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Case study 3: Zespri

Published April 2011

Zespri logo.

Zespri is the exclusive marketer of New Zealand green, gold and organic kiwifruit, with a current annual turnover of NZD$1.5 billion.

The Zespri brand was launched in 1997 following a decision by New Zealand growers to represent the high quality New Zealand kiwifruit under a unique brand to maximize the sales revenue for growers.

Kiwifruit flowering.

Initially the business was in two parts with offices based in Auckland and Tauranga. A decision to bring these together in Tauranga was made in 2001, as 80% of the crop is produced in the Bay of Plenty (BOP) region and the major port for the export of the crop is also in the BOP. The remaining 20% of the crop comes from Nelson (5%), Northland, Auckland and Waikato (4% each), Gisborne (2%), Hawkes Bay and the Southern North Island (1% each).

Zespri employs approximately 240 people including 57 in Europe and 40 across Asia. A small number are based between the US and Australia, leaving 140 people in the Tauranga headquarters.

Kiwifruit origins

Wanganui teacher, Miss Isabel Fraser, brought the first Chinese gooseberry seeds to New Zealand in 1904. These were then cultivated by a horticulturist. The person responsible for the first New Zealand commercial kiwifruit was Hayward Wright who established the first kiwifruit orchard in the BOP and cultivated a green kiwifruit variety he then named after himself, Hayward. The Hayward variety is now the most commonly globally-grown kiwifruit.

Exports of green kiwifruit to the United Kingdom (UK) began in the 1950s when the name ‘kiwifruit’ was first used. After the Zespri brand was launched in 1997, exports of Zespri Gold kiwifruit began the following year.

Kiwifruit grading process.

Over the past 10 years, New Zealand sales volumes have almost doubled, from 52 million to 100 million trays. (A tray equivalent equals approximately 30 pieces of fruit.)

Zespri Gold is the industry success story. By 2013, volumes for Gold are expected to increase to around 33 million trays.

'Our industry’s success is directly attributable to our integrated structure, as well as the innovation, attitudes and commitment of growers, the post-harvest sector and other industry stakeholders.

It is quite extraordinary to think that – thanks to our track record of research and development, innovation, marketing excellence and productivity improvements – we can realistically plan to become a 3 billion dollar plus industry but still be using less of this country’s land resources than when we were far smaller – almost a fringe industry – back in the 1980s.

Nearly 100,000 seedlings have been, or are being evaluated as part of our innovation programme – the world’s largest – carried out in partnership with the New Zealand Government through Plant and Food Research.'

John Loughlin – ZESPRI Chairman

Business focus and functions

Flowering kiwifruit.

While the company is 100% grower-owned (by past and current growers), Zespri’s focus does not include the growing and packing of fruit. Rather, their focus is on connecting the market and its requirements and translating those needs back to the people who grow and pack the fruit, ensuring the product is in the right market at the right time and within each market's specifications.

Prior to Zespri, multiple exporters were competing to sell kiwifruit independently around the world. A large increase in crop volume meant that the overseas importers and retailers could put pressure on the industry to drive the prices right down, and in doing so, diminish the returns. As a result a decision was made to change from having a marketing board to having a corporate that would be responsible for the sales and marketing of the entire New Zealand crop.

Zespri’s business revolves around the sales, marketing, procurement, and logistics of the kiwifruit brand. They manage grower relationships in New Zealand and also procure fruit from around the world as well. Zespri has proprietary rights for the Gold variety, which allows them to produce gold kiwifruit in other countries. Currently Italy and France supply 80% of Zespri’s off shore supply. Italy is the largest country where this takes place but local production of Zespri licensed fruit is also used to help supply the domestic markets in Japan and Korea.

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