ZESPRI ANNUAL REVIEW

2008/09

FOCUSING
FOC
CUSI
S NG ON G
SI
GRO
GROWTH
RO
OWTH

ZESPRIs focus
is on growth.
Growing healthier, more vibrant ZESPRI Kiwifruit.
As the market leader in kiwifruit, managing 30 percent of globally traded
volume, ZESPRI carries a significant responsibility. We take this responsibility
very seriously by focusing on:
growing consistently great-tasting, healthy kiwifruit
growing the number of people around the world who regularly enjoy kiwifruit
growing returns for kiwifruit growers
Our shareholders are either New Zealand growers, or have been so in the
past, and have an active voice in the strategic direction of the industry.
In addition to our 2,700 New Zealand growers, we have partnered with over
1,300 growers around the world to leverage our strong customer relationships
and the ZESPRI Brand. We sell over 390,000 tonnes of premium quality kiwifruit
to over 60 countries every year. With 250 employees across offices in Asia,
Europe and North America, our head office is at the centre of New Zealands
kiwifruit region, Mount Maunganui. We work with growers and post-harvest
operators to source top quality ZESPRI Kiwifruit and supply this kiwifruit through
our distribution partners to wholesale markets and retail customers.

Contents
Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Future. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Chairman and Chief Executive Officers Review. . . . . . . . 3

The Taste ZESPRI Programme

Great-Tasting Kiwifruit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Sustainability The ZESPRI Way for Life . . . . . . . . . . . . . . . 17

The ZESPRI Brand Story. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Focusing on Improved
Operational Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Focusing on New Cultivars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Office Directory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

ZESPRI GREEN Kiwifruit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Notice of Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . 20

ZESPRI GOLD Kiwifruit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Financial Calendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

ZESPRI ORGANIC Kiwifruit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Focusing on The Health Benefits
of ZESPRI Kiwifruit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

The Financial Statements for the year ended 31 March 2009

are included in the 2008/09 Annual Report. A copy of the
2008/09 Annual Report can be obtained from www.zespri.com.

ZESPRI ANNUAL REVIEW 2008/09

2008/09

Highlights
Global ZESPRI Kiwifruit sales increased
25 percent from $1.16 billion to $1.45 billion
Global ZESPRI Kiwifruit volumes sold increased 11 percent from 98.0 million trays
to 108.7 million trays, with more than 100 million trays exported from New Zealand
for the first time
New Zealand Orchard Gate Returns per hectare increased 25 percent for ZESPRI
GREEN Kiwifruit, 14 percent for ZESPRI GREEN ORGANIC Kiwifruit and 32 percent
for ZESPRI GOLD Kiwifruit
ZESPRI net profit after tax increased 21 percent from $19.7 million to $23.9 million
Payments to the New Zealand industry (fruit and service payments and loyalty premium)
increased by 20 percent to $795.5 million (and by 12 percent to $7.76 per tray)
Over the past five years China, South East Asia and North America (our main growth
markets for New Zealand-sourced fruit) have achieved year-on-year growth of 27 percent
(4 million trays to 13.7 million trays) and currently account for 14 percent of the total
New Zealand crop sold (6 percent in 2003/04)
222 hectares of ZESPRI GOLD Kiwifruit licences were successfully tendered to New Zealand
growers during the year, completing the 600-hectare three-year placement programme
Over the past 10 years, New Zealand volumes sold have almost doubled from 51.8 million
to 100 million trays, and fruit and service payments (including loyalty premium) have grown
from $413.0 million to $795.5 million

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| ZESPRI ANNUAL REVIEW 2008/09

FOCUSING ON

The Future
A glance behind

In the 1999 season, ZESPRI sold 47.9 million trays

of ZESPRI GREEN Kiwifruit and 300,000 trays
of ZESPRI GOLD Kiwifruit from New Zealand.
In 2008/09, ZESPRI sold 72.7 million trays of
ZESPRI GREEN Kiwifruit, and 21.9 million trays
of ZESPRI GOLD Kiwifruit from New Zealand.
That represents a compound annual growth
rate of 8 percent.
A note on the business model
ZESPRIs core business is marketing, distribution management,
innovation and supply chain management for kiwifruit only.
New Zealand kiwifruit growers have created a unique company.
What ZESPRI doesnt do as a fruit business is also remarkable:
ZESPRI does not deal with any other fruit but kiwifruit
ZESPRI does not grow, pack, transport or distribute kiwifruit
What does the future look like?

Where will the growth come from?

The future is about growth. Assuming we maintain historical

growth rates we can expect volumes to almost double again in
the next 10 years. As we grow ZESPRI GOLD and introduce
new products, we anticipate less than half of this volume will
be the existing GREEN variety. There will be challenges, with
Chile forecasting an increase in production of their low-cost
commodity green offering by up to 100 percent in the next
five years. That means that the key to our continued success
lies in our rate of innovation and our ability to differentiate our
premium offering. We do expect steady growth of demand for
ZESPRI GREEN.

The integrated marketing structure creates a strong platform

for future growth. Specific opportunities which will enhance
such growth include:

ZESPRI GREEN Kiwifruit is the foundation of

the New Zealand kiwifruit industry. Building
value in the ZESPRI GREEN Kiwifruit business
will be achieved through growing market
demand, maintaining a strong focus on quality
and product differentiation supported through
the ZESPRI Brand, and the moderating effect
of new cultivars on the rate of growth of ZESPRI
GREEN Kiwifruit supply.

In mature markets, the growth will come from increasing

consumer pull through our marketing of superior-quality
kiwifruit. The health and taste platforms are critical for the
differentiation of our premium offering and for growth of
the category
Further development of established markets such as France,
Italy and the United States will focus on building our retail
penetration to extend market share. ZESPRI will support
growth in both mature and developing markets by increasing
investment in in-market personnel
Development of distribution in emerging markets such as
China, the Middle East, and South East Asia will deliver high
growth from a relatively modest base
The Family Kiwi Brand will be used to develop
emerging markets
There is significant further growth potential for
ZESPRI GOLD as new cultivars allow us to extend the sales
window both early and late
New cultivars which are significantly better than, or different
from, existing offerings will be commercialised
On the supply side, we anticipate that growers will continue
to innovate to drive yields and deliver the optimum size and
taste profile, while leading post-harvest operators are focusing
on both inventory management and lean manufacturing
methodologies to reduce costs
Twelve-month supply will be increasingly important as it
strengthens our distribution and supports consumer awareness
of the ZESPRI Brand

ZESPRI ANNUAL REVIEW 2008/09

Chairman and
Chief Executive
Officers Review
FOCUSING ON

Growth
2008/09 has seen a focus on
growth growing volumes,
growing markets, growing the
number of consumers who
regularly enjoy ZESPRI Kiwifruit
and growing returns for our
growers and shareholders.
This strong focus has delivered
more fruit shipped than ever
before, more fruit sold than
ever before, and improved
returns for ZESPRI growers.

