Outgoing Zespri CEO reflects on golden era

Dan Mathieson hands over the reins as Zespri chief executive to Jason Te Brake this week after some seven years at the helm of the kiwifruit marketer.

Mathieson is leaving Zespri after more than 20 years with the organisation to take over as president of the Americas for global berry giant, Driscoll’s.

Some 450 Zespri staff and growers bid a final farewell to their departing CEO during special functions at the group’s headquarters in Mount Maunganui last week. Mathieson was recognised for his outstanding leadership over a decade which has seen remarkable growth for the organisation but also significant challenges in recent years.

Speaking to Fruitnet, Mathieson highlighted how much bigger Zespri is today as a business compared with when he took over in September 2017.

“One of the things I am proudest of over this period is the phenomenal growth we’ve seen,” said Mathieson.

“In 2017, our total volumes were around 140m trays. This year, we’re forecast to reach around 215m trays globally, so that’s a 53 per cent growth.”

“What’s more important though is the value growth. We’ve gone from around NZ$2.4bn back in that 2017/18 year to this year’s forecast just above the NZ$4.6bn-mark. That’s a 94 per cent increase in revenue. 

“Within that, we’ve seen strong per hectare returns for our kiwifruit as well. Green returns have grown by 43 per cent from where they were in 2017/18 and gold are up 33 per cent.”

People powers

Mathieson also singled out the “values-driven culture” Zespri has built with its people as one of his proudest achievements.

“It all starts from having a purpose-led, values-driven culture,” he said. “When you get a culture that’s working well, all your employees work harder every day to make decisions work better in terms of execution. You then attract great people, and those people come in and help you refine and execute the strategy. And that all flows through to the best chance you’ve got of creating sustained success.

“It’s something we’ve worked hard on building with our Zespri people right across the world. Having a clear idea of what our purpose is, what our values are, and what our strategy is, and making sure that’s aligned through to execution.”

Investment fuels expansion

Mathieson began to implement a market development strategy for Zespri in 2015 while serving as president of global sales and marketing, based in Japan. He said the board’s backing to implement this market-led strategy even before he became CEO was key to driving growth.

“We worked aggressively to open-up new markets. We were employing 50-100 people a year for four or five years in a row to make sure that we had a market base to keep demand ahead of supply.”

Zespri also began to ramp up plantings of SunGold kiwifruit during this period. “We planted over 750 hectares a year for over four years, which is one of the big growth stories in the fresh fruit basket,” he said.

“To have the board’s support for that, and the significant investment, was critical to our growth. We’ve been able to execute on that strategy even through the challenges we’ve faced with climate change, weather events and the Covid period.”

Challenging years 

Indeed, the past few years brought exceptionally challenging conditions for Mathieson and Zespri’s executive team to navigate. Covid-induced labour shortages during the 2022 season resulted in poor harvest practices. This, coupled with climatic setbacks and logistics disruption, led to major quality outturn issues in-market, ultimately resulting in a NZ$500m bill for quality losses.

Challenging weather events throughout the 2023 growing season led to a much smaller crop than usual, lowering revenues and increasing financial pressures. On a brighter note, Zespri’s Quality Action Plan – implemented on the back of its poor harvest in 2022 – produced immediate results, with a ‘return to form’ on quality and much-improved grower returns.

And this year the industry is completing a turnaround in fortunes as production rebounds. Improved yields and the country’s largest-ever crop of 197m packed trays in 2024/25 has put Zespri on course to deliver strong returns to its member growers and back on track to achieve its ten-year target of reaching $4.5bn by 2025.

Mathieson said he is particularly happy with the improvement in orchard gate returns for green kiwifruit.

“In the green space, we’ve taken that orchard gate return from less than NZ$4 back in 2017 to NZ$9.55 last year, on low yields. And this year we should be back at over NZ$8, or around NZ$85,000 per hectare on average, which will be the best per hectare returns we’ve delivered by a long way.”

Getting red going

Turning to more recent developments, Mathieson said he is excited about the rise of red kiwifruit for Zespri.

“To get the red category going is something we’d been wanting to do for a long time, but we didn’t have the right variety,” he explained.

“As a category, it’s still very much in its infancy, at 1.5m trays this year versus 124m trays of SunGold, but we’ve seen a very strong response from our consumers around the world.

“We’ve got some challenges in there – a smaller size profile, getting the yield up for growers – but it’s actually working well at this early stage.”

Commenting on shelf life, Mathieson said red is storing well in its intended eight week-window right now. In the future, he said that both storage life and the supply window will lengthen as new and improved varieties come through Zespri’s pipeline.

