importance in sector employment

Total Industry employment is calculated by Statistics New Zealand from PAYE data and should be seen as the number of PAYE individuals attached to a particular firm and may include double T&G counting (i.e. someone who worked at two firms). Employees of 2,000 labour contractors are classified elsewhere and not included in this 24% total.

Examples

Other Select Companies Headcount Seasonal 3,940 Total = 47% 8,380 MG Marketing 320 Mr Apple 220 1,700 4% Eastpack/Satara 250 2,000 Balle Bros 350 4% Leaderbrand 187 300

Fresh Direct 300 3% Seeka 163 2,000

Leaderbrand 300 4%

Freshmax 280 3% Eastpack Zespri A.S. Wilcox Mr Apple 170 Satara 250 220 3% 2% 3% 250 3% Source: SNZ business demographics; Kompass; various firm websites; published articles; Coriolis interviews & analysis 27 iFAB TOP FOUR NEW PRODUCE INVESTMENT IFAB 2013 Four major recent investments in new produce industry capital have been identified

IDENTIFIED MAJOR INVESTMENTS IN NEW PLANT/EQUIPMENT As of October 2013

Rank Announced Investment Firm Facility Location Opened/planned

1 2012 $19m T&G Range of capital investment including Nelson n/a new fruit ingredients factory for ENZA Foods and Nelson coldstore upgrade 2 2011 $15m Eastpack Two new coolstores in Te Puke and Bay of Plenty 2011 Edgecumbe & fruit grader 3 2012 n/a Southern Paprika Commissioned additional 4ha of Warkworth, Auckland 2013 Est glasshouse for capsicum production 4 Sept 2013 n/a Seeka Kiwifruit New coolstore facility partnering with in- Southern Malaysia 2014 Est market logistics and distributor firms AQV, Metspan and Terminal Access

Source: Coriolis from various published articles and annual reports 28 iFAB TOP TEN PRODUCE ACQUISITIONS IFAB 2013 A wide range of acquisitions has occurred in the produce industry, primarily driving industry consolidation

IDENTIFIED MAJOR ACQUISITIONS INVOLVING NEW ZEALAND PRODUCE FIRMS As of October 2013

Rank Acquirer Target Price (or net Date Details assets) 1 BayWa Turners & Growers (T&G) $157m for March 2012 BayWa acquires 72.5% of T&T from Guinness Peat Group Aktiengesellschaf 72.5% 2 Eastpack / Satara Eastpack / Satara merger $59m (net March 2013 Merger of the #1 and #2 postharvest kiwifruit and avocado companies; assets) Satara will delist and the new company will be called EastPack 3 Direct Capital 79% of Scales (Mr Apple) $44m 2011 Acquired South Canterbury Finance's 79% stake in Scales Includes Mr Apple, Meateor Foods, Whakatu Coldstores, Logistsics 4 Balle Bros Mr Chips (Simplot AU) $29.5m (net August 2013 Mr Chips NZ with 130 staff, 2 factories (Auckland; Christchurch), 80,000 assets FY12) tonnes capacity, 60% domestic/40% exported to AU; revenue in 2012 $56.2m 5 T&G Delica $25.8m May 2013 Acquired the remaining 30% of shares it did not own 6 Port of Tauranga Satara’s Totara St Coolstore $8.6m 2010 Port of Tauranga purchases former Satara coolstore and 2ha site 7 Scales/Mr Apple 4% of T&G ~$8m 2011 Exercised option to acquire another 4% of T&G giving it 10.3% (enough to block full takeover by BayWa) 8 Golden State Foods Groenz Group - Feb 2013 Salad packer/processor acquires majority ownership of Groenz, extending its sauces range in the foodservice sector 9 Scales/Mr Apple 50% Fernridge $2m 2012 Acquired 50% of a major Hawkes Bay apple producer 10 Apata Ltd 33% share in Primor $1.5m June 2011 Acquired share to strengthen relationship between postharvest and marketing Produce in avocados

Source: Coriolis from various published articles and annual reports 29 FOREIGN INVESTORS IFAB 2013 The acquisition of 73% of T&G by Baywa of Germany has been the major foreign investment in the New Zealand produce industry recently

FOREIGN INVESTMENT IN MAJOR NEW ZEALAND PRODUCE FIRMS As of October 2013

Date Investor Origin Investment Investor description

Mar 2012 BayWa Germany Acquires Guiness Peat Groups 63% for German company founded in 1923 operating in Agriculture, building Aktiengesellschaft $137m; acquired total of 73.07% of T&G materials and energy sectors, spread across 14 countries 2011 Maui Capital New Zealand Acquired Wolseley’s share of Freshmax Gp New Zealand private equity firm acquires Australian private equity Via Australia ~60% firm’s share in an Australian company based in New Zealand 2006 Wolseley Private Australia Freshmax NZ PE company based in Australia; investment to develop fresh Equity produce platform in Australia, on-going acquisitions 2009 Golden State Foods USA Acquired Essentia Foods (packaged salads) Major global foodservice supplier; major McDonalds supplier

TBD Beheermaatschappij Netherlands 50% of Southern Paprika Major Dutch capsicum supplier Legmeerpolder B.V.

Source: Coriolis from various published articles and annual reports 30 iFAB 2013 TOP 10 (+1) PRODUCE FIRM PROFILES IFAB 2013 1 2 3 4 ZESPRI INTERNATIONAL TURNERS & GROWERS MG MARKETING BALLE BROS GROUP

Lain Jager Alastair Hulbert Peter Hendry Dacey Balle Chief Executive Officer Chief Executive Officer Chief Executive Officer Managing Director

DESCRIPTION: Exporter and marketer of Kiwifruit, DESCRIPTION: Grows, processes, a range of fruit, DESCRIPTION: Distributor and wholesaler of fruit DESCRIPTION: Specialists in growing, packaging originally NZ Kiwifruit Marketing Board; corporatised primarily for NZ, also exports to Australia, Chile, etc. and vegetables, exporters and importers of Dole, and marketing of New Zealand fresh produce for Legal monopsony outside Australia; sales for 2,700 Owns a large number of subsidiaries and brands Sunkist; 700 growers, 400 grower shareholders domestic and international markets growers (Status, Delica, ENZA, Floramax, Kerifresh, Fresh Food Exports 75%)

KEY PRODUCTS: Kiwifruit marketer KEY PRODUCTS: Distributor and trader of apples, KEY PRODUCTS: Fresh fruit and vegetables KEY PRODUCTS: Fresh vegetables (Cabbage, cauli, kiwifruit, tomatoes, flowers, citrus, bananas etc. carrots, onions, potatoes, pumpkin, squash)

OWNERSHIP: NZ; Corporate OWNERSHIP: : Foreign Private Germany PE (Baywa, OWNERSHIP: NZ; co-operative (~400 growers) OWNERSHIP: NZ; private (Balle Family) (kiwifruit growers) 73%), Private NZ (Dossor 12%) PE NZ (Direct Market Gardeners Ltd Capital 10%) (includes LaManna Australia)