Financial Review
Kiwifruit volumes from New Zealand increased by over 8 percent in 2008/09,
resulting in 100 million trays sold.
A combination of volume growth, optimised profile and firm pricing saw strong
growth in revenue and returns for all three ZESPRI categories ZESPRI GREEN,
ZESPRI GOLD and ZESPRI ORGANIC in almost all markets around the globe.
The strongest year-on-year performances came from Taiwan, Korea, China/
Hong Kong, South East Asia and North America. These countries are important
future growth markets for ZESPRI. Europe celebrated record sales of 60 million
trays of kiwifruit from New Zealand and other supply sources. Europe increased
demand for New Zealand-grown ZESPRI GREEN and ZESPRI GOLD with
11 percent and 18 percent respective increases over the previous year.
However, volumes of our GREEN fruit sold in Japan were down by 600,000 trays,
or around 6 percent. This was a reflection of a competitive fruit market, declining fruit
consumption and a difficult economic environment due to the global financial crisis.
While we have enjoyed strong growth for GOLD in Japan in recent years, we are
struggling to grow the demand of GREEN in the face of challenging market conditions
and trends.
The overall increase in volume and sales had a positive effect on ZESPRI Corporate
performance with net profit after tax increasing to $23.9 million, compared with
$19.7 million in the previous year.
During the year, ZESPRI successfully released the third tranche of ZESPRI GOLD
licences. The third tranche was the final stage in the current GOLD placement
programme, which has released a total of 600 New Zealand hectares for new
GOLD plantings over the last three years. Income from the new GOLD licences
in 2008/09 provided funding for a special dividend of 7.41 cents per share paid
in March 2009. Continued strong growth in GOLD, combined with early and late
market opportunities created by new GOLD varieties, is likely to create demand
for increased New Zealand GOLD plantings. We expect to have a clearer view of
the size and phasing of potential future GOLD plantings in the first half of 2010.

Global Kiwifruit Sales marketed by ZESPRI

2001/02*
2002/03*
2003/04*
2004/05*
2005/06*
2006/07**
2007/08**
2008/09**

794.7

New Zealand-grown kiwifruit

Non-New Zealand-grown kiwifruit

5.7

844.6

16.2

902.9

8.2
24.9

997.3
945.2

45.9
1,045.0
1,082.2

80.4
81.6
1,299.8

151.6

NZD (m)
* Reported under New Zealand Financial Reporting Standards (NZ FRS) / ** Reported under New Zealand International Financial Reporting Standards (NZ IFRS)
Note: excludes other revenue

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| ZESPRI ANNUAL REVIEW 2008/09

Despite the global downturn impacting markets in late 2008/09,

the ZESPRI Brand held its premium position in all markets. A
combination of improved pricing and optimised size delivered
a $50.0 million increase in sales revenue over the previous year.

Profitability
Net profit as a % of revenue
Net profit after tax

2.6

2.5

2.6
1.9

1.7

1.7

1.6

ZGL NPAT NZD (m)

26.5 26.4
22.9

0.9

23.9

22.1
19.7

ZGL NPAT as % Revenue

ZESPRI Group Limited

On the cost side, bunker fuel prices hit record highs of US$798
per tonne, which increased the cost of freight by $26.9 million.
Unfortunately, the bulk of our shipping occurred during the peak
in oil prices, resulting in an average per tonne rate of US$667 for
the season (compared with US$389 per tonne the prior year),
causing a significant increase in our freight costs. Other costs per
tray equivalent remained stable over the year, or decreased, as
we maintained focus on managing costs across the business.

14.4
7.2
*
9*
/0
08
**
20
8
/0
07
*
20
7*
/0
06
20
6*
/0
05
20
5*
/0
04
20
4*
/0
03
20
3*
/0
02
*
20
02

/
01
20

The significant increase in crop volumes and the

ability to maintain price premiums resulted in
total fruit and service payments rising 20 percent.
Payments were up $127.7 million to $779.0 million
(excluding loyalty payments) over the previous year.

* Reported under NZ FRS / ** Reported under NZ IFRS

Equity and Dividend Returned

Dividend
Equity

1.551
0.811

0.50
0.07 0.20

0.981

0.82
0.50
77.0
74.0
72.8
67.8 68.3

In addition, the rapid weakening of the New Zealand Dollar saw

a considerable upside in 2008/09, delivering an advantage of
$52.8 million to growers or $0.51 per tray over the prior year.

ZGL Dividend NZD

ZESPRI Group Limited

Orchard Gate Returns (OGR) increased by $96.6 million to

$439.9 million, a 28 percent increase over the previous period.
Supply chain costs increased in the 2008/09 year, due to
increased labour, transport and energy costs.
The spread of OGR earnings across growers is notable and an
issue for GREEN in particular, with some growers operating
below break-even and others making a satisfactory return on
investment. For GREEN, the most significant drivers of value at
orchard level remain Class 1 yield and size profile. While ZESPRIs
focus must remain firmly on market growth and innovation, we
are collaborating with growers on several initiatives, including our
Focus Orchard Network for sharing best practice, to help growers
make their orchards as profitable as possible.

ZGL Equity NZD (m)

53.9

35.2
22.3

*
9*
/0
08
**
20
8
/0
07
*
20
7*
/0
06
20
6*
/0
05
20
5*
/0
04
20
4*
/0
03
20
3*
/0
02
*
20
02

/
01
20

* Reported under NZ FRS / ** Reported under NZ IFRS

1 Includes

special dividends. 2008/09 = 7.41 cents per share,

2007/08 = 12.67 cents per share, 2005/06 = 45.00 cents per share.

Total Fruit and Service Payments

New Zealand-grown (excluding Loyalty Premium)

GREEN
GREEN ORGANIC
GOLD
OTHER

440.5

521.5
442.1

440.8

430.1
396.9

218.2
160.4

141.1

174.5

136.0

94.7
NZD (m)

25.8
2003/04*

24.0

23.9

15.9

2004/05*

* Reported under NZ FRS / ** Reported under NZ IFRS

21.5
2005/06*

14.7

21.5
2006/07**

11.2

23.6
2007/08**

11.1

27.1

12.2

2008/09**

ZESPRI ANNUAL REVIEW 2008/09

100 Million Trays

ZESPRI shipped more than 100 million trays of kiwifruit in
the 2008/09 season, marking a record for the New Zealand
kiwifruit industry. The milestone can be attributed to the
dedication, expertise and commitment of the approximately
25,000 people involved in the industry.
A ZESPRI celebration in November acknowledged the
collaborative effort of everyone involved our people, our
growers, our suppliers, Kiwifruit New Zealand, New Zealand
Kiwifruit Growers Incorporated, the Port of Tauranga and
our shipping partners.
100 million trays of ZESPRI Kiwifruit would fill 360
Olympic-sized swimming pools
If the fruit were placed end to end, 100 million trays of
ZESPRI Kiwifruit would wrap around the world five times
The 100 million trays shipped in 2008/09 amounted to an
increase of 96 percent on the volume shipped 10 years ago

The ZESPRI Board has announced an intention to declare a

final dividend of 56.00 cents per share. This is in addition to the
35.00 cents per share interim dividend paid in December 2008
and the 7.41 cents per share special dividend paid in March
2009, and will bring the total dividend payment for the year to
98.41 cents per share. This represents 100 percent of available
profits for distribution.

