History
THE BEGINNINGS
Kiwifruit seeds were first brought into New Zealand from China in 1904 by Isabel Fraser who was a teacher hailing from Whanganui. At the time, kiwifruit was known by its Chinese name Yang Tao and English names Chinese Gooseberry and Monkey Peach. In 1928, New Zealand grower Hayward Wright bred a cultivar of kiwifruit known as ‘Hayward’. This is still the most widely grown green variety worldwide.
The first kiwifruit exports were in 1952. The exports went to England from Jim McLoughlin’s orchard on Number 3 Road, Te Puke. The name change to “Kiwifruit” didn’t occur until 1959, when exports to the USA market commenced to Frieda’s Inc. a privately owned company, based in Los Alamitos, California.
Freida Caplan felt that the name Chinese Gooseberry was not iconic for a fruit that was being grown and imported from New Zealand. Together with Jack Turner from Turners and Growers, the name Kiwifruit was developed and adopted.
The association with New Zealand and the name Kiwi is understood to have come about due to American soldiers in both World Wars naming the New Zealand soldiers as “Kiwis” after the association with the Kiwi boot polish.
Kiwi is a global brand of boot polish, originally developed in Australia in 1906 by William Ramsay. Its success in Australia was matched overseas after it was adopted by the New Zealand, British and United States armies in both World Wars due to its waterproofing properties.
Ramsay named it “Kiwi” after the flightless bird native to New Zealand, the home country of his wife, Annie Elizabeth Meek.
The spread of Kiwi shoe polish around the world enhanced the popular appeal of the kiwi as New Zealand’s national symbol and the name for its citizens.
Isabel Fraser
Hayward Wright
Kiwi Boot Polish
1960 – 1980
New Zealand’s kiwifruit industry is youthful in comparison to many other primary industries. Its real commercial beginnings sit in the 1960s. The first industry body, the Kiwifruit Export Promotion Committee, was formed in 1970. This led to the New Zealand Kiwifruit Authority (NZKA), which was established in October 1977.
The structure of NZKA was very different to what exists today with its role being to license exporters, such as Turners and Growers, the New Zealand Fruitgrowers’ Federation and Auckland Export. At its peak the NZKA had up to seven exporters licensed.
As well as licensing, the NZKA coordinated packaging and had authority over export grade standards and promotion, but it had no control over sales and marketing activities.
The first commercial exports of kiwifruit showing the packaging and advertisements of the era
1980 – 1990
From the mid-1980s production was booming. In 1981 for example, 22,000 tonnes of kiwifruit were exported. By 1987, that had risen to 203,000 tonnes. Over the same period the return to growers per tray had dropped from $7.84 in 1981 to $3.00 in 1987. This resulted in 91 percent of growers making a loss from their kiwifruit operations. A dramatic rise in the New Zealand dollar (NZD) in 1987, followed by inflation reducing policies by the Reserve Bank of New Zealand (RBNZ), led to interest rates reaching their peak at 20.5% in June 1987.
Over-production along with the rise of the NZD made the price of New Zealand kiwifruit expensive in overseas markets and therefore reduced demand. The lack of returns combined with kiwifruit land values falling led to an equity crisis for many growers. This was the turning point that started the debate about the advantages of having one exporter (known today as Single Point of Entry or SPE) over multiple exporters.
In 1987, because of heated debate on the topic, the NZKA engaged a consultant’s report. A referendum was then held in September 1988. The industry’s set target was to get 80% grower support for the SPE. The fall in export prices and the undercutting between the seven kiwifruit exporters were key arguments in favour of the creation of the SPE. In the end, 84% of growers supported the creation of the Kiwifruit Marketing Board with statutory powers to buy all kiwifruit that was to be exported. The New Zealand Kiwifruit Marketing Board (NZKMB) came into being and its first season of operation was 1989/90. This ended the multi-exporter regime and replaced it with the single desk marketing structure that the kiwifruit industry has today. This foresight has allowed New Zealand kiwifruit growers to collectively develop their industry into a global business with concerted investment in branding, marketing, quality, and research and development.
1990 – 2000
The 1992/93 season was a disaster for the New Zealand kiwifruit industry. New Zealand and international kiwifruit volumes continued to grow, and problems came to a peak during this season as a result of various factors such as bad management and governance. The NZKMB got into serious difficulty with growers being over-paid resulting in massive debt. The NZKMB with strong grower support reacted decisively, and the debt was paid off over the ensuing 18 months.
Because of what had occurred, the industry put in place a three-stage review that incorporated major structural change.
1. New Zealand Kiwifruit Growers Incorporated (NZKGI) became operational in July 1994.
2. Marketing and branding were reviewed which led to the creation of the Zespri brand, which was launched in the 1996/97 season, and the creation of Zespri as a separate marketing and sales organisation.
3. Corporatisation, collaborative marketing and the industry’s operational structures were looked at and as a result, a report was presented to NZKGI. A referendum was held, and the structure of the industry altered (in 1996/97) to include three separate organisations – NZKGI, which was already functioning as the representation organisation for kiwifruit growers, Zespri as a marketing company, and other industry functions were operated by the NZKMB.
The positive results of the three-stage review included the formation of the Zespri business, the establishment of collaborative marketing, and a more efficient on-shore operational structure. The three-stage review also incorporated 12-month supply, new varieties and plant breeding. It was in 1997 that Zespri Gold was launched on a commercial basis and was the first time there was an alternate successful variety to the Hayward. Furthermore, the three-stage review formed the basis of today’s kiwifruit industry, and the way in which it operates.