COMPANY NUMBER: 1027483 COMPANY NUMBER: 41406 COMPANY NUMBER: 1407 COMPANY NUMBER: 408868 / 1707044

ADDRESS: 400 Maunganui Road ADDRESS: 8 Monahan Road, Mt Wellington, ADDRESS: 78 Waterloo Road ADDRESS: 166 Heights Road, RD 1, Pukekohe Mount Maunganui Auckland Hornby, Christchurch Auckland

PHONE: +64 7 572 7600 PHONE: +64 9 573 8700 PHONE: +64 3 343 0430 PHONE: +64 9 238 5604

WEBSITE: www.zespri.com WEBSITE: www.turnersandgrowers.com WEBSITE: www.mgmarketing.co.nz WEBSITE: www.ballebros.co.nz/

YEAR FORMED: 1988 YEAR FORMED: 1897 YEAR FORMED: 1923 / 1987 YEAR FORMED: 1988

STAFF EMPLOYED: 250 STAFF EMPLOYED: 2,000 STAFF EMPLOYED: 320 STAFF EMPLOYED: 350 (200 + 150 (Mr Chips))

REVENUE: $1,448m (FY12) $1,487 (FY12) REVENUE: $669.1m (FY12) REVENUE: $267m (FY12) $534.4m under REVENUE: $130 (FY13) includes Mr Chips $55m management

COMPANY HIGHLIGHTS: Global sales and volumes COMPANY HIGHLIGHTS: Company had a loss COMPANY HIGHLIGHTS: Extending operations in COMPANY HIGHLIGHTS: Acquired Mr Chips from of kiwifruit lower that last year but returns to orchard (EBIT) of $18m; writedown in assets; continued Australia; EBIT $7.6m; 50:50 JV with Te Mata Simplot in 2013 (30,000 tpa chips) with revenue of higher, continued recovery post Psa plant losses, success of apples in Northern Hemisphere; new exports sees move into exporting for group; ongoing $56m in 2012; first move into processed foods for ongoing grafting to new varieties; success of Sungold ENZAFoods factory; development of ENZA Red and marketing under local “Nature’s Pick” brand Balle Bros (G3) in the market Summer Kiwi; strategy to become more vertically integrated; considering selling land to value of $100m and non –core businesses

Source: annual reports, company websites, company data, NZ Companies Office, interviews, Coriolis estimates 32 TOP 10 (+1) PRODUCE FIRM PROFILES IFAB 2013 5 6 7 8 FRESH DIRECT LTD A.S. WILCOX & SONS LEADERBRAND MR APPLE NZ

Peter Turner Kevin Wilcox Richard Burke Andrew van Workum Managing Director Managing Director General Manager Chief Executive Officer

DESCRIPTION: Fresh produce and flower DESCRIPTION: Grower and distributor of Potatoes, DESCRIPTION: Range of salads, produce and fruits DESCRIPTION: #1 apple exporter; vertically wholesalers and importers; plus exporting via sister onions, carrots, persimmons over 2,500 acres, for domestic retail, processing and export; squash to integrated with 53 orchards, 3 packhouses, 1 company JP Exports Ltd, and Purefresh Organics, includes export division Southern Fresh Produce, and Japan; Growing 3,000ha coolstore and logistics service Taste Zone, Turners Floral, Turners Produce, Valley Plains Produce and Potato supplies Part of the SCF receivership; Exported 4.2m cartons. Fresh companies Owns 10% T&G

KEY PRODUCTS: Fresh flowers, fruit and vegetables KEY PRODUCTS: Fresh potatoes, onions and carrots KEY PRODUCTS: Lettuce, broccoli, squash, KEY PRODUCTS: Apples (apples, blueberries, broccoli, oranges, tomatoes branded as Fresh Zone, Country Fresh, Field Fresh sweetcorn, salads, watermelons etc.) Purefresh brand and Econo Pack

OWNERSHIP: NZ; private (Turner Family) OWNERSHIP: NZ; private (Wilcox Family) OWNERSHIP: NZ; private (McPhail) OWNERSHIP: NZ: Scales Corp (PE: Direct Capital 82.8%)

COMPANY NUMBER: 668313 COMPANY NUMBER: 51206 COMPANY NUMBER: 827392 COMPANY NUMBER: 545180

ADDRESS: 29 Clemow Drive, Mount Wellington, ADDRESS: 58 Union Road, Pukekohe ADDRESS: 33 Parkinson Street, Gisborne, Hawkes ADDRESS: Station Road, Whakatu, Hawkes Bay Auckland Franklin, Auckland Bay

PHONE: +64 9 573 4100 PHONE: +64 9 237 0740 PHONE: +64 6 867 6231 PHONE: +64 6 873 1030

WEBSITE: www.freshdirect.co.nz WEBSITE: www.aswilcox.co.nz www.sofresh.co.nz WEBSITE: www.leaderbrand.co.nz WEBSITE: www.mrapple.co.nz; www.jpexports.co.nz/ www.scalescorporation.co.nz

YEAR FORMED: 1995 YEAR FORMED: 1954 YEAR FORMED: 1975 YEAR FORMED: 1998

STAFF EMPLOYED: 300+ STAFF EMPLOYED: 170* STAFF EMPLOYED: 187 (+300 seasonal) STAFF EMPLOYED: 220 -1700 (seasonal)

REVENUE: $150-200* (FY12) REVENUE: $200* (FY12) REVENUE: $140* (FY12) REVENUE: Gp sales $227 (FY12) Mr Apple ~$140m* (FY10 Gp $186m Mr Apple $116m 62%)

COMPANY HIGHLIGHTS: Expanding warehousing COMPANY HIGHLIGHTS: COMPANY HIGHLIGHTS: COMPANY HIGHLIGHTS: 2012 Gp sales $227m and undergoing operational restructuring to gain with 13.6m profit; Acquired 50% Fernridge apple efficiencies. business aim to increase consolidation in sector.

*Estimates; Source: annual reports, company websites, company data, NZ Companies Office, interviews, Coriolis estimates 33 TOP 10 (+1) PRODUCE FIRM PROFILES IFAB 2013 9 10 11 EASTPACK SATARA LTD FRESHMAX NZ LTD SEEKA KIWIFRUIT FRESHMAX PTY LTD

Tony Hawken Ross Kane Michael Franks Chief Executive Officer Chief Executive Chief Executive

DESCRIPTION: #1 postharvest kiwifruit company DESCRIPTION: Full service, vertically integrated DESCRIPTION: Orchard and Post harvest kiwifruit recently merged with Satara business with a co-ordinated range of operations and avocado company across the fresh produce supply chain including growers, wholesalers, exporters, coolchain distribution, IP ownership

KEY PRODUCTS: Kiwifruit and avocados KEY PRODUCTS: Fresh fruit and vegetables KEY PRODUCTS: Kiwifruit & avocados (AvoFresh, (branded range of apples, pears, cherries, mandarins SeekaFresh) and tomatoes)

OWNERSHIP: NZ; co-operative Eastpack Ltd OWNERSHIP: AU based Co.; Mixed: PE (Maui OWNERSHIP: NZ; public (NZX: SEK) Cooperative fruit growers Capital PENZ 60%), others -management & growers 40% )

COMPANY NUMBER: 4256478 COMPANY NUMBER: 1842723 / AU# 154789321 COMPANY NUMBER: 342045

ADDRESS: 678 Eastbank Road, Edgecumbe 3193, ADDRESS: 113A Carbine Road, Mount Wellington, ADDRESS: 6 Queen Street, Te Puke, Bay of Plenty Bay of Plenty Auckland