ZESPRI is committed to maximising the returns back

to our growers and shareholders. This is achieved via
fruit and service payments, shareholder dividends and
significant investment in research and development to
underpin our future competitive advantage. This is a
key benefit of our integrated industry structure.
Growing the Category New Cultivars
ZESPRI and Plant & Food Research, our research partner, manage
the worlds largest and most robust kiwifruit breeding programme.
This programme is focused on delivering the next generation of
ZESPRI Kiwifruit to meet the needs of consumers and increase
kiwifruits share of the consumer fruit bowl.
ZESPRI is positioned well to retain its market leadership position
and deliver sustainable returns to growers, by offering new
products which are genuinely different from, or better than
current varieties (refer to our new cultivars strategy on page 9).
Our rate of innovation, relative to our competitors, is a critical
factor in our success. Its about choosing cultivars that will
genuinely grow the category and differentiate ZESPRI in the
market, and its about providing wealth-creation opportunities
for ZESPRI growers. Our strategy is not about putting just any
available cultivar into the market.
ZESPRIs experience in commercialising new cultivars has been
honed through the success of ZESPRI GOLD, which is the gold
market leader and now has global revenues exceeding $468

million. Current plantings coming into production and strong

market demand mean the ZESPRI GOLD business will continue
to grow strongly over the next five years.
The four potential cultivars now undergoing field testing will
be rigorously trialled at every stage of the supply chain. The
investment and challenges required in commercialising new
cultivars mean that we need full research confidence to pick
the future winners of the kiwifruit category. The marketing
programme to launch the new cultivars will draw on the past
decades experience with ZESPRI GOLD, leveraging the sales,
distribution and marketing horsepower of the ZESPRI Brand,
to ensure successful commercialisation.
Non-New Zealand Supply
The year-round supply programme supports ZESPRIs brand and
distribution strength by partnering with growers around the world
to supply premium-quality kiwifruit to consumers outside of the
New Zealand supply window. Our programme supports New
Zealand growers by securing year round shelf space and is core
to our business. Despite disappointing performance of growing
ZESPRI GOLD in both California and Chile, the 12-month
programme is expanding in Italy, France, Korea and Japan.
The establishment of GOLD orchards in locations other than
New Zealand is a challenge for our offshore growers, matching
the supply of premium-quality fruit with unique growing
conditions and weather events. We have learned that success in
this business is about fewer and larger supply locations supported
by appropriate resources on the ground. Consequently, we have
made significant investments in local staff, and technical and
scientific assistance, to help improve growers understanding of
specific environmental factors that impact on orchard productivity.
In 2008/09, ZESPRI sold 8.7 million trays of fruit grown in
markets other than New Zealand Italy, France, South Korea,
North America, Chile and Japan generating $151.6 million in
revenue. This is an increase of 86 percent on the previous year
and represents over 10 percent of ZESPRIs total sales.

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| ZESPRI ANNUAL REVIEW 2008/09

Aragorn

New Markets

Following six years of exploring the GOLD processing business

and recent unsatisfactory returns, the ZESPRI Board has approved
a recommendation from management to implement a new
business model for Aragorn.

Growth in the kiwifruit category also comes from establishing new

markets. We are experiencing extraordinary levels of growth in
China (including Hong Kong) in particular sales volume this year
grew 28 percent over 2007/08. In recognition of this, and its future
potential, ZESPRI set up a new Chinese company in 2008/09. Ten
full-time employees across Shanghai, Beijing and Guangzhou will
focus on growing kiwifruits share of the consumer fruit bowl and
ZESPRIs share of the Chinese market. Supporting rapid growth
in a diverse and complex market such as China is challenging.
Resourcing this growth appropriately will be important both to
maximise the opportunity and to manage the associated risks.

This new business model for processing GOLD Kiwifruit will

be characterised by reduced inventory risk and working in
partnership with companies who have a core business in
processing horticultural products.
Brand
ZESPRIs success is a direct result of the strength of the ZESPRI
Brand which stands for vitality, premium quality and great taste.
Throughout 2008/09 we continued to invest heavily in the brand
implementing a new brand architecture to position ZESPRI
Kiwifruit as a premium product, with Family Kiwi as a value
offering in some countries to support market development.
Our critical mass enables us to deliver advertising and promotions
which leverage the ZESPRI Brand, while delivering compelling
messages to the local markets.
In Taiwan, the Vitality campaign to communicate the health
benefits of ZESPRI Kiwifruit was perfectly timed to match a
bicycle usage craze. This helped drive a 20 percent increase in
brand awareness amongst the target audience. We had a great
year in North America. North American ZESPRI marketing
programmes targeted influential groups such as media, dieticians
and mothers groups and broadened ZESPRIs reach, contributing
to a 25 percent increase in ZESPRI GREEN sales over 2007/08.
Health
Demonstrating the health benefits of our kiwifruit to consumers
is vital for growing our markets. Eighty percent of our sales come
from 30 percent of our consumers who eat kiwifruit primarily
because they like the taste and because of its health benefits.
Scientific research to quantify the health benefits of ZESPRI
Kiwifruit is a fundamental part of our strategy and, over the past
year, has delivered strong results. Studies have demonstrated that
eating ZESPRI Kiwifruit enhances the bodys natural immunity;
helping to strengthen your defences for natural protection. We
will continue to develop quality research to understand more of
the benefits of eating ZESPRI Kiwifruit. This supports our key
growth strategy to increase the number of consumers who eat
kiwifruit at least once per week.

South East Asia is another area where we see potential for

considerable and rapid growth. In the past year alone, GREEN
and GOLD volumes have grown by 27 percent and 54 percent
respectively (albeit off a small base). To capitalise on this potential,
we have moved one of our high-performing market managers
who delivered considerable growth in Korea, to the region. His
focus will be on growing the markets in the Philippines, Thailand,
Malaysia, Vietnam, Indonesia and Singapore.
There are also considerable opportunities for sales expansion
through the Middle East and into India, as distribution relationships
continue to strengthen and logistics infrastructure is enhanced.
International Trade Deals
The signing of a free trade agreement between New Zealand,
Australia and the South East Asian nations will support the
competitiveness of our offerings, underpin growth in these markets
and also deliver increases in net returns for growers.
The New Zealand Governments announcement in March
2009, that negotiations towards a free trade agreement with
the Republic of Korea had commenced was very good news
for the New Zealand kiwifruit industry. We believe that such an
agreement could ultimately save New Zealand growers $33.0
million each year in tariff reductions, as Koreas current tariff on
New Zealand kiwifruit is the highest in the world at 45 percent.
In addition, the New Zealand-China free trade agreement,
signed in April 2008 will see tariffs for New Zealand kiwifruit
progressively reduce from 20 percent to zero by 2016.

Total Volume Sold

New Zealand-grown

GREEN
GREEN ORGANIC
GOLD
OTHER

72.7
67.9
62.5

59.1

58.8

49.6
Tray equivalents (m)

14.7
8.6
2.3
2003/04

4.1

2.7
2004/05

3.2

2.7
2005/06

3.0

2.3
2006/07

21.9

19.3

16.7

14.1

2.3

2.8
2007/08

2.4

2.9
2008/09

2.5

ZESPRI ANNUAL REVIEW 2008/09

ZESPRI People

Governance

The year has seen us continue a strong focus on developing our

people. To ensure we are always acting in the best interests of
our growers and stakeholders, we are focused on implementing
a strong performance and results-based culture. Our 250 people
work hard every day to deliver a first class operation on every level.

The 2008/09 year has seen a number of changes at executive

level within ZESPRI, including our own appointments as
Chairman and Chief Executive Officer.

Benefits of a Consolidated Industry

Over the last 10 years fruit and service payments (including loyalty
premium) to New Zealand growers have increased 93 percent from
$413.0 million to $795.5 million representing a compound annual
growth rate of 8 percent annually. Despite the global kiwifruit
category representing less than 0.5 percent of the consumer fruit
bowl, the New Zealand kiwifruit industry represents over 60
percent of New Zealand fresh fruit exports and delivers economic
value to New Zealand of over $1.5 billion. By comparison, while
apples represent over 12 percent of the consumer fruit bowl, New
Zealand apple export earnings from 2000 to 2008 fell 26 percent
from $484.8 million to $359.6 million.

