Scales purchases Bostock orchards

Scales Corporation has announced the acquisition of 240ha of planted orchard area, including 110ha of Dazzle, and stake in juice concentrate operation Profruit from Bostock Group for NZ$47.5m.

At the same time grower-packer-exporter Mr Apple – which is part of Scales’ horticulture division – will put up for sale its Blyth and Te Papa orchards with a combined planted area of approximately 186ha. The move is part of Scales’ strategy to improve Mr Apple’s margins. 

“By acquiring the Bostock orchards and selling these existing orchards, Mr Apple will broadly maintain its total orchard area while achieving a meaningful uplift in its premium variety volumes,” Scales said in a release.

Scales managing director, Andy Borland, said the company was pleased to announce the transaction.

“We are extremely pleased to announce our transaction with John Bostock today. Scales and Mr Apple have worked closely with John Bostock and his team over multiple decades and expect to continue to work closely together to collectively grow the industry,” said Borland.

“Bostock orchards are renowned for their premium quality produce and the orchards being transferred are optimally located, with strong strategic alignment to existing Mr Apple orchards.”

The acquired orchards include a high concentration of Dazzle plantings – approximately 110ha – as well as high-colour Fuji and Royal Gala plantings. This is set to help increase Mr Apple’s premium offering with premium fruit expected to represent nearly 80 per cent of Mr Apple’s 2025 fruit sales compared with 64 per cent in 2023.

“Our Mr Apple strategy is to focus on the sale of premium varieties to Asia and the Middle East markets, and drive improved margins from Mr Apple’s existing level of assets employed rather than expanding its asset base. The transactions announced will achieve those objectives.

“Dazzle has been a highly successful variety for Mr Apple, and this transaction materially accelerates our strategy of increasing Dazzle volumes. By inheriting mostly mature blocks we will have higher volumes of Dazzle apples from 2025.”

Bostock Group managing director, John Bostock also expressed his satisfaction with the sale. 

“I am especially pleased that Scales is acquiring these orchards. The distinction between ‘organic’ and ‘conventional’ fruit is of a lower significance in Asia, where Dazzle has strong market appeal.

“It is a natural fit for these orchards to be operated by Mr Apple and for the Bostock group to continue to service its customers in other markets with Bostock’s other varieties. There is a strong cultural alignment between our two businesses, and I feel confident that any staff moving between the growers will find themselves well at home at Mr Apple.” 

Scales chair Mike Petersen said, “migrating our orchard mix to favour higher percentages of premium varieties, especially those varieties for which we have proprietary rights, is a core strategic imperative for Mr Apple as well as New Zealand’s broader horticultural industry.

“PVR varieties, such as Dazzle, are more sought after than our traditional varieties, reflecting the superior colour qualities and eating experience. This allows the industry to continue to invest, innovate and expand whilst also creating high-value employment opportunities. Profruit is an extremely well-run business and we are very pleased to move to outright ownership.”

The transaction is subject to customary closing conditions and expected to complete in early to mid-June 2024, while the Mr Apple orchard sales are not expected to conclude until the second half of the year.