PHONE: +64 7 304 8226 PHONE: : +64 9 573 8500 PHONE: +64 7 573 6127

WEBSITE: www.eastpack.co.nz WEBSITE: www.freshmax.co.nz WEBSITE: www.seeka.co.nz

YEAR FORMED: 1980 YEAR FORMED: 1997 YEAR FORMED: 1987

STAFF EMPLOYED: 250 -2,000 (seasonal) STAFF EMPLOYED: 280 (NZ); 440 total STAFF EMPLOYED: 163; seasonal 2,000

REVENUE: >$130m combined (Eastpack $68m REVENUE: $119.6 (NZ FY12) $123m (FY13) REVENUE: 108.3m (FY12) FY12 )

COMPANY HIGHLIGHTS: Merger finalised March COMPANY HIGHLIGHTS: In late 2011 Maui Capital COMPANY HIGHLIGHTS: EBITDA of $15.5m; 2013; packing 325-27 Class 1 kiwifruit representing (NZ based PE) purchased Wolseley share. JV Prime revenue reduced due to removal of Gold vines with 27-30% of NZ production; $16.4m EBIT for Eastpack Harvest was formed in 2012 to develop the Nth PSA disease; consolidating packing facilities; co- 2012 year. American market, followed by the purchase of investing in coolstore hub in Malaysia Energie based in Nelson NZ late in 2013.

*Estimates; Source: annual reports, company websites, company data, NZ Companies Office, interviews, Coriolis estimates 34 OTHER PRODUCE FIRM PROFILES IFAB 2013

Ownership Company MD/CEO Business description Company # Formed Revenue Staff Address Website

Meadow Mushrooms John Barnes Growers and distributors of 132576 1970 $50m* 500 50 Wilmers Road www.meadowmushrooms.co.nz Ltd Chief Executive mushrooms NZ; Private Christchurch 145 T/week (Burdon, others) 64 3 343 6304

Apata Steve Low Post harvest fruit operator 205019 1983 $27.6m 130- 9 Turntable Hill Road, www.apata.co.nz Chief Executive (kiwifruit and avocado) NZ; public/ co- 500 RD 4, Katikati, Bay of (Share in Primor) operative (peak) Plenty (260+ 64 7 552 0911 shareholders)

Trevelyan Steve Butler Post harvest fruit operator NZ; Private 1960s- $40m* 70 - 310 No. 1 Road, RD2, www.trevelyan.co.nz General Manager (kiwifruit and avocado) (Trevelyan family) 1970s 800 Te Puke, Bay of Plenty 1 site; 3 packhouse facilities & 24 64 7 573 0085 coolstores

OPAC (Opotiki Packing Craig Thompson Post harvest fruit operator 374655 1988 $39m 70- 93 Waioeka Road, www.opac.co.nz and Coolstorage) Managing Director (kiwifruit and avocado) NZ; Private 800 Opotiki, Bay of Plenty (Seeka 20%, 64 7 315 8700 others)

Aerocool Ltd Tim Woodward Post harvest fruit operator 1107843 2001 $15.6m 70 (+ 15 Mends Lane, www.aerocool.co.nz General Manager (kiwifruit and avocado) NZ; Private (12) season Paengaroa, Te Puke, (Team Avocado) (Anderson, Birley, al) Bay of Plenty others) 64 7 533 6212

DMS Progrowers Paul Jones Post harvest fruit operator 526044 1989 $23.6m 70-200 195 Devonport Road, www.dms4kiwi.co.nz Founder owner (kiwifruit and avocado) NZ; public (‘13) (season Tauranga, Bay of “Champions” (contract out picking) (~50% Jones/ al) Plenty Greenlees) +64 7 578 9107

First Fresh NZ Bill Thorpe Grower/packer in Gisborne 694427 1989 $57m 300 265 Lytton Road, www.firstfresh.co.nz Founder/Chairman Partners with MG Marketing NZ; Private (‘10) Gisborne, Hawkes Bay NZ Fruits Limited (sister co) and Freshmax (Thorpe, Ready, 64 6 863 0620 Pepper others)

NZ HotHouse Ltd Brett Wharfe 20 ha of glasshouse 855275 1989/ $30- 300 328 Karaka Road, www.nzhothouse.co.nz Managing Director production NZ; Private (KPH 1997 50m* State Highway 22, Tomatoes, also capsicum, Produce, Wharfe, Drury, Auckland cucumbers, lettuce others) 64 9 295 9020

Fresh Food Exports 2011 Arthur Greensmith Fresh strawberries, 508402 2011 $25- 250 256 Omaha Flats www.freshfoodexports.co.nz General Manager blueberries, persimmon 75% Delica 45m* Road, Omaha Flats, (T&G/Baywa), NZ Warkworth Private 25% 64 9 422 7006 Greensmith

* Estimate based on number of employees and type of business activity; Source: annual reports, company websites, company data, NZ Companies Office, interviews, Kompass, Coriolis estimates 35 OTHER PRODUCE FIRM PROFILES IFAB 2013

Ownership Company MD/CEO Business description Company # Formed Revenue Staff Address Website

Heartland Group Brendon Osborne VI Apple growers, packers 1236967 2002 $35- 250- 79 Beach Road www.heartlandfruit.co.nz General Manager and exporters NZ; Private 40m 400 Richmond, Nelson, own Compass Fruit Packhouse Luvya, Love Apples, Eve, (Hoddy, Easton, (incl 64 3 544 6570 ( Nelson) Divine, Ambrosia, Adore, McCliskie, 200 Smitten Thompson) orchar d)

Yummy Fruit Co John Paynter Apple and stone fruit 164059 1870/ $27m 180 548 St Georges Road www.yummyfruit.co.nz Managing Director marketing company; orchard NZ; Private 1973/ (11) South, Hastings, ownership in HB (via Johnny (Paynter family) 2001 Hawkes Bay Appleseed) 64 6 877 8127

Snap fresh foods Ashley Berrysmith Dedicated growing and 3045351 2010 $5-10m* 150 22 Bell Avenue www.nzfreshcuts.co.nz; Director processing NZ; Private Mount Wellington www.snapfreshfoods.com (Berrysmith) Auckland Includes Fraisbon Foods and Sun 64 9 270 0122 Sprout, Sproutman

Apollo Apples Bruce Beaton Apple growers and exporters 1818469 2006 $20- 150 22 Whakatu Road www.apolloapples.co.nz Managing Director NZ; Private (Beaton 30m* Hastings, Hawkes Bay 400 ha of own fruit / ENZA and Mossman 64 6 873 0404 partner with Jazz families) 100k bins/year; 1m cartons; 44 CA storerooms

Te Mata mushrooms Martin Steven Mushroom grower 163038 1969 $5m 15-110 Brookvale Road www.tematamushrooms.co.nz General Manager NZ; Private Havelock North (Brookvale Mushrooms) (Hawley, Speeden) 64 6 877 7266