The single biggest driver of this differential performance

is industry structure. We recognise that, as an industry,
we must continue to earn the privilege of our integrated
structure through ongoing delivery of value to growers
and the broader New Zealand economy.
Looking forward, we are positive about our ability to continue to
grow strongly. This growth will come from increased consumer
penetration, strong growth in developing and emerging markets,
new cultivars and growth in new market segments. Importantly,
we have a key challenge in converting sales revenues to grower
incomes through efficient supply chain practices and ongoing
improvements in orchard productivity.
The integrated structure underpins our future growth strategy and
is clearly in the best interests of New Zealand kiwifruit growers, the
kiwifruit category globally and the broader New Zealand economy.

At the 2009 Annual General Meeting, to be held on Wednesday

22 July 2009, Directors Keith Thorpe, Tony de Farias and Graham
Cathie will retire by rotation. Tony de Farias is seeking re-election,
while Graham Cathie and Keith Thorpe have advised they will
stand down following this years AGM. Graham has been a
Director for the past eight years, and Keith for six years. On behalf
of the Board, we would like to thank them for their contribution to
our company.
Outlook
The changing global economy dominated much of the business
news in 2008 and 2009.
Our focus on growing our markets, growing the number of
consumers who regularly enjoy ZESPRI Kiwifruit and growing our
brand has generated positive returns this year for the New Zealand
kiwifruit industry. ZESPRIs strong result in 2008/09 positions the
industry well for the uncertain economic times ahead.
The 2009/10 season will be challenging in the current global
economic environment, but we will continue to focus on the
fundamentals of good business practice, to maximise the returns
for our growers and shareholders. Thank you for your ongoing
support.

John Loughlin
Chairman

Lain Jager
Chief Executive Officer

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| ZESPRI ANNUAL REVIEW 2008/09

THE ZESPRI

Brand Story
ZESPRI is the leading marketer of kiwifruit worldwide, with over 30 percent share of the
market. We remain number one year on year because of our commitment to delivering
top quality, great-tasting fruit to our customers and the strong relationships we have
developed with our growers, supply chain partners and customers.
The ZESPRI Kiwifruit label is a symbol of quality that tells you
that the kiwifruit in your hand is something special with a unique
colour and delicious taste, it is safe to eat and is an extremely
healthy choice.

in various markets want gives us a strong understanding of our

customers needs. Transferring this knowledge to our growers has
meant our products meet these needs, resulting in better returns
for our growers a win-win situation for all.

The ZESPRI Brand means vitality, freshness, energy and health,

and ZESPRI Kiwifruit provide all of these things and more. It is
about a great eating experience, something we are continuing
to enhance through the Taste ZESPRI Programme and backed
by our health science and market research initiatives. We have
made significant investments in these areas in order to differentiate
ourselves from our competitors and direct our marketing strategies.

We are acutely aware of our competitors; the way they work, their
product offerings, their capabilities and their plans for the future.
It is important to keep the ZESPRI Brand strong in order to stand
out from competitors particularly Chile, our only significant
Southern Hemisphere competitor.

We have an unrivalled focus on quality, customer relationships

and innovation. This is underpinned by cost-effective global
sourcing of superior fruit.
Our teams around the world build strong, mutually beneficial
relationships with distributors, wholesalers and retail customers,
and have grown trust in the strength of the ZESPRI Brand. This,
along with our commercial business approach, is key for giving
ZESPRI more power in our markets.
ZESPRI is committed to matching consumer demand with the
offerings from our growers. Our ability to measure what consumers

ZESPRIs premium positioning is based on the year-round, superior

and consistent quality of our fruit, the power of our brand and
our strong promotional campaigns. These have driven consumer
demand and preference for ZESPRI Kiwifruit, giving us a
foundation on which to build and maintain customer relationships.
ZESPRIs ongoing commitment to assessing and adapting our
products to meet changes in the market and our ability to
differentiate ourselves strengthen the ZESPRI Brand. This, along
with our ongoing investment in all areas of our business, strong
partner relationships and constant stimulation of the kiwifruit
category, allows us to retain our leadership position. Above all,
ZESPRIs focus is to satisfy our consumers by offering them the
worlds most delicious and nutritious, and safest kiwifruit.

ZESPRI ANNUAL REVIEW 2008/09

FOCUSING ON

New Cultivars
Finding the next generation of great-tasting,
commercially sustainable kiwifruit that generates
a buzz with consumers around the world, is a
significant focus for ZESPRI.

We make no apologies for the 8 to 10-year detailed process

which sits behind our breeding programme. Through experience,
we have learned that new cultivars must stand up to evaluation at
all stages of the supply chain; from orchard to storage to shipping
to retailers, and through to the consumer.

ZESPRIs strategy is to identify, through rigorous, long-term

research and trial, new kiwifruit cultivars which will encourage
new consumers to buy, and keep buying, ZESPRI Kiwifruit. Our
goal is to increase kiwifruits share of the consumer fruit bowl.

The cultivar which makes it through our breeding programme

will be the very best in every sense. Not only must it withstand
the rigours of picking, packing and transport, it must also help to
increase the overall ZESPRI Brand and kiwifruit category sales
through consumer preference.

Working with Plant & Food Research (formerly HortResearch),

we run the largest kiwifruit breeding programme in the world,
with 50,000 seedlings currently under evaluation and 90,000
expected within the next two years. This world leading
programme is a result of more than $8.0 million invested
annually on innovation, including new cultivar development.
Forty seven new cultivar candidates are currently being
evaluated in small trials around New Zealand. Of these, four
cultivars were tested in key markets to understand consumers
views of how they looked and tasted. They have been fasttracked and planted in pre-commercial block field trials, with
30 hectares in total. We have:
An early GOLD
Two long-life GOLD
A new earlier, sweeter GREEN
The testing programme will continue this year with these four
varieties, including agronomic assessments to understand how
productive the new cultivars will be on orchard and to determine
how the fruit perform through the global supply chain. The
consumer research will continue also with further testing in key
strategic markets.

When we have a winner, as was the case with Hort16A (ZESPRI

GOLD), we will leverage the sales, distribution and marketing
horsepower of the ZESPRI System to ensure successful
commercialisation. The fruit itself must gain a strong sales base
to justify the significant investment we will make, and be sure of
delivering strong returns to ZESPRI growers.
The kiwifruit category represents less than 0.5 percent of global
fruit consumption, and we know that most retailers will only offer
a few kiwifruit facings in store. It is essential that best quality fruit
is available for those facings.
ZESPRIs experience in commercialising new cultivars has been
honed through the success of ZESPRI GOLD. We have seen an
increase in both pricing and sales of ZESPRI GOLD, to the extent
that per hectare returns to growers now outstrip all other kiwifruit
varieties.
ZESPRI does not use any genetic modification to develop
cultivars, only cross-breeding and natural breeding techniques
are used. Natural processes like these lengthen the development
times, but we think that is a small price to pay for naturally
developed, high-quality new cultivars.

|9

| ZESPRI ANNUAL REVIEW 2008/09

ZESPRI Kiwifruit is the biggest

kiwifruit brand in the world and
ZESPRI GREEN Kiwifruit is the
largest category in our portfolio.
It is the foundation of our industry and the volume driver for our
business. ZESPRI GREEN is the global category benchmark,
providing consumers with a vibrant, branded offering that delivers
safe, great-tasting, high quality kiwifruit.
ZESPRI GREEN is one of the most nutrient-dense fruits available.
Two ZESPRI GREEN Kiwifruit contain more vitamin C than an
orange, more potassium than a banana, more fibre than a bowl
of bran, and are high in trace minerals and vitamins.