Global sourcing

Another key focus under Mathieson’s leadership has been to grow Zespri’s offshore Northern Hemisphere production to develop year-round supply of the brand – something he cites as critical to the industry’s ongoing success and ability to deliver value.

“In 2017/18, we were doing NZ$260m in sales of offshore fruit. In 2023/24, we’ve done NZ$712m, so that’s an increase of 170 per cent over that period. 

“In Korea, we harvested a million trays this year, and we’ll soon reach 1.5m. Japan will hit a million trays in the next couple of years. Our Italy business is now starting to get better yields and quality across the board. And we’re also looking at much stronger growth off a smaller base in France with a lot more green sourced out of Greece than previously.”

At around 30m trays, offshore production is still a fraction of New Zealand supply, however. Zespri has already reached the threshold of offshore plantings approved by growers in New Zealand – capped at 5,000ha for SunGold. Mathieson said it is now in discussion with growers around increasing this. “We’re well short of our demand picture on current plantings,” he noted.

Zespri must get an approval rate of 75 per cent to expand plantings. It proposed to elevate the caps in 2022, but the proposal failed to pass a vote with growers, falling just short of 70 per cent. Growers expressed concerns about oversupply and the maintenance of fruit quality amid a range of challenges confronting the industry at the time, but Mathieson said they are more positive this year.

“Clearly, we were in a period of challenging times within the industry with lower grower returns and the impacts of climate change and lack of labour. Now, on the back of better quality and stronger returns in 2023 and 2024, it’s time go back and have another discussion.”

Sourcing from China is a more sensitive issue with growers, and one that Zespri won’t be revisiting this year, according to Mathieson. But he said the company is monitoring unlicensed production of Zespri kiwifruit varieties in China closely.

“We think there’s over 8,000 hectares of unauthorised G3 (SunGold) grown in China today. We’re taking legal action where we can, but it’s certainly something that concerns us for the future. So we’re going to want to have a discussion about pathways forward with growers. That’s not likely to happen this year, it will be in the years ahead.”

Future focus

With Zespri’s New Zealand production set to ramp up over the coming years, Mathieson said maintaining quality is key, and that will require continued investment in its supply chain.

“It’s vital that as we grow, we can maintain quality. We got hit really hard in 2022 with climatic events and lack of people. And that caused a lot of friction throughout the supply chain,” he said. “So this is going to be a major focus. We know we’ve got a strong brand, and we know that when we get great quality, we can sell it well and achieve good returns back to growers. But we need a supply chain that’s future-fit, that’s going to be resilient and agile enough when we face climatic events.”

Another major focus of investment will be Zespri’s innovation pipeline, not only in terms of bringing through new varieties, but also in developing more environmentally friendly packaging and cutting carbon emissions across the supply chain.

“Better water management will also be key,” he added. “Water is becoming a scarcity in growing regions around the world, so we need to ensure we have a growing environment that minimises water usage.”

Mathieson highlights technology and automation as the other priorities. “We’re still heavily dependent on people to make our business work,” he said. “And as we look to business that could double in size over the next decade, we’re going to have to find ways to lessen our dependency on people.”

In safe hands

Mathieson is very confident Zespri’s momentum will continue to build under the leadership of incoming CEO Jason Te Brake.

“Jason is just an exceptional person and leader. He’s been with Zespri now for five years. In every role he’s gone into – from commercial manager to head of New Zealand supply through to chief operating officer – he’s continued to excel,” said Mathieson. “We also have a very strong team of executives who have been with the business a long time, and a very experienced board. So from a leadership and governance perspective we’re in good shape.”

Beyond this though, Mathieson again highlights the strong culture Zespri has built throughout the organisation. “That culture is about personal ownership – the sort of organisation where you are responsible. You need to act like an owner, take on that information and be accountable for those results. With the leadership we’ve got coming through, the clear strategy we have, and Jason’s vision for the future, we’re in a very good place to continue to build on the success we’ve had.”

Global distributor workshop

Zespri’s Te Brake and new chairman Nathan Flowerday are visiting Shanghai this week as the company brings together its international distributors for a global learning workshop.

“We’re bringing together CEOs and managers of our distribution partners from multiple markets all over the world in Shanghai to share best practice, both from a Zespri perspective and in terms of wider industry innovation,” said Mathieson.

“We’ve chosen to go to China because of the speed of change there. Our distributors can see the state-of-the-art distribution facilities, the partnerships and joint planning we have with retailers, and the ongoing growth of e-commerce channels and so on. It’s an investment we want to make to continue to grow the business for the future.”