May 1, 2009
Sweet taste of success
Sound familiar? Kiwis find Chinese fruit and take it global
Graeme Kennedy [NBR]
Hamilton company BioVittoria is expanding its Chinese fruit growing and processing operation to meet increasing global demand from the food and beverage industry for a cane sugar replacement.
BioVittoria is producing a natural sweetener from the luo han, a melon-type fruit of the cucumber, squash and pumpkin family grown on vines near the southeast city of Guilin.
Chief executive David Thorrold said soft-drink, confectionery and other processed food manufacturers had become concerned about using sugar due to health issues such as calorie levels and its link to diabetes.
“This has become a massive trend worldwide and will continue to grow,” Mr Thorrold says. “Some governments are legislating, consumers are looking for ways to reduce sugar intake and manufacturers are seeking alternatives.
“They want to avoid artificial sweeteners along with all additives and we are offering them a fruit-based solution to sugar reduction without reducing sweetness.” Processed in the company’s new multi-million dollar Guilin plant, the finished luo han product is exported to North America, Japan and South Korea as a powdered fruit concentrate 300 times sweeter than sugar.
BioVittoria topped the Exporters to Asia sector in The National Business Review’s monthly Exciting Companies series with a 66.5 rating in surveys conducted by strategic business consultancy New River.
Next were earthquake protection business Robinson Seismic, Zespri, NZ King Salmon and clothing manufacturer Icebreaker (see table).
BioVittoria was founded in 2003 by internationally renowned New Zealand plant scientist Dr Garth Smith and Stephen Le Febvre, who had worked with natural therapeutic compounds in the US nutraceutical industry. Dr Smith held senior positions with HortResearch and AgResearch and was involved in the early development of the kiwifruit industry in the 1980s.
“Garth knew a lot of science was being developed in Crown research institutes and his initial intentions were to link the science with the markets using Stephen’s US contacts,” Mr Thorrold says.
“But the sweetener came first — Garth had known a Chinese plant scientist Dr Lang Fusheng for more than 20 years and he had been working with luo han, which was an established but small cash-crop in Guilin. It has large flat seeds inside but, broken up, it is used to make tea — a sweet, healthy drink with anti-oxidant properties — and contains the compound mogroside, which is a natural, high-intensity sweetener.”
BioVittoria established a grower network of about 1000 farmers in 2005, its first growing year, and 6000 have now been contracted with more coming on board annually.
The company runs its own seedling and plant breeding programmes and trains farmers and process plant workers — “we run the entire supply chain,” Mr Thorrold says.
The product, branded PureLo, is being used by some of the world’s biggest food and beverage manufacturers, he says, and interest in the technology from companies and consumers is increasing rapidly.
“We are a New Zealand company exporting product to Japan and South Korea, and although it does not physically pass in and out of a New Zealand port, we are an exporter to Asia,” Mr Thorrold said.
“We have exported a lot of our expertise and knowledge and applied it to the China operation.”
Two years ago, BioVittoria won the supreme award at the New Zealand China Trade Association awards.
TRADING ENVIRONMENT IMPROVES
New Zealand’s exchange rates and shipping costs are improving trading for exporters to Asia, giving them higher margins or making products cheaper for overseas buyers.Business consultancy New River found in its survey of the sector 35% of respondents rated conditions buoyant, 25% neutral, 35% difficult and 5% very difficult although reaction depended in many cases on specific markets.
New River said the NZ dollar had fallen 40% against the yen and 33% against the US dollar since early last year although it had recovered a little recently. And shipping freight rates had decreased by up to 30% due to a drop in global trade in the economic crisis.
“Although the downturn has also affected Asia, food markets which are the majority of New Zealand exports to the region tend to remain stable,” the survey said.
“Health products are also said to be steady or growing. There are still opportunities for more exports with phenomenal growth coming from China, India and Indonesia — and because Asia had its own crisis in the late-I 990s and got through it many people have a glass half- full mentality.”
New River said business had fallen in Thailand following the country’s civil unrest while Indonesia could be difficult due to labelling and certification requirements.
Business conditions
Respondents’ rating of current business conditions in the EXPORTERS TO ASIA SectorVery buoyant =0%
Buoyant =35%
Neutral =25%
Difficult =35%
Very difficult =5%
Top 10 EXPORTERS TO ASIA
Rank / Company/ Excitement rating1 BioVittoria 66.5
2 Robinson Seismic 65.5
3 Zespri 63.0
4 The NZ King Salmon Company 60.0
5 Icebreaker 57.0
6 Canterbury of New Zealand 56.0
7 Just the Berries 55.5
8 Delica Global 55.0
9 Spy Valley Wines 52.0
10 Fonterra 45.5