Underpinning our premium pricing and the ZESPRI

Brand is the consistently high quality of ZESPRI
GREEN Kiwifruit. We are continually looking at how
w can enhance our value proposition, grow the
we
kiwifruit category and further differentiate ourselves
f
from
the competition.

ZESPRI

Kiwifruit
2008/09 Market Performance
2008/09 was a record season for Class 1 ZESPRI GREEN with
in-market sales of 72.7 million trays, an increase of almost 5.0 million
trays on 2007/08. This impressive volume performance was achieved
whilst maintaining ZESPRI GREEN in-market price premiums.
ZESPRI GREEN Kiwifruit
Total Volume Sold

Overall, the entire New Zealand industry worked well together

and helped make it possible for our in-market teams to achieve
record ZESPRI GREEN volumes, sales and market returns.

New Zealand-grown

72.7

Growers and suppliers alike responded well to the strong market

signals for the supply of early, high quality fruit. Delivering early fruit
in 2008/09 was pivotal in securing valuable shelf space at the start
of the season. This enabled ZESPRI to further build on customer
relationships and leverage our significant promotional campaigns.

67.9
62.5

58.8

Tray equivalents (m)

10

09

07

06

08

/
08
20

/
07
20

/
06
20

/
05
20

Europe is the core region for ZESPRI GREEN Kiwifruit, with

more than 44 million trays sold in 2008/09, accounting for
approximately 60 percent of the crop. In Europe, ZESPRI GREEN
has, on average, a two point Brix advantage over competitor
fruit meaning our fruit is noticeably sweeter tasting. Japan
continues to be our premium revenue-generating market. We
achieved significant growth in China as marketing investment was
increased and new distribution opportunities secured. Our strong
performance in North America was driven by the earlier supply of
fruit and our developing retail programmes.
Average Orchard Gate Returns per hectare for growers increased
25 percent to $30,067, up from $24,051 in 2007/08.

ZESPRI ANNUAL REVIEW 2008/09

Key Highlights
2008/09
Orchard Gate Return per hectare
increased 25 percent on 2007/08 to
$30,067 in 2008/09.
Teamwork, collaboration and achieving
an early start were fundamental in the
successful ZESPRI GREEN 2008/09
season. We had a bumper crop of
top quality fruit that was sent to the
markets early. Our in-market teams
sold far more than they did in any
other season, at increased returns.
Average Class 1 gross yield per
hectare from ZESPRI GREEN
orchards increased 6 percent on
2007/08 to 8,175 tray equivalents
per hectare. Initiatives such as the
Focus Orchard Network are helping
to lift the overall quality of the crop.
With commitment from growers and
industry partners, we will continue
to make improvements in the quality,
yield and taste of ZESPRI GREEN.

Priority Issues and Future Focus

Strengthen the ZESPRI Brand
Invest in health science
Continue to develop established and emerging markets
Continue product differentiation
Increase orchard performance to enhance the quality
of the crop and grower returns

Improve our current ZESPRI GREEN Kiwifruit offering

and create new superior GREEN varieties by cultivar
development
In a year such as 2009, it is crucial that we get off to the best
possible start. The industry has stepped up to this challenge,
with the first ever week 14 vessel leaving for Europe loaded
with ZESPRI GREEN.
Although we are getting to market more quickly than we have in
the past, there are a number of factors that will make this one of
the most challenging seasons on record:
The world is in the grip of the worst global recession
in 80 years
A significant overhang of Northern Hemisphere green
kiwifruit is spilling into our selling season
Chilean green volumes are expected to be up 28 percent
to 199,000 tonnes

ZESPRI is well placed for a strong performance in 2009/10.

Our customer relationships, established over many years, are
enabling us to secure forward sales, shelf space and promotional
campaigns. As purchase decisions become more considered in
the current economic climate, the quality of ZESPRI GREEN
Kiwifruit and the assurance our brand provides will set us apart.
We will continue to make significant investments in advertising
and promotion to drive consumer awareness and preference.
In Japan, we are featuring a new ZESPRI GREEN television
commercial, while in Europe we will continue building on the
very effective Green Groove campaign.
Continuing to develop existing markets and establishing new
markets are key strategies for growing our sales volumes. Emerging
markets in China and South East Asia will be critical, in the
context of the increasing GREEN volumes in the coming years,
to drive value and volume growth both now and in the future.
It is increasingly important to continue to differentiate ZESPRI
GREEN from the competition. Several programmes are underway
to achieve this:
The Taste ZESPRI Programme (see page 16)
Developing New Cultivars (see page 9)
Building on the scientific research to support the health
benefits of ZESPRI GREEN Kiwifruit (see page 16)
The success of the New Zealand kiwifruit industry has been built
on ZESPRI GREEN, however, we cant stand still. We will need
to continue to evolve at an even faster pace to ensure we stay
ahead of the competition.

| 11

| ZESPRI ANNUAL REVIEW 2008/09

After only 10 years in the industry,

ZESPRI GOLD Kiwifruit has
rapidly expanded the kiwifruit
category and continues to deliver
strong returns for growers.
It is New Zealands second-largest horticultural export earner
after ZESPRI GREEN an impressive feat for an innovative
cultivar that is relatively young. It is a strong player in the global
fruit market with huge growth potential.
ZESPRI holds the intellectual property and marketing rights for
ZESPRI GOLD, with over 4,000 hectares planted under licence
around the world. Our ability to work with our industry partners
to manage quality through the supply chain is critical, and a key
factor in ZESPRI GOLDs success.

ZESPRI GOLD Kiwifruit enjoyed an exceptionally

good season in 2008/09 with strong sales. Improved
fruit handling and enhanced supply chain processes
reduced fruit loss and contributed to delivering
another outstanding result to growers.

ZESPRI

Kiwifruit

In 2008, the third tranche of new ZESPRI GOLD licences was

tendered to New Zealand growers. The increased plantings
will provide greater volumes to enable us to meet expanding
customer demand.
Our strong customer relationships, the superior taste profile,
longer storage life and strength of the ZESPRI Brand place
ZESPRI GOLD far ahead of any competitive yellow variety.
2008/09 Market Performance
2008/09 saw a 13 percent
p
increase in sales volume of ZESPRI
2007/08 with over 21.9 million trays sold globally.
GOLD over 2007/08,
Europ showed a 17 percent increase in volumes
Europe
sold, with an additional 900,000 trays compared
with the previous season. Germany, The
Neth
Netherlands
and Spain were the main recipients
of ZE
ZESPRI GOLD Kiwifruit in this region.

ZESPRI GOLD Kiwifruit

Total Volume Sold
New Zealand-grown

China (including Hong Kong) showed a 45 percent

incre
increase in sales and, combined with the other key
Asian markets of Japan, South Korea and Taiwan,
recei
received over 14 million trays, an increase of
16 pe
percent.

21.9
.9
19.3
16.7
14.1

Avera
Average Orchard Gate Returns improved
signif
significantly for our growers, to $60,885 per
hecta
hectare in 2008/09 compared with $46,067 in
2007
2007/08 a 32 percent increase.

