The NZ$38.5 billion (US$26.3 billion) New Zealand Superannuation Fund (NZ Super) has acquired a 27 percent minority stake in Auckland-based global fresh fruit and vegetable grower and marketer, NZ Gourmet. Financial details of the deal were not disclosed.
Founded in 1982 by Paul, Chris, and Tony Martin, NZ Gourmet has operations in New Zealand, the U.S., Australia, Mexico, Peru, and Ecuador, where the company grows blueberries, asparagus, tomatoes, strawberries, cherries, and peppers, among other produce. The company’s U.S. subsidiary, Gourmet Trading Company, focuses on fresh asparagus and blueberries and has farms located across South America and the U.S. Together, NZ Gourmet and Gourmet Trading Company supply fresh foods to customers across North America, Asia, and Australia in partnership with Tuaropaki Trust and The Hauhungaroa Partnership.
Launched in 2003, the NZ Super Fund currently has NZ$38.5 billion under management and has posted returns of 10 percent per year since its inception. The fund has investments exceeding $5 billion in New Zealand, including significant stakes in Kaingaroa Timberlands and a portfolio of rural assets.
The decision by NZ Super to back NZ Gourmet was driven in part by consumer shifts in demand, according to the fund’s CEO.
“Our decision to invest in NZ Gourmet, and our confidence in its long-term prospects, is backed by growing global demand for fresh fruit and vegetables and an increasing focus by consumers on health and wellness,” said Mark Fennell, acting CEO, NZ Super Fund.
NZ Gourmet plans to use the fresh capital gained through the deal to fund growth for the company both on a domestic and global scale, according to company CEO Paul Martin, who will remain in his position after the closing of the deal.
“NZ Gourmet approached the NZ Super Fund because we were interested in partnering with a New Zealand investor with a long-term outlook,” said Martin. “This is a positive step forward for NZ Gourmet’s future and we look forward to a long and successful partnership with the NZ Super Fund.”
This deal to buy into NZ Gourmet comes less than a year after NZ Super made its first ever offshore farm investment in October 2017, when it invested an undisclosed amount in Palgrove, an Australian beef stud operation.
Launched more than 40 years ago by Peter Bondfield, an early importer of the Charolais breed of cattle into Australia, Palgrove had been taken over by David and Prue Bondfield, who have seen the company grow from an original herd of 50 cows to more than 2,500 registered females, with operations in New South Wales and Queensland.
Palgrove also has pioneered the development of the Ultrablack breed which has gained notoriety amongst commercial buyers across the country.
At the time, the addition of Palgrove to the NZSF portfolio raised its combined allocation to farmland to NZ$340 million (US$242 million), or approximately 1 percent of its total funds. In the long-term, the fund is targeting an allocation of 3 percent to farmland and land-related investments – a goal that the NZ gourmet deal will help the fund meet.
-Lynda Kiernan