The head of the New Zealand Kiwifruit Growers organisation, NZKGI, acknowledged the insights from a report by Waikato University professor Frank Scrimgeour, noting they were anticipated by industry stakeholders.
The report, accessed by Hort News, detailed concerns, including that fewer than half of kiwifruit growers are Zespri shareholders. Furthermore, it highlighted that profitability for green kiwifruit growers has declined when adjusted for inflation.
Scrimgeour's analysis covers several challenges: Zespri's governance quality, operational efficiency, post-harvest performance, environmental factors, and the industry's social license. He emphasizes the necessity for supply chain optimization, stating, "Current allocations of responsibilities result in excessive fruit wastage, and managers in both Zespri and post-harvest operators are not working to their comparative advantage." Despite not having changed structurally since 2000, the kiwifruit sector's export volumes have risen, which Scrimgeour suggests needs addressing for improved performance.
Colin Bond highlighted the timing of the report, noting that grower profitability in 2022 and 2023 faced pressure, contributing to industry volatility. "If I think of green growers in particular, they were certainly under pressure during that period, but the returns from last year and the potential returns from this year should see the majority of green growers return to some pretty strong levels of profitability," Bond stated.
Addressing the introduction of the RubyRed variety, Bond remarked on the growers' experiences, stating that while the gold variety is perceived as easier to cultivate, seasoned red growers achieve favorable results. He emphasized the importance of pushing Zespri to invest in research to capitalize on the opportunities presented by the red variety.
Responding to governance concerns, Bond recognized that these are not unique to Zespri but are prevalent across industries. On the issue of 47% shareholder participation, he clarified that shareholding is non-compulsory; growers may have their reasons, such as preferring orchard investment over shares or new investors opting out of share purchases.
Zespri shares are valued at around $6 currently. Bond expressed that NZKGI encourages growers to consider shareholding within their sector.
Source: HortNews
