Zespri expects to deliver record returns to New Zealand growers across all fruit varieties this season. Photo / Susan Murray
The next chief executive of global kiwifruit marketer Zespri looks set to be based in New Zealand instead of overseas.
Outgoing chief executive Kiwi Dan Mathieson has been based in Singapore for seven years to be close to Zespri’s markets, though he spends a lot of his working year at home.
But Zespri chairman-elect Nathan Flowerday, in an update to growers, said while the company had commissioned a global search for a new chief executive, the board of directors’ preference is for the role to be based in New Zealand.
“This reflects their need to be strongly embedded in the industry as we focus on tackling the supply side challenges in New Zealand and resetting to take the industry forward,” he said.
“However as a sales and marketing company, the successful candidate will need to balance their time between New Zealand and offshore in order to provide leadership to our teams in market and to ensure strong engagement with our partner and customers.”
A switch of chief executive base is supported by growers’ advocate New Zealand Kiwifruit Growers Inc.
Chairman Mark Mayston said there was “an evident need for a chief executive who is primarily based onshore” as the industry works through its alignment issues.
“This would be particularly necessary for an external candidate to learn the unique synchronicities of our industry. As alignment becomes solidified over time, the focus of the CEO could become more directed towards our markets,” he said.
The kiwifruit industry is composed of three sectors: Zespri the marketer/exporter, growers and post-harvest operators. Zespri, which posted global operating revenue last year of $4.2 billion, is entitled by regulation to export all New Zealand kiwifruit, except to Australia.
Mathieson will leave the horticulture sector’s export leader after this season. He’s been with Zespri for 21 years, seven in the top job. His remuneration in FY2023 was $1.9m. Zespri chairman Bruce Cameron is retiring, chairing his final board meeting this week. He steps down from the board in August.
Flowerday said the intention was to have a new chief executive appointed by May or June. The start date would depend on the successful candidate’s circumstances. Mathieson would stay on through the recruitment process before taking up a new job with United States berry giant Driscoll’s.
News of the preference for a New Zealand-based chief executive comes as Zespri forecasts record per tray returns from this season from all fruit categories except organic SunGold.
Zespri’s total fruit and service payment to New Zealand growers is forecast to be $2.229 billion.
In its final forecasts for this season, the company has also lifted its own financial performance guidance for the year ending March 31, 2024.
The forecast range of corporate net profit after tax is $171 million to $176m, the upper end of November guidance range of $165m-$175m.
This was the result of a continued focus on identifying savings across corporate overheads, with resources prioritised to manage a significant lift in fruit volumes in 2024-2025, the update said.
Mathieson said a key driver of this season’s improved per tray returns had been a reduction in fruit quality loss costs. The export industry has been dogged by fruit quality issues in the two previous seasons, a result of a severe labour shortage during the Covid peak years, extreme weather events and supply chain issues.
Quality costs and losses totalled $534m in 2022-2023, meaning lower returns for Zespri’s 2800 New Zealand growers and leading to a smaller harvest this year.
Mathieson said green fruit returns in particular were looking better this season due to Zespri maximising value from lower volumes in Europe, as well as strong market performance in Japan and North America.
Global best-seller SunGold had experienced a lift in value in key markets while the recently commercialised RubyRed fruit continued to perform strongly, Mathieson said.
Organic green benefited from a strong lift in value in Europe and from Zespri maintaining volume levels in Japan despite the lower crop. Organic SunGold had been supported in its returns lift by strong market performances in Europe and North America.
“Downside risks considered in the forecast include unfavourable foreign exchange movement, particularly the Japanese yen, which is expected to remain an ongoing challenge as we move in the 2024-2025 season,” Mathieson said in the update.
“The season’s earlier finish driven by lower volumes also prevented us providing continuity to our retail partners and is seeing us have to reinvest (in marketing) ahead of the New Zealand season.
“With demand continuing to exceed our current (overseas contracted) supply, particularly in our shoulder season, we will continue to see greater competition for shelf space.”
Zespri’s updated grower returns forecast has SunGold fruit returning $12.62 per tray, compared to $12.35 forecast in November and a final per tray return of $9.97 in 2022-2023.
The February forecast 2023-2024 return for SunGold per hectare is $143,537. This compares to $140,451 in November and a final orchard gate return of $137,524 in 2022-2023.
The latest forecast per tray return for Zespri Green is $10.31, compared to $10.25 in the November forecast and a $6.87 final orchard gate return last season. Per hectare, green is forecast to return $48,326, compared to $48,057 guidance in November. Green fruit’s final per hectare return last season was $41,761.
RubyRed fruit is now forecast to return $26.54 per tray compared to $26.10 guidance in November. The return for this fruit per hectare is forecast to be $41,057 compared to the November forecast of $40,371. Last season red fruit’s final orchard gate return per hectare was $42,063.
Zespri said RubyRed was in its second year as a commercial offering. Forecast per hectare returns had been influenced by a high proportion of productive hectares returning low yields impacted by vine age.
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.
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