Bryan Parkes, Head of Innovation Acceleration at Zespri
You may recognise the name as the world’s largest marketer of kiwifruit. Selling in over 50 countries, Zespri is a co-op that is owned by kiwifruit growers in New Zealand with a global team of 850 based throughout Asia, Europe, and the Americas.
In November, Zespri announced the launch of ZAG, the Zespri Innovation Fund, a US$2 million annual fund dedicated to accelerating sustainable innovation to positively impact the organisation’s environment, end-users, partners, growers and their communities.
“We are looking for startups, entrepreneurs, social impact enterprises, universities, research groups and NGOs in sustainable agriculture, technology, automation, compostable packaging, supply chain, logistics, and education — essentially, innovative problem solvers who can help address some of the key challenges the industry faces as it meets growing demand for Zespri kiwifruit,” explains Bryan Parkes, Head of Innovation Acceleration at Zespri, in an email interview with e27.
“ZAG is a call out to the innovators and the changemakers to pilot their promising technologies within our industry. As the world’s largest kiwifruit marketer, Zespri can scale these innovations and solutions in the more than 50 markets we operate in globally.”
The funding amount will depend on the needs of each project; ZAG does not have a minimum or maximum disbursement limit. “Our ambition is not limited by the number of projects nor size. This is a US$2 million annual fund, which will allow us to continually work with like-minded partners that have ground-breaking ideas,” Parkes says.
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In this interview, Parkes explains about the company’s investment strategy and their major plans for 2024. The following is an edited excerpt of the conversation:
What leads Zespri to start investing in tech startups? What is your investment strategy?
Since its inception more than two decades ago, Zespri has managed innovation on behalf of the industry to address the challenges confronting the New Zealand kiwifruit industry. Zespri’s focus extends beyond the individual components of the kiwifruit industry to encompass the entire ecosystem and the broader agricultural sector. Recognising that our ambitions are higher than our resources, we invite others — such as startups — to partner with us to help solve challenges impacting the industry as it meets a growing demand for Zespri Kiwifruit.
We recognise the importance of the region as an innovative hub and believe that through ZAG, we can tap into the talent and solutions incubated in this region and apply them to our kiwifruit industry.
ZAG is Zespri’s initiative to fuel innovation relating to kiwifruit. It is not a venture or investment-based vehicle. Zespri does not believe that equity is the only path to scaling solutions.
Our model for ZAG is to partner with innovators and to collaboratively pilot their concepts to accelerate and scale solutions through technology. Zespri has opted out of the equity route multiple times and has been proven to work in piloting and scaling solutions for our industry.
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What is the most notable trend in agritech today? How do you plan to tap into this opportunity?
Agritech is booming, especially with the urgent need to meet the growing demand for food. New technologies have been introduced to help producers thrive, and there will be more developments in agritech as we head into 2024. Artificial Intelligence (AI) models, cloud computing, earth observation, and remote sensing are some of the trends in agritech investments that have grown in popularity in 2023.
We have realised that there are solutions outside of the industry that could be applied to kiwifruit. Therefore, with ZAG, we plan to tap into these emerging technologies to tackle some of the industry’s biggest sustainability challenges such as automation, big-data value extraction, soil regeneration, supply chain optimisation, and packaging, just to name a few.
One of ZAG’s key focus areas is increasing production and supply chain efficiency as we enhance the environment with our production practices. By optimising supply chain management and logistics, and leveraging new technologies such as blockchain, AI, and more, ZAG aims to foster a kiwifruit industry with a positive impact on the environment while providing healthy fruit to our consumers around the world.
Another crucial aspect is the development of packaging solutions with reduced carbon emissions. ZAG seeks to drive innovation in packaging materials, working towards our goal of 100 per cent recyclable, reusable, or compostable packaging by 2025. This aligns with our broader sustainability objectives, addressing concerns related to packaging waste and environmental impact.
In essence, ZAG is a strategic investment aimed at fostering innovations that directly contribute to reducing Zespri’s environmental footprint.
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What are agritech companies’ biggest challenges today, especially in building a profitable business?
One of the biggest challenges agritech startups and companies face today is a global decline in funding. Due to the vulnerability of the agriculture systems to climate change, investors are becoming more hesitant to inject capital. There is now a more specific focus on specific agritech sectors, especially regarding solutions for farmers and mitigating climate change.
Speaking to investors, like VCs, many of them are excited about the potential of engaging with ZAG. Zespri’s end-to-end value chain creates a unique ecosystem where investors can directly engage with growers and solution providers such as startups. This way, they would be able to engage with an entire industry rather than just a part of an industry. Investors would also understand the downstream application of the technologies they’ve invested in, which will strengthen the confidence of startups.
ZAG’s model, as a non-equity-seeking partnership, will be able to help solution providers to scale their solutions across Zespri’s value chain while simultaneously receiving financial support, without the usual restrictions of a venture capital fund.
As we move forward, it will be fascinating to witness how these trends evolve and how the agritech landscape adapts to the changing investment climate.
What is your major plan for 2024?
Zespri will continue to invest in our communities and countries where we operate. Asia is an important region for Zespri and our customers and supply chain partners. In 2024 we are focused on developing close relationships with the parties that engage with ZAG, understanding their capabilities and what we can do together to create mutual benefits.
We recognise the region’s importance as an innovative hub and believe that through ZAG, we can tap into the talent and solutions being incubated here to apply them to our kiwifruit industry.
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The main ambition for ZAG in this first year is to have at least one project scaled up and proven to have delivered benefits for our focus areas: kiwifruit, people, planet, and our communities. This aligns with Zespri’s purpose to help people, communities, and the environment, thrive through the goodness of kiwifruit.
At Zespri, the Māori belief of Kaitiakitanga is part of our DNA. Kaitiakitanga is a Māori term used for the concept of guardianship, for the sky, the sea, and the land. Our ESG efforts, especially with the innovations that ZAG will support, are looking to overcome bigger problems for the environment and its people.
The idea that we can use the fund to reach out and engage with a broader set of people with amazing skills who want to work with us is one of the philosophies of the fund. We have done some amazing things in the past through our innovation investments with start-ups, but ZAG is an opportunity to take us a big step forward.
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Image Credit: Zespri
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