Zespri’s profit dives after tough growing season but most growers see record average tray returns

RubyRed is the first kiwifruit variety to be harvested at the start of the season.

Kiwifruit export marketer Zespri has posted a $65 million fall in net profit after tax for the 2023-2024 year after a difficult growing season, lower global sales and reduced income from growing licences.

However, the season had delivered record average per-tray returns to growers across all fruit varieties except organic SunGold, the grower-owned company said.

Net profit after tax was $173.3m, down from $238.7m in 2022-2023, mainly driven by reduced licence revenue from lower pricing per hectare than the previous season.

Global operating revenue was $4.21 billion, including licence revenue, flat on the previous season’s $4.22b.

Global fruit sales revenue was $3.99b.

Chief executive Dan Mathieson, who will exit the Bay of Plenty-based company shortly for a new job in the US berry industry, said the difficult growing season resulted in sales volumes falling 10.5 per cent to 164.2 million trays but global sales increased 2 per cent to $3.99b.

That was a reflection of improved fruit quality and strong pricing secured by Zespri throughout the season, he said.

The total dividend was 85c per share.

Mathieson said results reflected the industry’s united effort to lift fruit quality, which had plunged the previous year due to severe weather events and labour shortages, as well as strong consumer demand for Zespri fruit.

He noted the significant increase in returns for green fruit growers, up from $5.78 to $9.55 per tray.

Many green fruit growers have struggled to make ends meet on orchards in recent seasons due to tough growing conditions and rising costs.

Mathieson said there were standout results in some of Zespri’s major markets.

Europe sales had done well, particularly for the green fruit offering, and Japan also showed good value returns for green fruit.

“China was a standout in terms of being able to deliver strong value for SunGold,” Mathieson said.

SunGold is Zespri’s global bestseller.

The newly commercialised RubyRed variety was performing strongly, offering a good platform to start the new season in the Asia-Pacific markets, he said.

Organic fruit growers had had a tougher returns time, particularly on a per hectare earnings level due to a significant drop in yields.

The value of Zespri’s non-New Zealand-grown fruit sales rose to $654.2m, from $519.3m last season, due to increased sales volumes of 27.2 million trays, improved pricing and a reduction in quality costs.

Offshore production by contracted growers was critical to Zespri’s global supply strategy to ensure fruit was on global shelves throughout the year, to hold shelf space when the New Zealand season winds down, and to maintain retail and supply partnerships.

Mathieson said the new export season was off to a strong start.

Customer feedback on fruit quality had been positive and sales were exceeding expectations in key markets, he 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.