Tray equivalents (m)

12

ZESP
ZESPRIs strategy is to manage the supply of
GOL
GOLD to meet ever-increasing market demand.
The new
n
GOLD licences granted this year secure
future supply and allow us to grow steadily in all
key regions.
r
09

07

06

08

/
08
20

/
07
20

/
06
20

/
05
20

ZESPRI ANNUAL REVIEW 2008/09

| 13

Key Highlights
2008/09
A much softer fruit than its GREEN
cousin, ZESPRI GOLD is more prone
to damage. In previous years ZESPRI
has experienced up to 13 percent fruit
loss due to damage during packing or
shipping. The significant reduction in
fruit loss (to less than 8 percent) was the
main highlight of the season, a result
of focus throughout the supply chain
from orchard to packhouse to market.
The record volumes and sales in the
Asian markets were another highlight,
with volume increases of 27 percent
in East Asia (including China) and
7 percent in Japan.
The year also saw the successful
tender of the third tranche of ZESPRI
GOLD licences.
Other highlights included:
Introduction of In-Transit Colour
Assessment, a quality control system
which controls the temperature of
the container during shipping to
ensure the fruit is perfectly ripe by
the time it reaches the markets
Market testing of new GOLD cultivars
and fast-tracking of field trials of
potential new varieties to extend the
ZESPRI GOLD window (see page 9)
Extensive market research into
what consumers want from their
ZESPRI Kiwifruit
Advancements in the Taste ZESPRI
Programme (see page 16)

Priority Issues and Future Focus

Understand growth opportunities, market by market,
and develop initiatives to tap into these
Defend our position surpassing the competition

We have a strong understanding of our competitors and have

armed ourselves to maintain our first mover advantage. Our key
strategies to retain our position as the GOLD category leader are:

Extend the window of supply of ZESPRI GOLD Kiwifruit

Continue improving taste

Improve productivity

Invest in new cultivars

Build on our health science platform

We will continue to improve overall productivity, increase yields

of Class 1 ZESPRI GOLD Kiwifruit, and refine post-harvest supply
chain efficiencies to enhance overall quality. ZESPRI will continue
investing in the extension of the GOLD supply window through
our new cultivar research programme and coolstore projects.
Due to robust market and consumer research, ZESPRI has a deep
understanding of consumer preferences. Our aim is to increase
depth and frequency of purchase.

Develop emerging markets

Grow consumer demand
Strengthen both pre and post-harvest supply chain efficiencies
We expect solid sales for ZESPRI GOLD in 2009/10, with strong
growth predicted in South East Asia and China.
Future opportunities for further GOLD licences will be reviewed
on an annual basis.

| ZESPRI ANNUAL REVIEW 2008/09

ZESPRI

Kiwifruit
ZESPRI GREEN and GOLD
ORGANIC Kiwifruit offer
a natural choice to suit
consumers lifestyles, as an
alternative to conventional
kiwifruit. ZESPRI ORGANIC
Kiwifruit was designed for
those who want to enjoy
pure, organically-grown fruit.

ZESPRI ORGANIC is an important extension of the ZESPRI

Kiwifruit product range and accounts for three percent of ZESPRIs
business. Organic fruit is a premium niche with relatively limited
growth potential in developed markets. As such, it is vulnerable to
oversupply. The United Kingdom is the largest organic fruit market
in Europe with organics representing six percent of total fruit sales,
compared to four percent in Germany, one percent in France and
one percent in Italy.
Demand for organic fruit has been growing across the key markets
of Europe, the United States, China, Hong Kong, Taiwan and South
East Asia. However demand has slowed as a result of the global
economic downturn, and declined in Japan. As economies recover,
growth rates for organics are expected to improve. Emerging
markets like China and South East Asia offer viable opportunities,
but the benefits of organics needs to be communicated to
consumers in these markets in order to grow demand.
Grown to the most stringent standards, ZESPRI ORGANIC
Kiwifruit undergo a rigorous organic certification system to meet
market-specific needs. BioGro New Zealand (New Zealands
leading independent and internationally-recognised certification
agency) audits and checks all of our organic fruit. We also
comply with other international certification bodies, including
International Federation of Organic Agriculture Movements
(IFOAM), Japan Agricultural Standard (JAS), Korean Standard
(KOSOFO), New Zealand Food Safety Authority (NZFSA) and
United States Department of Agriculture (USDA).

ZESPRI GREEN ORGANIC Kiwifruit

Total Volume Sold
New Zealand-grown

2.9

2.8

2.7
2.3

Tray equivalents (m)

14

2008/09 Market Performance

A total of 2.9 million trays of ZESPRI GREEN ORGANIC were
sold in the 2008/09 season, along with 317,000 trays of ZESPRI
GOLD ORGANIC.

09

07

06

08

/
08
20

/
07
20

/
06
20

/
05
20

Performance in Europe and North America was particularly

strong. Changes in the economic climate shaped sales in Japan
which put consumers, and therefore pricing, under pressure.
Korea posed a great challenge for ZESPRI ORGANIC during the
season, due to the impact of the revised pest quarantine regime
which limited supply to our customers.

ZESPRI ANNUAL REVIEW 2008/09

| 15

Priority Issues and Future Focus

Build sales in existing markets
Understand emerging markets and work to grow these
Strengthen customer relationships
Educate customers about environmental and health
benefits (the naturally produced/food safety platform)
Develop new cultivars to expand the category
Pilot sustainability initiatives to improve the
natural offering
The economic downturn has slowed market demand for ZESPRI
ORGANIC. We expect the impact in 2009/10 to be harder on our
premium-priced ORGANIC kiwifruit than on our conventional
GREEN and GOLD products.
Our key focus for the coming season will be on supporting and
developing relationships with motivated ZESPRI ORGANIC
customers to build sales in existing markets. Organics is a category
with a high dependence on relatively few large customers. This
poses some risk to the category but also provides opportunities to
closely manage the relationships.

The supply of ZESPRI ORGANIC Kiwifruit is

increasing through orchard conversions and yield
improvements. We expect the category to benefit
from initiatives to increase depth and frequency of
purchase for ZESPRI Kiwifruit in existing markets.
At the same time, we will endeavour to build ZESPRI ORGANIC
in new markets, such as China, South East Asia and the Middle
East. As consumer incomes rise in these regions and the benefits
of organics become more widely accepted, we see a good
opportunity for long-term growth.
Access constraints in some markets, such as Korea, will need
to be addressed in order to maximise our performance. We are
working on initiatives to improve pest management and increase
consumer education.
Our aim is to create broader consumer appeal and build on the
naturally produced/food safety platform for ZESPRI ORGANIC
the key consumer purchase driver for organic foods. Increasing
awareness of the environmental and health benefits of ZESPRI
ORGANIC will also be important. Sustainability initiatives, such
as compostable fruit labels and packaging, are underway to
strengthen our natural offering.
The investment in health science is beneficial for organics it is
a natural fit as it addresses the health benefits of kiwifruit, which
are enhanced by the lack of chemical pesticides or fertilisers.
The ZESPRI New Cultivar Breeding programme could open
additional market opportunities for ZESPRI ORGANIC, with
the development of new cultivars which may be well suited to
organic production.
With a significant number of orchards converting to organics,
yields rising and global demand slowing, we expect to have
increasing price pressure in 2009/10. In the present climate, it
is important to gain category share by supporting promotional
initiatives with existing customers rather than by relying on net
category growth. The strength of our relationships with our key
customers will allow us to remain a strong player in organics.

Key Highlights
2008/09
Average Orchard Gate Returns increased in the
2008/09 season to $39,441 per hectare, compared
with $34,744 the previous season. This was due to
strong in-market pricing and performance.
ZESPRI engaged key customers, mainly from Japan,
with visits to New Zealand to see organic orchard
management in action. Product checks are integral to
these customers, where sales of organics are driven
by product integrity and food safety. Through these
relationships, ZESPRI has also been particularly
successful in securing space in key retail catalogues
in Japan via the Japanese Consumer Cooperative
Union. Mail order accounts for 30 percent of their
business and this is a real success for ZESPRI.
Several European customers also visited our organic
orchards and this led to the recent filming of a
documentary on ZESPRI ORGANIC Kiwifruit with
German television company Galileo. This documentary
will be aired on German television mid-2009 to an
audience of one to two million German viewers.

