Struggling kiwifruit growers ask why Zespri CEO is based in Singapore when times are hard

Chief executive Dan Mathieson at Zespri's Mt Maunganui headquarters. Photo / Alan Gibson

Kiwifruit growers have questioned whether Zespri’s Singapore-based chief executive Dan Mathieson is “visible” enough as the multi-billion industry weathers tough times.

Grower earnings and crop volumes have fallen as a result of a cocktail of extreme weather, a Covid-fuelled severe labour shortage, rising costs and fruit quality issues in the past 24 months. Zespri’s profitability has also been affected.

Colin Bond, chief executive of grower representative body New Zealand Kiwifruit Growers’ Inc (NZKGI), said there had been “feedback from growers about Dan’s location”.

“Particularly, it comes down to the state of the industry at the moment - have we got enough visibility of the CEO?” said Bond.

The issue was less about Mathieson being overseas, than about the importance of the CEO being visible.

“Because of the challenges of recent years, [fruit] quality being the first one, and with profitability under pressure, now is the time we need strong leadership in the industry. That’s why we are getting comments about Dan’s location.”

Bond said while Mathieson is correct in saying he’s been in New Zealand more than offshore in the past two years, it hasn’t quelled comment among Zespri’s 2800 New Zealand growers.

“I guess when he is in New Zealand growers aren’t always seeing him but know his home base in Singapore. Sometimes I think they are defaulting to that rather than appreciating that actually, he’s doing what he can to be present in New Zealand.”

Zespri chairman Bruce Cameron said the board based the chief executive offshore “to ensure he is closer to the 50 markets and 20 office locations with around half of Zespri’s people where we operate on behalf of growers”.

The intention was for Mathieson to balance his time between New Zealand, Singapore and Zespri markets “and this has been working very well for us”.

“The importance of Dan being offshore was also underlined during the quality challenges of the past two seasons.

“It meant that while Zespri worked with the industry to address the quality issues, Dan was also supporting our teams around the world, and [fronting up] to customers to reassure them the industry would respond and ensure those relationships were maintained so we could the get the best possible result back to growers last year and this season, under a very challenging set of circumstances for the industry.”

Zespri has the statutory right to export all kiwifruit, except to Australia.

Bond said NZKGI had “informally” passed the message to Zespri’s board “that it’s important that not just the CEO, but senior Zespri management, are visible given the challenges”.

He said the message had been “acknowledged and accepted” with confirmation Mathieson had been spending “a lot of his time here”.

Bay of Plenty kiwifruit orchardist David Jensen is “not hugely concerned” about Mathieson’s base being Singapore, but suggests the local leadership performance on the New Zealand supply chain side has been less than optimal.

Fruit quality losses and costs topped $500m in FY23, meaning Zespri had this much less to pay growers. The previous year the cost was $300m.

“It’s all about selling fruit so having your CEO close to the biggest markets we have, Japan, Korea, China and the like, I think has some logic to it,” Jensen said.

“The decision was made pre-Covid so you have to keep that in mind. Being close to the market is a good thing. Covid made it really hard.

“The other assumption was if you had your CEO offshore, you would have a strong local team doing the front-facing stuff with growers and shareholders but also handling the operational side, the supply chain side.

“As a grower, I think it’s fair to say that part of the business has been a little sub-optimal in the past two years.”

Jensen is a director of New Zealand’s biggest kiwifruit post-harvest company EastPack, but emphasised he was speaking as a grower.

He said part of the problem had been Covid, which meant Mathieson “struggled to be in two places at once”.

“Part of it is the whole culture and policy that sits within Zespri, which I don’t think grasped the size of that challenge quickly enough. Zespri didn’t police quality well enough onshore and then struggled to deal with it offshore.”

Jensen said there had been “angst” about fruit quality in the industry for the past couple of years “a lot of it around the supply chain piece”.

However, he said it was important to remember that the price growers got for their fruit when it navigated the supply chain was “actually pretty good”.

“The sales side held up well. But it was tripped up a bit by the supply side.

“Not all of that is Zespri’s fault. Only 18 months ago we were desperately short of people so the quality of people we were employing right through the supply chain from picking to packing was severely compromised. That had some impacts on the processes which weed out poor quality fruit and manage those systems.”

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.