Kono NZ Don Everitt Grower of apples, pears, 3438072 1977 $8m 23-150 188 College Street, www.wakatu.org.nz/ (Wakatu Incorp) CEO kiwifruit hops (220ha) Private/Iwi (12) (Gp (hort) Motueka, Nelson (Wakatu $70m) 64 3 528 4192 Incorporation)

Crasborn Group Eddie Crasborn Apple grower and exporter 164487 1974 $5-15m* 100 1460 Omahu Road www.kiwicrunch.com Managing Director NZ; Private RD5, Hastings JV Freshmax (Crasborns) 64 6 879 9301

* Estimate based on number of employees and type of business activity; Source: annual reports, company websites, company data, NZ Companies Office, interviews, Kompass, Coriolis estimates 36 OTHER PRODUCE FIRM PROFILES IFAB 2013

Ownership Company MD/CEO Business description Company # Formed Revenue Staff Address Website

Bostock Group John Bostock VI HawkesBay- squash 1869848 1980 ~$100m 100 3 Kirkwood Road www.jbgroup.co.nz; JB (DM Palmer) Founder onions, grains, ice cream, NZ; Private (John (11) Hastings, Hawkes Bay www.dmpalmer.co.nz apples (parent company also Bostock) 64 6 873 9046 ProFruit (processors), Rush Profuit, Rush Munros, Aozora Munro’s, DMP, Aozora (exports etc.) to Asia, JV Chile))

Living Foods Vicky Thompson Production and marketing of 701308 1995 $10- 80 107 Kirkbride Road www.livingfoods.co.nz Managing Director salads and spinach (incl NZ; Private 15m* Mangere, Auckland Private label) (Thompson & 64 9 257 1083 Goodwin families)

Southern Paprika Hamish Alexander Capsicum supply to Japan 953484 1988 $23.8m 80 504 Woodcocks Road www.southernpaprika.co.nz Managing Director and Europe; 15 ha under glass Mix: NZ; Private Warkworth, Auckland producing 4,000tpa (Alexander 45%)/ 64 9 425 9496 Beheermaa- Tschappij Legmeerpolder BV (Neth)

Delta Produce Locky Wilson Kumara growers, 1261184 1990 $22.1m 60 97 Jervois Street www.deltakumara.co.nz Cooperative General Manager NZ; Co-operative (‘13) Dargaville, Kaipara growers 64 9 439 0717

The Produce Company Rob McPhee Wholesaler, exporter 1288178 2000 $10- 60 18A Clemow Drive www.produceco.co.nz General Manager (increased range to cheese, NZ; Private 15m* Sylvia Park, Auckland seafood) (Stokes, McPhee 64 9 634 8320 and Dalley)

FruitPackers HB (Co Chris Dillon Apple grower co-operative 163383 1970 $11.2m 50 76 Rangitane Road www.frupak.co.nz Operative) General Manager selling fresh apples and NZ Co-op (Moffet (‘11) Whakatu, Hawkes Bay processed apples for others) 64 6 878 8520 foodservice

Fresh to Go David Robinson Ready made salads, salad 940031 1998 $10- 40 60 Hugo Johnston Drive www.freshtogo.co.nz Operations meals Mix: PE (Todd Corp 15m* Penrose, Auckland Manager 58%), Private; NZ 64 9 525 7294 (Robinson 42%)

CSI International (NZ) Allan MacDonald Traders & domestic 637409 1994 $8.0m 40 1404 Omahu Road www.csifoods.co.nz/ Ltd / CSI Foods Managing Director distributors of vegetable NZ; Private Hastings Purchased off CSI Group (Au) based ingredient for 64 6 879 4377 manufacturing and food service.

* Estimate based on number of employees and type of business activity; Source: annual reports, company websites, company data, NZ Companies Office, interviews, Kompass, Coriolis estimates 37 OTHER PRODUCE FIRM PROFILES IFAB 2013

Ownership Company MD/CEO Business description Company # Formed Revenue Staff Address Website

45 South Management/ John Tims Manages cherry orchards and 964255 2006 $5- 30 Corner Ord Road & www.orchardfresh.co.nz Orchard Fresh Managing Director packhouse, plus domestic NZ; Private 10m* State Highway 6 www.45s.co.nz delivery business (Hinton, Cook, Cromwell McConnon) 64 3 445 140

The Fresh Fruit Co of Glenn Pool Fresh fruit and vegetable 412966 1988 $3-5m 25 46 Jervois Road, Herne www.freshco.co.nz NZ General Manager Exporter (Sonya, Breeze) – NZ; Private Bay, Auckland Vertically integrated orchards (Mangan, 64 9 376 9990 in Nelson and Hawkes Bay Taylor,Owens)

Primor John Caroll Exporters and importers of 396423 1988 $50m 25 Level 2, 25 Davis www.primor.co.nz General Manager fresh produce NZ; Private (Apata, (10) Crescent, Newmarket, various) Auckland 64 9 522 2822

Gibb Holdings (Sujon John Gibb Fresh fruit and fruit 245085 /2210354 1969/2 $5- 20 17 Bullen Street www.sujon.co.nz Marketing) Managing Director processing blackcurrants, NZ; Private 009 10m* Tahunanui, Nelson blueberries etc. (Hollyer, Williams, 64 3 546 4101 Gibb)

Golden State Foods John Wafer Fresh packed salad 314635 1986 $11.2m 20 9 Noel Burnside Road www.gsfaus.com.au Managing Director manufacturers for retail and USA; private (12) Papatoetoe Was Essentia Foods (May 2009) foodservice and sauces (Golden State Auckland Recently purchased Groenz Foods USA) 64 9 277 6262

Jace Investments Andrew Darling Horticulture services 1283914/ 1015160 2003 $5- 15 54 Woodland Road, www.jacegroup.co.nz Global Fresh Director including Global Fresh, Pure NZ; Private 10m* Katikati, Bay of Plenty www.globalfresh.co.nz Pollen, Just Avocados, (Darling, Lemon) 64 7 549 3027 Southern Orchards, APAC

Fruitlynx Ross Kane Export company; marketing 1006475 1999 $3.7m 2 500 Mount Wellington www.freshmax.co.nz/products/k CEO kiwifruit in Australia and AU/NZ; JV Highway iwifruit.aspx collaborative marketing between Freshmax Mount Wellington, www.fruitlynx.co.nz NZ 80% and Auckland Aongatete NZ 20% 64 9 917 1495

* Estimate based on number of employees and type of business activity; Source: annual reports, company websites, company data, NZ Companies Office, interviews, Kompass, Coriolis estimates 38 iFAB 2013 PRODUCE – EXPORTS BY REGION IFAB 2013 New Zealand produce exports have achieved solid growth driven by East Asia and Australasia; strong growth achieved across developing world; Europe and North America achieving low growth

NEW ZEALAND PRODUCE EXPORT BY REGION 10 Year US$m; 2002-2012 CAGR Absolute $1,621 $5 $1,586 TOTAL 8% +$872m $6 SS Africa 15% +$5m