16

| ZESPRI ANNUAL REVIEW 2008/09

FOCUSING ON

The Health Benefits

of ZESPRI Kiwifruit

ZESPRI has invested heavily in scientific research to investigate the benefits of eating
kiwifruit on health and wellbeing. Having established a strategic partnership with the
Riddet Institute, an amalgam of world-class research providers, we are spearheading
innovative research to validate the health benefits of ZESPRI Kiwifruit.

Research has shown that consumers rate health as an important factor

when purchasing fruit, kiwifruit in particular. ZESPRIs research is
focused on the impact of ZESPRI Kiwifruit on overall wellness and
health, providing natural protection from within messages that
resonate with consumers around the world.
ZESPRI GREEN Kiwifruit
GUIDELINE DAILY AMOUNT (GDA)*
Each 100g serving of ZESPRI GREEN
(about 1 kiwifruit) contains:

Calories Sugar
72
7g

4%

8%

Fat Sat.Fats Salt

0.4g 0.01g 0.212g

Fibre
3.4g

<1%

14%

<1%

<1%

ZESPRI GOLD Kiwifruit

GUIDELINE DAILY AMOUNT (GDA)*
Each 100g serving of ZESPRI GOLD contains:

Calories Sugar
54.9 11.1g

3%

12%

Fat Sat.Fats Salt

0.6g 0.15g 0.0075g

Fibre
1.4

<1%

6%

<1%

<1%

One of the most exciting studies initiated in 2008 was the Kiwi Womens Iron Study.
This involved a group of iron-deficient young women who consumed an iron-enhanced
breakfast cereal either alone or with two ZESPRI GOLD Kiwifruit each morning.
The final results will be published late 2009, but initial findings indicate GOLD Kiwifruit
significantly increased the uptake of iron in these women. This research is important
because iron deficiency is the most common micronutrient disorder in the world
today1 reducing physical productivity and negatively impacting cognitive
development in children.
Other studies underway include investigating the true energy value of kiwifruit and the
impact of eating kiwifruit on immune responses. Our continued investment in health
science will grow the kiwifruit category and help increase ZESPRIs share of the global
fruit bowl.

THE TASTE ZESPRI PROGRAMME

Great-Tasting Kiwifruit
The Taste ZESPRI Programme seeks to continually improve the taste of our fruit
both GREEN and GOLD to provide consumers with the best possible taste
experience. Over the past year, our growers have improved the overall taste of
the crop by increasing the amount of dry matter.

Market research shows repeat purchase of ZESPRI Kiwifruit is

influenced mainly by taste and consistency, rather than by price.
We have invested heavily in understanding how we can positively
influence taste via growing techniques.
To deliver a consistent supply of high taste ZESPRI
Kiwifruit to market, a range of smart on-orchard production
techniques and robust post-harvest technologies are being
explored and validated scientifically. Some examples are:
root pruning; multiple trunk girdling to increase dry matter;
and improving inventory management through optimising
harvest and handling to ensure that great-tasting fruit is
available to markets over an extended period.
We have significant consumer research underway to
determine what constitutes a great kiwifruit eating
experience, how consumers define this and how they
prioritise the sensory attributes. We are also developing
sensory tools to benchmark and evaluate kiwifruit globally
which is becoming increasingly important as we expand our
12-month global supply.
*GUI
GUI
GUIDELI
U DELI
UI
DEL
LN
NE DAILY
LY AMO
AMOUNT
M UNT
NT % of an
NT
n ad
adults
adul
t s gu
ts
guideline daily amount (GDA),
based
d on a daily
il int
i take
k off 2
2000
0 00 calo
000
l ries.
i
www.zespri-europe.com

1: www.fao.org/docrep/x0245e/x0245e01.htm

ZESPRI ANNUAL REVIEW 2008/09

Sustainability
The ZESPRI Way for Life

The kiwifruit industry has grown in harmony with nature

for over 100 years, enabling us to deliver premium-quality,
healthy kiwifruit to consumers around the world. Our
strong heritage in environmental innovation has gained
momentum recently with several key initiatives.

The outcomes from this study allow ZESPRI to take an

objective view of all practices to determine where savings
and improvements can be made. Working with our
growers and supply chain partners, we are developing
a range of initiatives to reduce our carbon footprint.

The Carbon Footprint Study was a highlight in 2008/09.

This comprehensive study, conducted in conjunction with
the New Zealand Ministry of Agriculture, used best practice
methodology to determine the total carbon footprint of
growing, packing and delivering our kiwifruit to consumers.

By understanding our position and engaging with

stakeholders, we can drive actions to make a difference
clearly addressing the increase in consumer concerns
about the impact of their purchases on the environment.

Some initiatives underway include:

On Orchard

Packhouse and Coolstore

Transport

Climate change adaptation

adjusting on-orchard practices
to accommodate the changing
environment. For example, one
grower has converted a natural
gully into two lakes which now
serve as an efficient irrigation
system for his orchard.

Waste utilisation turning

kiwifruit waste into bio-plastics
which can be used for packaging.

Using reefer vessels and

optimising packing allowing
a greater quantity of fruit to be
shipped at one time.

Focus Orchard Network

sharing best practice between
orchards to increase yield, optimise
efficiencies and reduce waste.

Coolstore energy efficiency

working with the post-harvest
sector to initiate energy-efficiency
projects.

Slow-steaming ships reducing

a ships speed by 2km/h to lower
diesel use by 17 percent.
The potential future use of
SkySails harnessing the winds
energy by flying a sail 100300m
off the front of cargo ships,
reducing carbon emissions and
lowering operating costs.

| 17

18

| ZESPRI ANNUAL REVIEW 2008/09

FOCUSING ON

Improved Operational
Performance
The successes of 2008/09 were a direct result
of all parts of our business and wider industry
working effectively towards a common goal. Some
of the operational improvements of which we
are particularly proud are in shipping, technical
operations and our global supply business.
Early ships secured valuable retail space
We achieved an early start to sales in Europe in the
2008/09 Season, loading two ships in week 15
(13 April) one to Zeebrugge in Belgium and the
other to Tarragona in Spain. Early ships were also sent
to North America and Japan. The Japan arrival ensured
our fruit was in stock for the all-important Golden Week
(a festival where fruit is often given as gifts).
Our strong relationships with shipping partners
enabled us to respond to changing market conditions,
altering schedules and load quantities as required.
We loaded more on-deck containers per ship
heading to Europe, and better utilisation of the
total vessel capacity means we required the
equivalent of three fewer ships for the 2008/09
crop volumes good for trading and cost
efficiencies as well as for the environment.
The steep rise in oil prices in 2008/09 led to
some container lines slowing the speed of their
ships to save costs. This extended transit times
and caused delays in our shipping schedules.
In 2009/10, we expect bunker fuel costs to be
approximately 50 percent lower than those
incurred in the 2008/09 season.

