Zespri's chief executive in the past two years spent more time in New Zealand than at his base in Singapore. Photo / 123RF
Zespri's chief executive in the past two years spent more time in New Zealand than at his base in Singapore. Photo / 123RF
A horror couple of years for the kiwifruit export industry sparked discussion on whether Zespri chief executive Dan Mathieson should shift his base from Singapore back to New Zealand.
Mathieson, a Kiwi who recently marked his 20th year with the company, said Covid, severe labour shortages, extreme weather events, supplychain issues and resulting export fruit quality problems caned the multi-billion dollar export industry for 24 months.
“In fact in the last two years I would’ve spent more time in New Zealand than out of it.
“At the same time it’s really important we maintain our focus on developing markets and capture the best possible value from those markets.
The combination of external forces on Zespri’s New Zealand growers and overseas contracted kiwifruit producers resulted in a 2023 financial year the Bay of Plenty-headquartered global marketing company would rather forget. The issues have led to reduced fruit volumes.
Zespri’s net profit after tax, including revenue from selling growing licences, was $237.8m, compared to $361.5m the previous year. Net profit before tax was $331m, against $505m in FY22. Global operating revenue, including licence income, was $4.22b, compared to $4.47b in FY22.
Sub-quality fruit issues and associated costs meant $534m less available to pay growers. In FY22 the fruit quality bill was $307m.
Zespri sold 183.5m trays of New Zealand-grown and offshore-grown fruit, down from 201.5m trays in FY22.
Its New Zealand supply segment made a loss of $22.1m due to higher costs and reduced fruit volumes. The previous year it made a profit of $24.9m.
Total payments to New Zealand growers fell to $2.2 billion from $2.47b in 2022.
Zespri has the statutory right to export all New Zealand kiwifruit, except to Australia.
Dan Mathieson, Zespri chief executive. Photo / Supplied
With a pan-industry focus on fruit quality issues, a recovering labour force, and stronger prices for the current export season’s fruit, Mathieson believes the industry is moving from a tactical response mode back to its strategic focus on growth.
Providing volumes return, he hopes the New Zealand supply business segment will return to profit next year.
The industry has proved its resilience before. It recovered to become one of New Zealand’s blue chip export businesses in record time after its gold fruit sector was all but wiped out by Psa bacterial disease from 2010.
On the subject of where he is based, Mathieson said it should be noted Zespri had a strong team in New Zealand.
“[They] are focused on these issues and are working with industry leaders. It’s not just Zespri but the whole industry that has had to respond - growers, post-harvest, and Zespri, with the supply chain challenges and investment in markets and partners.
“It’s very much a pan-industry response.”
Zespri’s 2800 New Zealand-season growers weren’t alone in weathering challenges.
The company has a 20-year-old global supply business with around 1500 suppliers to try to achieve a 12 month supply of Zespri-branded fruit on the world’s shop shelves.
It works with growers in Italy, France, Japan and Korea to supply the best-seller, Zespri SunGold kiwifruit and to procure Zespri Green fruit from Italy and Greece.
Zespri’s FY23 annual report said the impacts of hot weather in the 2022 Northern Hemisphere season resulted in volumes for the overseas business falling 20 per cent below expectations.
Sustained heat was the biggest concern across all regions, said the annual report.
Regular temperatures above 35C significantly impact plant health and fruit growth, and growing regions in Italy and France experienced up to four times the number of days above this temperature compared with the previous season.
The impact for the overseas business was lower yields, smaller fruit size and reduced storage quality.
In the 2022-2023 financial year, the business made sales of $519m from 16m trays of SunGold and nine million trays of Zespri Green. This contributed $29.5m to corporate profit.
The annual report said the Zespri Global Supply business was expected to grow strongly in the coming years.
However, it said although volumes were increasing as new orchards matured, the business would not be able to achieve 12 month supply based on the total 5000ha overseas growing limit placed on Zespri by its New Zealand grower owners, past and present.
In 2022 they voted against a bid by Zespri to increase its allowable growing hectarage overseas.
The company focus on achieving maximum production from the 5000ha currently approved, and the completion of planting across this area, would result in a doubling of current offshore-produced fruit volumes when orchards are fully mature, the annual report said.
Andrea Fox joined the Herald as a senior business journalist in 2018 and specialises in writing about the dairy industry, agribusiness, exporting and the logistics sector and supply chains.