$1,333 $1,348 $7 $6 $1,266 $1,261 $637 $5 $6 $695 E Asia 12% +$461m $1,170 $5 $1,076 $449 $5 $524 $1,024 $424 $5 $440 $375 $100 $826 $400 $19 $59 $27 $4 $381 $50 $7 $8 $117 SE Asia 12% +$78m $21$5 $36 $17$5 $65 $86 S Asia 27% +$24m $713 $9$3 $3 $8 $26 $3 $23 $10 $31 NA/ME/CA 14% +$23m $2 $176 $7 $24 $9 C/S America 20% +$7m $282 $125 $7 $271 $30 $179 $9$3 $156 $34 Australia/ 13% +$170m $233 $12$4$2 $194 $239 $90 $141 $80 Pacific Islands $43 $145 $116 $86 $78 $8$2 $39 $63 $88 $8 $1 $2 $99 $84 N. America 2% +$14m $69 $70 $77 $70 $524 $529 $468 $469 $476 $421 $371 $408 $380 Europe 3% +$91m $289 $309

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: UN Comtrade database; Coriolis analysis 40 EXPORT DOLLARS IFAB 2013 Japan continues to be the number one produce export market, followed by Australia, Europe (unspecified), Taiwan and China

TOP 25 PRODUCE MARKETS BY EXPORT VALUE US$m; 2012

Japan $371 Australia $195 Europe, unspecified $183 Taiwan $104 China $104 USA $74 South Korea $69 Spain $56 Hong Kong SAR $48 United Kingdom $46 Thailand $37 Netherlands $36 Malaysia $29 Singapore $24 India $22 Italy $22 United Arab Emirates $19 Fiji $18 Indonesia $16 Germany $12 Canada $9 New Caledonia $8 Russia $8 Viet Nam $6 French Polynesia $5

Source: UN Comtrade database; Coriolis analysis 41 EXPORT DOLLAR GROWTH IFAB 2013 China, Japan & Taiwan driving export dollar value growth

TOP 25 PRODUCE MARKETS BY CHANGE IN EXPORT VALUE US$m 5 YEAR CHANGE; 07-12 1 YEAR CHANGE; 11-12

Japan $118 China $29 China $89 Japan $21 Australia $50 Taiwan $13 Taiwan $46 Thailand $11 Thailand $29 India $6 India $18 United Arab Emirates $6 Hong Kong SAR $18 USA $4 Singapore $12 Malaysia $3 United Arab Emirates $11 Singapore $3 Malaysia $11 Canada $2 Indonesia $8 Viet Nam $2 Viet Nam $5 Belgium $1 Russia $5 South Africa $1 New Caledonia $4 Philippines $1 Papua New Guinea $3 Brazil $1 Brazil $3 Papua New Guinea $1 Fiji $2 Chile $1 Mexico $2 Russia $1 Bangladesh $2 Algeria $1 Oman $2 Sri Lanka $0 Sweden $1 Oman $0 Chile $1 Lebanon $0 Canada $1 Mauritius $0 Algeria $1 Qatar $0 Sri Lanka $1 Hong Kong SAR $0

Source: UN Comtrade database; Coriolis analysis 42 EXPORT DOLLAR DECLINE IFAB 2013 Europe leading declining markets by value; concerningly Australia has turned negative

BOTTOM 25 PRODUCE MARKETS BY CHANGE IN EXPORT VALUE US$m 5 YEAR CHANGE; 07-12 1 YEAR CHANGE; 11-12

-$48 United Kingdom -$31 Europe, unspecified -$33 USA -$28 Netherlands -$20 Netherlands -$26 Australia -$7 Germany -$12 Spain -$6 Belgium -$7 United Kingdom -$4 France -$7 Germany -$4 Spain -$6 South Korea -$3 Italy -$4 France -$2 Saudi Arabia -$4 Italy -$2 Ireland -$3 Indonesia -$1 French Polynesia -$3 New Caledonia -$1 Finland -$2 French Polynesia -$1 South Korea -$1 Portugal -$0.3 Switzerland -$1 Kuwait -$0.3 Lithuania -$1 Fiji -$0.3 Argentina -$1 Norway -$0.2 Guam -$1 Mexico -$0.2 Trinidad and Tobago -$1 Morocco -$0.2 Egypt -$1 Denmark -$0.1 Niger -$1 Saudi Arabia -$0.1 Norway -$0.5 Ireland -$0.1 Iran -$0.4 Finland -$0.1 Cyprus -$0.3 Samoa -$0.1 Neth. Antilles -$0.3 Guam -$0.1 Greece -$0.2 Tunisia

Source: UN Comtrade database; Coriolis analysis 43 PERCENT GROWTH IFAB 2013 Strong growth rates coming out of a wide range of developing markets

TOP 25 PRODUCE MARKETS BY CAGR PERCENT CHANGE IN EXPORT VALUE % in US$m 5 YEAR CAGR; 07-12 1 YEAR CHANGE; 11-12

Bangladesh 155% Lebanon 594% El Salvador 108% Chile 68% Lebanon 81% Sri Lanka 64% Portugal 71% Algeria 52% Oman 64% Viet Nam 49% Sri Lanka 58% Thailand 44% China 47% United Arab Emirates 44% Viet Nam 43% India 40% Brazil 43% Peru 39% Chile 42% China 39% India 41% Philippines 39% Peru 36% Maldives 36% Thailand 34% Belgium 36% Algeria 29% Brazil 32% Mexico 28% Canada 29% Qatar 26% Uruguay 28% Russian Federation 24% South Africa 26% Papua New Guinea 21% Papua New Guinea 18% United Arab Emirates 19% Oman 17% Kenya 19% El Salvador 17% Mauritius 18% Mauritius 16% Jordan 17% Qatar 15% Sweden 16% Taiwan 14% Solomon Isds 16% Barbados 13% Indonesia 15% Malaysia 13%

Source: UN Comtrade database; Coriolis analysis 44 PERCENT DECLINE IFAB 2013 Europe stands out in declining markets

TOP 25 PRODUCE MARKETS BY CAGR PERCENT CHANGE IN EXPORT VALUE US$m 5 YEAR CAGR; 07-12 1 YEAR CHANGE; 11-12

-7% USA -43% Kenya -9% Netherlands -44% Netherlands -9% Germany -46% N. Mariana Isds -11% Ireland -47% Saudi Arabia -13% United Kingdom -47% Kiribati -15% Belgium -47% Turkey -15% France -48% Switzerland -15% N. Mariana Isds -53% Denmark -18% Guam -54% France -18% Iran -56% Jordan -23% Saudi Arabia -58% Tunisia -27% Uruguay -66% Guam -31% Finland -66% Iran -33% Switzerland -66% Portugal -33% Trinidad and Tobago -81% Finland -41% Argentina -92% Morocco -100% Cyprus -100% Georgia -100% Egypt -100% Namibia -100% Lithuania -100% Sudan -100% Falkland Isds (Malvinas) -100% Romania -100% Liberia -100% Turkmenistan -100% Bermuda -100% Myanmar -100% Greece -100% Cyprus -100% Neth. Antilles -100% Egypt -100% Niger -100% Lithuania

Source: UN Comtrade database; Coriolis analysis 45 BENCHMARK – EXPORT GROWTH VS. COMPETITORS IFAB 2013 New Zealand had a difficult year in produce relative to key competitors; poor performance relative to Australia stands out (discussed next page)