ZESPRI ANNUAL REVIEW 2008/09

| 19

Improved quality control to deliver

more great-tasting fruit
ZESPRI made significant advancements in the technical
arena in 2008/09, so we can continue providing our
customers with the best quality, best tasting kiwifruit.
We achieved the following:
Improved the Export Consignment Product Inspection
(ECPI) to create a more robust system with near real
time feedback systems
Developed a Container Conditioning and In-Transit
Colouring Assessment for ZESPRI GOLD which enabled
an earlier start to the season, better fruit colour and a
better quality product arriving at the market
Redesigned the quality/auditing system in Italy and
introduced a new storage regime for ZESPRI GOLD
Implemented the International Tray and phased out
the Single Layer Tray in the Asian markets to improve
freight efficiencies and lower costs
Initiated a number of energy efficiency projects with
the post-harvest sector, partially funded by the Energy
Efficiency and Conservation Authority (EECA); this
included benchmarking allowing each coolstore to
compare itself to its counterparts and make improvements
Initiatives for 2009/10 include:
Review of the Intercheck System performance
assessment of the post-harvest sector
Further implementation of decision support tools for
storage prediction
Enhancing the ZESPRI GREEN container management
programme to ensure fruit arrives on time in a
ready-to-eat state

Growing and selling more fruit

from outside New Zealand
ZESPRIs 12-Month Global Supply strategy was established to
ensure key retailers shelves in our main markets are regularly
stocked with ZESPRI-branded, top quality fruit to support the sale
of New Zealand fruit. To achieve this, we grow fruit in both the
Northern and Southern Hemispheres under the ZESPRI Brand.

In the 2008/09 season, fruit grown outside

New Zealand delivered increasing returns.
Class 1 ZESPRI GOLD Kiwifruit yields across
our key growing regions has improved and the
European supply of ZESPRI GREEN Kiwifruit
increased significantly with over 4 million trays
of Class 1 fruit sourced.

We adapted our organisational structure and resources to meet the

evolving needs of the year-round supply business. Initiatives included:
Global technical support team to establish a consolidated
view of international best practice
Centralised research and development programme to prioritise
offshore issues and allocate project funding accordingly
Robust quality assurance programmes to ensure fruit grown
outside New Zealand consistently meets ZESPRIs quality
standards
For the coming season the global supply base will face challenges
of localised environmental factors. In Italy, the early part of the
growing season has been extremely wet and cold in some regions,
affecting vine health of all kiwifruit varieties. ZESPRI continues to
invest in research and technical support to understand Hort16A
(ZESPRI GOLD) responses to local growing conditions.

20

| ZESPRI ANNUAL REVIEW 2008/09

ZESPRI

Office Directory
New Zealand
ZESPRI Group Limited
ZESPRI International Limited
PO Box 4043
Mount Maunganui South
400 Maunganui Road
Mount Maunganui 3149
New Zealand
Telephone: +64 7 572 7600
Facsimile: +64 7 572 7646
Aragorn Limited
PO Box 4043
Mount Maunganui South
400 Maunganui Road
Mount Maunganui 3149
New Zealand
Telephone: +64 7 572 7600
Facsimile: +64 7 572 7646
ZESPRI Innovation Company Limited
PO Box 4043
Mount Maunganui South
400 Maunganui Road
Mount Maunganui 3149
New Zealand
Telephone: +64 7 572 7600
Facsimile: +64 7 572 7646
Email: innovation@zespri.com
Australia
ZESPRI International (Australia)
Pty Limited
Level 1
21 McLachlan Street
Fortitude Valley
QLD 4006
Australia
Belgium
ZESPRI International (Europe) N.V.
Antwerp Tower
De Keyserlei 5 bus 45
B-2018 Antwerpen
Belgium
Telephone: +32 3 201 0801
Facsimile: +32 3 201 0888
www.zespri-europe.com
ZESPRI Service Centre N.V.
Antwerp Tower
De Keyserlei 5 bus 43
B-2018 Antwerpen
Belgium
Telephone: +32 3 201 0877
Facsimile: +32 3 201 0888
www.zespri-europe.com
China
ZESPRI Management Consulting
(Shanghai) Co. Limited
Suite 1703
No. 1065, Zhao-Jia-Bang Road
Shanghai
PROC 200030
Telephone: +86 21 3368 7528
Facsimile: +86 21 3368 7533
www.zespri.com.cn

France
ZESPRI International France S.A.R.L.
Ccfim Cap Janet Hangar 17
13344 Marseille Cedex 15
France
Telephone: +33 4 91 659 140
Facsimile: +33 4 91 609 144
www.zespri-europe.com

ZESPRI Fresh Produce

North America Inc
1420 5th Avenue, Suite 4100
Seattle
WA 98101-2338
United States of America
Telephone: +1 206 223 7000
Facsimile: +1 206 223 7107

ZESPRI Fresh Produce France S.A.R.L.

42 Rue de Tauzia
33800 Bordeaux
France

Spain
ZESPRI International Iberica SL
Mercamadrid
Zona Comercial Local 14-A
28053 Madrid
Spain
Telephone: +34 91 507 9368
Facsimile: +34 91 507 9259
www.zespri-europe.com

Germany
ZESPRI International Germany GmbH
Postweg 14
DE-46499 Hamminkeln
Germany
Telephone: +49 285 296 0440
Facsimile: +49 285 296 0439
www.zespri-europe.com
Italy
ZESPRI International Italy S.r.l.
Via Cesare Lombroso 54
20137 Milan
Italy
Telephone: +39 02 5410 7492
Facsimile: +39 02 5410 4627
www.zespri-europe.com
ZESPRI Fresh Produce Italy S.r.l.
Via Ercolani 28
40026 Imola (BO)
Italy
Telephone: +39 054 223 523
Facsimile: +39 054 261 2909
Japan
ZESPRI International (Japan) K.K.
3rd Floor, Sanbancho Yayoikan
6-2 Sanbancho
Chiyoda-ku
Tokyo 102-0075
Japan
Telephone: +81 3 3288 9341
Facsimile: +81 3 3288 9353
www.zespri-jp.com
Korea
ZESPRI International (Korea)
Co. Limited
8th Floor, Maru Building
942-20, Daechi-Dong
Gangnam-Gu
Seoul
Korea 135-280
Telephone: +82 2 547 5935
Facsimile: +82 2 547 5938
www.zespri.co.kr
North America
New Zealand Kiwi Holdings Limited
3607 Country Club Drive
Redwood City
CA 94061
United States of America
Telephone: +1 650 368 2870
Facsimile: +1 650 745 1419
www.zesprikiwi.com

Sweden
ZESPRI International Nordic AB
Tallkrogsplan 93
122 60 Enskede
Stockholm
Sweden
Telephone: +46 733 584 343
Facsimile: +46 8 30 82 08
www.zespri-europe.com
Taiwan
ZESPRI International (Asia) Limited
Suite 1701, 17th Floor
International Trade Building
333 Keelung Road
Section 1
Taipei 110
Taiwan
Telephone: +886 2 2757 7266
Facsimile: +886 2 2345 9633
www.zespri.com.tw
United Kingdom
ZESPRI International
(United Kingdom) Limited
Weltech Centre Trust
Ridgeway Unit 29-A
Hertfordshire AL7 2AA
United Kingdom
Telephone: +44 1707 871 536
Facsimile: +44 1707 321 211
www.zespri-europe.com

www.zespri.com
www.zespricanopy.com
contactzespri@zespri.com

Notice of Annual General Meeting

The Annual General Meeting of shareholders of ZESPRI Group
Limited will take place at 1.00pm on Wednesday 22 July 2009
at Baycourt Theatre, Durham Street, Tauranga.
Financial Calendar
Financial year-end:
Annual Report issued:
Deadline for receipt of proxies for
Annual General Meeting:
Annual General Meeting:
Indicative dates for dividend payments:

31 March 2009
23 June 2009
1.00pm, 20 July 2009
22 July 2009
December (interim)
August (final)

www.zespri.com