THE EARLY 2000s
April 1, 2000 saw the launch of the Zespri Group Ltd – Zespri was officially corporatised. All growers at that time become shareholders in the Zespri Group Ltd, with the number of shares equivalent to the number of trays produced by growers. The following year saw turmoil within the Apple and Pear Board, which was taken over and subsequently deregulated. The kiwifruit industry structure was different in that only growers could have shares.
In 2001, a change to kiwifruit legislation occurred. A voting cap was introduced to ensure growers retained control of the industry. The maximum number of votes a grower could have was based on production and hence a direct link between production and voting rights was established. No significant further review of the kiwifruit industry has been held until the Kiwifruit Industry Strategy Project (KISP) that was launched in 2014.
2010 ONWARDS AND THE ESTABLISHMENT OF KISP
In 2014, the Kiwifruit Industry Strategy Project (KISP) was established with the aim of developing a strategy to achieve the industry’s long-term market, strategic and financial goals for the benefit of New Zealand’s kiwifruit growers.
To help shape the core KISP principles and guidelines, the Industry Advisory Council (IAC) appointed a working group made up from the three corners of the industry structure – growers, postharvest and Zespri. The KISP project began by establishing a broadly agreed set of key principles to guide industry discussion and decision-making when agreeing to a long-term strategy for the New Zealand kiwifruit industry.
These Key Principles Included:
KISP Framework
The New Zealand kiwifruit industry must act responsibly and ethically on all economic, sustainability, environmental, social and regulatory issues to the benefit of New Zealand kiwifruit growers and the wider New Zealand community.
Single Point of Entry (SPE)
The Single Point of Entry is retained and enhanced to maximise its performance for New Zealand kiwifruit growers.
Industry Governance
Given the increasingly competitive international market, Zespri governance must meet world-best practice standards so that it delivers on its purpose. • Effective leadership and governance of all industry structures must be supported by effective New Zealand kiwifruit grower control, representation and consultation.
Zespri Ownership
New Zealand kiwifruit growers must own and control Zespri and be the main beneficiaries of Zespri performance.
Marketing
Zespri’s purpose is to be the “best in class” international branded kiwifruit sales and marketing organisation to ensure a sustainable New Zealand kiwifruit industry that maximises New Zealand kiwifruit grower returns. Zespri-branded kiwifruit is the best available kiwifruit around the world 12 months of the year for the overall benefit of New Zealand kiwifruit growers. The New Zealand kiwifruit industry must have a process to evaluate and implement genuine innovative commercial and marketing ideas, including collaborative marketing, that are aligned to Zespri’s global marketing strategy and for the long-term benefit of New Zealand kiwifruit growers.
Supply Chain Effectiveness
The New Zealand kiwifruit industry must have an efficient, competitive and responsive onshore postharvest sector that is aligned with the industry strategy, offering grower choice that is integrated into an efficient global supply chain. The New Zealand kiwifruit industry must have a world-class global supply chain from orchard to consumer.
Innovation
To maximise the New Zealand kiwifruit industry’s global competitive advantage, the New Zealand kiwifruit industry must continue to develop and implement a world-class and sustainable R&D programme. As an integral part of the SPE, the New Zealand kiwifruit industry must have the ability to develop, own, licence, control and maximise the value generated from the world’s leading portfolio of kiwifruit Plant Variety Right varieties.
Funding
Zespri is funded and remunerated appropriately to ensure it can deliver the full scope of its responsibilities.
KISP Principles Established
In a referendum held in March 2015, New Zealand kiwifruit growers turned out in record numbers to vote on the proposed KISP Principles developed by the KISP working group. Two thirds of New Zealand growers representing 80 percent of production voted in the Kiwifruit Industry Strategy Project referendum. 91% of growers who voted supported the ten propositions. The key results in the referendum were:
• 98% of growers supporting the industry’s Single Point of Entry structure
• 92% of growers supporting the implementation of a cap on Zespri share-holding
• 91% of growers supporting a change to how Zespri is funded to maximise returns to New Zealand growers
• 94% of growers supporting changes to their industry representation to ensure they determine grower equity decisions about grower payments
Following the referendum, the KISP group asked the Ministry for Primary Industries to revise the Kiwifruit Regulations to allow implementation of the KISP recommendations. MPI issued a public consultation paper in early 2016 and a revision of the Kiwifruit Regulations was announced in August 2016.
Amendment of Kiwifruit Regulations
In July 2017, an amendment was made to the Kiwifruit Export Regulations which resulted from growers requests in the 2015 KISP Referendum. The revised regulations address three main areas:
• Shareholder alignment;
• Zespri’s core business, and;
• The governance and funding of the regulator Kiwifruit New Zealand (KNZ).
The regulations enable Zespri to make changes to its constitution to allow for greater alignment between Growers and shareholders. The regulations also expand the definition of core business which is expected to provide stability to Zespri as the industry grows, maximizing the wealth of New Zealand kiwifruit Growers. The regulations have made significant changes to the governance and funding of KNZ and while growers no longer had a majority on the KNZ Board, independent expertise was made available. As supported by the KISP referendum, KNZ also have greater flexibility in funding their operations but also enhanced reporting requirements.
Changes for Zespri Shareholders
In March 2018, Zespri shareholders voted on changes to the Zespri constitution to strengthen grower ownership and control of Zespri. Growers are now entitled to hold up to 6 shares per every tray of production (production is calculated by taking the average of the best 2 of the last 5 seasons). Overshared shareholders are required to sell their overshared portion within a set amount of time (usually 3 years). Shareholders without production (termed dry shareholders e.g., retired growers) stop receiving dividend payments after a set time (3 years) after becoming dry. Shareholders can vote at Zespri Annual Meeting each year, with votes capped at one vote per share or one vote per tray of production, whichever is the lesser. It is not compulsory for growers to own shares. In 2024, below 47% of growers are shareholders.