TOTAL PRODUCE EXPORT VALUE IN 2012: NZ VS. COMPETITORS US$m; 2012; 2012 vs. 2011

EXPORT VALUE 2012 1 YEAR $ CHANGE IN VALUE 1 YEAR % CHANGE IN VALUE

USA $17,304 USA $1,597 Australia 29%

Spain $13,651 Spain $499 USA 10%

Netherlands $11,615 Australia $446 Greece 10%

Chile $5,082 Greece $103 Spain 4%

France $4,417 South Africa $77 South Africa 3%

South Africa $2,395 Chile $73 Chile 1%

Australia $1,989 Uruguay -$15 New Zealand -2%

Argentina $1,865 New Zealand -$36 Brazil -4%

New Zealand $1,586 Brazil -$37 Netherlands -4%

Greece $1,167 Argentina -$218 France -5%

Brazil $899 France -$226 Argentina -10%

Uruguay $84 Netherlands -$507 Uruguay -15%

Source: UN Comtrade database; Coriolis analysis 46 FOCUS – NZ VS. AUSTRALIA IFAB 2013 Australia is outperforming New Zealand across South Asia (India, Bangladesh & Pakistan)

PRODUCE EXPORT VALUE: NZ VS. AUSTRALIA TOP 15 AU PRODUCE EXPORT MARKETS BY 1Y VALUE GROWTH VS. NZ US$m; 2011-2012 US$m; 2012 vs. 2011

-$200 -$100 $- $100 $200 $300

India

+$446 Bangladesh

$1,989 Pakistan AU Growth coming primarily -$36 China, Hong Kong SAR from dried beans, peas & lentils China $1,621 $1,586 $1,542 United Arab Emirates

Egypt

Areas, nes

Japan

Singapore

Netherlands

Saudi Arabia

Viet Nam

Papua New Guinea

USA

2011 2012 2011 2012 Net Other

AU NZ

Source: UN Comtrade database; Coriolis analysis 47 iFAB 2013 PRODUCE – EXPORTS BY TYPE IFAB 2013 New Zealand produce exports have achieved growth in the past decade, with kiwifruit being the key standout

10 YEAR NEW ZEALAND PRODUCE EXPORT BY CATEGORY/SUPER-CATEGORY (HS4/6 LEVEL) US$m; 2002-2012 10 Year

CAGR Absolute $1,620 $11 $1,584 TOTAL 8% +$860m $6 Fruit, frozen 9% +$6m $11$7 10y Fruit, dry/pres 34% +$6m CAGR 8% $1,332 $1,346 $20 $18$5 $1,266 $5 $1,261 $19$5 $13$4 $1,170 $824 $13$0 $840 Kiwifruit 12% +$578m $1,076 $14 $1 $1,024 $15$2 $687 $574 $689 $648 $535 $826 $9$1 $463 $713 $492 $0$5 $286 $285 $263 $293 Apples 4% +$97 $265 $235 $238 $313 $275 $258 $68 $236 $209 $43 Avocados 14% +$31m $35 $38 $62 $196 $33 $39 $65 Other fresh fruit 6% +$29m $48 $45 $60 $29 $34 $38 Vegetables, dry/pres 6% +$18m $16 $20 $27 $30 $33 $37 $34 $39 $40 $34 $48 $115 $12 $23 $26 $96 $35 $37 $25 $26 $102 $81 $115 Vegetables, frozen 6% +$53m $20 $76 $84 $87 $84 $76 $61 $211 $193 $168 $183 $173 Vegetables, fresh 4% +$54m $119 $144 $142 $139 $136 $144 $0 $0 $0 $1 $0 $0 $0 $1 $2 $1 $1 Nuts 33% +$1m 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: UN Comtrade database; Coriolis analysis 49 EXPORT DOLLARS IFAB 2013 Kiwifruit and apples continue to be New Zealand’s two largest produce exports

EXPORT VALUE OF TOP 30 PRODUCE PRODUCTS (HS6 LEVEL) EXPORTS IN 2012 US$m; 2012

Kiwifruit $840 Apples $293 Onions $53 Squash/Other Veg. $52 Frozen peas $46 Avocados $43 Frozen mixed veg $31 Capsicum $30 Dried peas $23 Frozen sweet corn $18 Cherries $17 Blackcurrants; other $14 Dried vegetables nes $14 Potatoes $11 Frozen beans $10 Other fruit, frozen $8 Tomatoes $8 Apricots $8 Frozen vegetables nes $8 Other fruit nes $7 Carrots $7 Pears $4 Dried fruit mix $4 Strawberries $4 Mandarins, etc. $3 Asparagus $3 Blackberries, etc. $2 Lemons/Limes $2 Oranges $2 Dried apples $2

NOTE: See appendix for full definitions; Source: UN Comtrade database; Coriolis analysis 50 EXPORT DOLLAR GROWTH IFAB 2013 In 2012, kiwifruit and apples led export value growth, while onions and avocados led declines

ANNUAL CHANGE IN EXPORT VALUE OF TOP 30 PRODUCE EXPORTS US$m; 2012 vs. 2011

Kiwifruit $16 Apples $8 Capsicum $3 Apricots $3 Frozen vegetables nes $2 Frozen peas $2 Blackcurrants; other $1 Cherries $1 Dried fruit mix $1 Dried vegetables nes $1 Mandarins, etc. $1 Blackberries, etc. $0 Asparagus $0 Dried apples $0 Oranges $0 Strawberries $0 Lemons/Limes -$0 Other fruit nes -$0 Squash/Other Veg. -$1 Frozen beans -$1 Other fruit, frozen -$1 Carrots -$1 Dried peas -$1 Frozen sweet corn -$1 Net Frozen mixed veg -$2 -$36m Pears -$2 Tomatoes -$4 Potatoes -$4 Avocados -$25 Onions -$32

NOTE: See appendix for full definitions; Source: UN Comtrade database; Coriolis analysis 51 PERCENT GROWTH IFAB 2013 In 2012, apricots, dried fruit mix, frozen vegetables not elsewhere specified and mandarins grew at the fastest rate; onions, avocados, pears, tomatoes and potatoes led declines

ANNUAL PERCENT GROWTH IN TOP 30 PRODUCE EXPORTS US$m; 2012 vs. 2011

Apricots 55% Dried fruit mix 32% Frozen vegetables nes 30% Mandarins, etc. 18% Capsicum 11% Blackcurrants; other 10% Dried apples 9% Oranges 9% Cherries 8% Blackberries, etc. 7% Asparagus 6% Dried vegetables nes 5% Frozen peas 4% Apples 3% Kiwifruit 2% Strawberries 1% Squash/Other Veg. -1% Lemons/Limes -2% Other fruit nes -2% Frozen beans -5% Dried peas -5% Frozen mixed veg -6% Other fruit, frozen -6% Frozen sweet corn -7% Carrots -11% Potatoes -27% Tomatoes -32% Pears -33% Avocados -37% Onions -38%

NOTE: See appendix for full definitions; Source: UN Comtrade database; Coriolis analysis 52 $/KG IFAB 2013 In 2012 blackcurrants, cherries and dried fruit mix led in terms of export dollars per kilo

VALUE PER KILOGRAM OF TOP 30 PRODUCE EXPORTS US$m; 2012

Blackcurrants; other $11.79 Cherries $10.65 Dried fruit mix $9.66 Dried vegetables nes $7.19 Dried apples $7.17 Asparagus $6.88 Apricots $6.29 Strawberries $5.87 Other fruit nes $4.04 Capsicum $3.43 Avocados $3.34 Other fruit, frozen $2.66 Mandarins, etc. $2.57 Tomatoes $2.33 Blackberries, etc. $2.10 Kiwifruit $2.02 Frozen vegetables nes $1.90 Lemons/Limes $1.51 Frozen sweet corn $1.47 Frozen mixed veg $1.42 Oranges $1.36 Pears $1.29 Frozen beans $1.27 Frozen peas $1.17 Apples $0.95 Dried peas $0.89 Carrots $0.54 Squash/Other Veg. $0.53 Potatoes $0.36 Onions $0.31 Wt. Average $1.32

NOTE: See appendix for full definitions; Source: UN Comtrade database; Coriolis analysis 53 $/KG CHANGE IFAB 2013 In 2012 apricots, asparagus, strawberries and cherries achieved good price increases, while capsicum, dried fruit mix and dried peas led price declines

ANNUAL CHANGE IN VALUE PER KILOGRAM OF TOP 30 PRODUCE EXPORTS US$m; 2012 vs. 2011

Apricots $2.19 Asparagus $0.81 Strawberries $0.67 Cherries $0.47 Other fruit, frozen $0.32 Mandarins, etc. $0.23 Avocados $0.17 Kiwifruit $0.16 Dried vegetables nes $0.15 Tomatoes $0.14 Oranges $0.13 Lemons/Limes $0.10 Apples $0.08 Frozen sweet corn $0.07 Frozen vegetables nes $0.05 Carrots $0.04 Squash/Other Veg. $0.00 Pears $(0.00) Frozen beans $(0.01) Frozen peas $(0.03) Dried apples $(0.05) Frozen mixed veg $(0.05) Potatoes $(0.14) Blackcurrants; other $(0.15) Other fruit nes $(0.25) Blackberries, etc. $(0.27) Onions $(0.30) Dried peas $(0.63) Dried fruit mix $(0.81) Capsicum $(0.81)

NOTE: See appendix for full definitions; Source: UN Comtrade database; Coriolis analysis 54 iFAB 2013 PRODUCE – INDUSTRY ORGANISATIONS IFAB 2013 There are a number of key industry organisations in the produce industry

KEY PRODUCE ORGANISATIONS IN NEW ZEALAND 2013

Represents Funding Website/notes Pan - Funding from voluntary membership fees, United Fresh New Zealand Incorporated Produce 5+ A Day logo user fees and sponsorship http://www.unitedfresh.co.nz/ launched 5+ A Day® 1994 Support and promoting fresh produce industry on pan-produce issues Growers - Commodity Levy (FruitFed and VegFed) Horticulture New Zealand advocacy Order 2007 ($1.8m) www.hortnz.co.nz/ - 22 product groups pay levy

Licensing - Mandatory exporters licencing fees (60 Horticulture Exporters Authority (HEA) Export Companies, holding 87 licences) www.hea.co.nz promotions - Product Group under HEA fees (11 groups)

Pipfruit - Commodity Levy Order 2012 Pipfruit Industry Council industry www.pipfruitnz.co.nz

Kiwifruit - Commodity Levy (Kiwifruit) Order New Zealand Kiwifruit Growers Inc (NZKGI) growers - 12 industry group reps, 24 regional reps www.nzkgi.org.nz

O.E = operating expenses; Source: select annual reports and websites; Coriolis 56 PRODUCE – INDUSTRY SCIENTIFIC RESEARCH IFAB 2013 Plant and Food Research is the key organisation involved in the industry research

KEY SCIENTIFIC RESEARCH ORGANISATIONS INVOLVED IN PRODUCE INDUSTRY RESEARCH IN NEW ZEALAND 2013

Focus & activities - Food innovation – foods with functionalities - Joint research with Prevar into new apple and pear varieties ($21.6m over 7 yrs) - Prevar Licenses a new pear PremP109 to AIGN

Source: select annual reports and websites; Coriolis analysis 57 METHODOLOGY & DATA SOURCES IFAB 2013 Data was from a variety of sources, and has a number of identified limitations

This report uses a range of information sources, both qualitative and The opinions expressed in this report represent those of the industry quantitative. participants interviewed and the authors. These do not necessarily represent those of Coriolis Limited or the New Zealand Government. The numbers in this report come from multiple sources. While we believe the data are directionally correct, we recognise the limitations in Coriolis has not been asked to independently verify or audit the what information is available. In many cases different data sources information or material provided to it by or on behalf of the Client or any disagree (e.g. Statistics New Zealand vs. FAO vs. UN Comtrade). Many of the data sources used in the project. The information contained in data sources themselves incorporate estimates of industry experts (e.g. the report and any commentary has been compiled from information FAO AgStat). As one example, in many cases, the value and/or volume and material supplied by third party sources and publicly available recorded as exported by one country does not match the amount information which may (in part) be inaccurate or incomplete. Coriolis recorded as being received as imports by the counterparty [for makes no representation, warranty or guarantee, whether express or understood reasons]. In addition, in some places, we have made our implied, as to the quality, accuracy, reliability, currency or completeness own clearly noted estimates. of the information provided in the report.

All trade data analysed in all sections of the F&B Information project are If you have any questions about the methodology, sources or accuracy calculated and displayed in US$. This is done for a range of reasons: of any part of this report, please contact project lead Tim Morris at Coriolis, on +64 9 623 1848 1. It is the currency most used in international trade 2. It allows for cross country comparisons (e.g. vs. Denmark) 3. It removes the impact of NZD exchange rate variability 4. It is more comprehensible to non-NZ audiences (e.g. foreign investors) 5. It is the currency in which the United Nations collects and tabulates global trade data

58 TRADE CODES IFAB 2013 Project defines the following trade codes as produce

GLOBAL HARMONISED SYSTEM (HS) TRADE CODES DEFINED AS PRODUCE HS2002

Code Short Description Longer description Code Short Description Longer description Code Short Description Longer description 070110 Potatoes, seed Seed potatoes 071310 Dried peas Dried peas, shelled 080300 Bananas Bananas, including plantains, fresh or dried 070190 Potatoes Other potatoes, fresh or chilled 071320 Dried chickpeas, shelled Dried chickpeas, shelled 080410 Dates Dates, fresh or dried 070200 Tomatoes Tomatoes, fresh or chilled 071331 Dried beans, shelled Dried beans, shelled 080420 Figs Figs, fresh or dried 070310 Onions Onions and shallots, fresh or chilled 071332 Dried adzuki beans, shell Dried adzuki beans, shelled 080430 Pineapples Pineapples, fresh or dried 070320 Garlic Garlic, fresh or chilled 071333 Dried kidney beans Dried kidney beans, incl. white pea beans, shel 080440 Avocados Avocados, fresh or dried 070390 Leeks, etc. Leeks and other alliaceous vegetables, nes 071339 Dried beans, shelled, nes Dried beans, shelled, nes 080450 Guavas, mangoes, etc. Guavas, mangoes and mangosteens, fresh or dried 070410 Cauliflowers Cauliflowers and headed broccoli, fresh or chil 071340 Dried lentils, shelled Dried lentils, shelled 080510 Oranges Oranges, fresh or dried 070420 Brussels sprouts Brussels sprouts, fresh or chilled 071350 Dry broad beans, shelled Dried broad beans and horse beans, shelled 080520 Mandarins, etc. Mandarins, clementines, wilkings...etc, fresh o 070490 Red cab, kohlrabi, etc White and red cabbages, kohlrabi, kale...etc, f 071390 Dried legume, shelled, nes Dried leguminous vegetables, shelled, nes 080540 Grapefruit Grapefruit, fresh or dried 070511 Cabbage Cabbage lettuce, fresh or chilled 071410 Manioc Manioc, fresh or dried 080550 Lemons/Limes Lemons (Citrus limon/limonum) & limes (Citrus 070519 Lettuce Lettuce, fresh or chilled, (excl. cabbage lettu 071420 Sweet potatoes Sweet potatoes, fresh or dried aurantifolia/latifolia), fresh/dried 070521 Witloof chicory Witloof chicory, fresh or chilled 071490 Roots and tubers Roots and tubers with high starch content, fres 080590 Other citrus Citrus fruit, fresh or dried, nes 070529 Chicory Chicory, fresh or chilled, (excl. witloof) 080111 Coconuts, dessicated Coconuts, dessicated, shelled 080610 Grapes, fresh Fresh grapes 070610 Carrots and turnips Carrots and turnips, fresh or chilled 080119 Coconuts, fresh Coconuts, fresh, shelled 080620 Grapes, dry Dried grapes 070690 Beetroot, radishes etc. Beetroot...radishes and other similar edible ro 080122 Brazil nuts, shelled dried Brazil nuts, shelled dried 080711 Watermelons Watermelons, fresh 070700 Cucumbers Cucumbers and gherkins, fresh or chilled 080131 Cashew nuts, in shell Cashew nuts, in shell dried 080719 Melons Melons, fresh 070810 Peas Peas, fresh or chilled 080132 Cashew nuts, shelled Cashew nuts, shelled dried 080720 Pawpaw, papaya Papaws (papayas), fresh 070820 Beans Beans, fresh or chilled 080211 Almonds, in shell Almonds in shell, fresh or dried 080810 Apples Apples, fresh 070890 Leguminous veg nes Leguminous vegetables, fresh or chilled, nes 080212 Almonds, shelled Almonds without shells, fresh or dried 080820 Pears Pears and quinces, fresh 070910 Globe artichokes Globe artichokes, fresh or chilled 080221 Hazlenuts in shell Hazlenuts in shell, fresh or dried 080910 Apricots Apricots, fresh 070920 Asparagus Asparagus, fresh or chilled 080222 Hazlenuts, shelled Hazlenuts without shells, fresh or dried 080920 Cherries Cherries, fresh 070930 Aubergines Aubergines, fresh or chilled 080231 Walnuts in shell Walnuts in shell, fresh or dried 080930 Peaches, nectarines Peaches, including nectarines, fresh 070940 Celery Celery, fresh or chilled 080232 Walnuts, shelled Walnuts without shells, fresh or dried 080940 Plums Plums and sloes, fresh 070951 Mushrooms Mushrooms, fresh or chilled 080240 Chestnuts Chestnuts, fresh or dried 081010 Strawberries Strawberries, fresh 070959 Mushrooms not Agaricus Mushrooms other than of the genus Agaricus, fresh/chilled 080250 Pistachio Pistachio, fresh or dried 081020 Raspberries, etc. Raspberries, blackberries, mulberries and logan 070960 Capsicum Fruits of genus Capiscum or Pimenta, fresh or c 080290 Other nuts Other nuts, fresh or dried, nes 081030 Currants, gooseberries Black, white or red currants and gooseberries, 070970 Spinach Spinach, fresh or chilled 081040 Blackcurrants; other Cranberries, milberries...etc, fresh 070990 Other Vegetables Other vegetables, fresh or chilled, nes 081050 Kiwifruit Kiwifruit 071010 Potatoes, frozen Potatoes, frozen 081090 Other fruit nes Other fruit, fresh, nes 071021 Frozen peas Shelled or unshelled peas, frozen 081110 Strawberries, frozen Strawberries, frozen 071022 Frozen beans Shelled or unshelled beans, frozen 081120 Blackberries, etc. Raspberries, blackberries...etc, frozen 071029 Legume veg, frozen Leguminous vegetables, shelled or unshelled, fr 081190 Other fruit, frozen Other fruit and nuts, frozen, nes 071030 Spinach, frozen Spinach, frozen 081210 Cherries, pres. Cherries, provisionally preserved, not for imme 071040 Frozen sweet corn Sweet corn, frozen 081290 Fruit & nuts, pres. Fruit and nuts, provisionally preserved, not fo 071080 Frozen vegetables nes Vegetables, frozen, nes 081310 Apricots, dry Dried apricots 071090 Frozen mixed veg Mixtures of vegetables, frozen 081320 Prunes Dried prunes 071120 Olives Olives provisionally preserved, not for immedia 081330 Apples, dry Dried apples 071140 Cucumbers, pres. Cucumbers and gherkins provisionally preserved 081340 Dried fruit nes Other dried fruit, nes 071151 Mushrooms, pres. Mushrooms of the genus Agaricus, provisionally presvd. 081350 Dried fruit mix Mixtures of dried fruit and nuts, nes 071159 Mushrooms x Agari, pres Mushrooms other than Agaricus, provisionally presvd. 081400 Peels Peel of citrus fruit or melons, fresh, frozen, 071190 Mixed veg Other vegetables and mixture of vegetables pro 071220 Dried onions Dried onions 071231 Mushrooms, dry Mushrooms of the genus Agaricus, dried 071233 Jelly fungi,dry Jelly fungi (Tremella spp.), dried, 071239 Other mushrooms, dry Mushrooms (excl. of 0712.31-0712.33) & truffles, dried 071290 Dried vegetables nes Dried vegetables, nes

Source: United Nations codes; Coriolis definitions in conjunction with project steering group 59 GLOSSARY OF TERMS IFAB 2013 This report uses the following acronyms and abbreviations

A$/AUD Australian dollar N/C Not calculable ABS Absolute change N.H Northern Hemisphere ANZSIC AU/NZ Standard Industry Classification NZ New Zealand AU Australia NZ$/NZD New Zealand dollar Australasia Australia and New Zealand R&D Research and Development b Billion S Asia South Asia (Indian Subcontinent) CAGR Compound Annual Growth Rate SE Asia South East Asia C/S America Central & South America (Latin America) S.H Southern Hemisphere CRI Crown Research Institute SS Africa Sub-Saharan Africa CY Calendar year (ending Dec 21) T/O Turnover E Asia East Asia US/USA United States of America EBITDA Earnings before interest, tax, depreciation and US$/USD United States dollar amortization FAO Food and Agriculture Organisation of the UN UK United Kingdom FY Financial year (of firm in question) US United States of America

£/GBP British pounds YE Year ending JV Joint venture YTD Year to date m Million Sources n/a Not available/not applicable AR Annual report NA/ME/CA North Africa / Middle East / Central Asia Ce Coriolis estimate Nec/nes Not elsewhere classified/not elsewhere specified Ci Coriolis interview

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