Exclusive: Zespri launches $2M fund to kick-start kiwi innovation
Zespri, a New Zealand-based kiwi fruit marketer, is launching a $2 million fund to invest in various parts of the fruit's supply chain, Jiunn Shih, Zespri's chief marketing, innovation and sustainability officer, tells Axios exclusively.
Why it matters: The goal of the fund is to help farmers with sustainable growing practices and to leverage technology so that they can keep more money in their pockets.
What they're saying: "We rely on the farmers to grow our food, and yet most of the farmers in the world live below the poverty line," Shih says.
- "We have developed a model that we believe is a zag to that."
Details: The annual innovation fund, named ZAG, will invest in entrepreneurs, startups, social impact enterprises, universities, research groups, and NGOs that are tackling areas around sustainable agriculture, technology, automation, packaging, and parts of the supply chain.
- The company, whose shareholders comprise of current or former kiwi fruit growers, won't take equity in the companies.
- "We've had good experiences in partnering with companies and solutions that's good for our industry without necessarily needing to invest in equity," Shih says.
- The funds aim to scale solutions that have a proof of concept or touch on its priorities, such as promoting wellbeing, the environment and communities.
- "We have our own R&D team. We have our own science team. We have very experienced commercial growers that partner with us to trial and test and give feedback," he adds.
Between the lines: The $2 million is the company's initial commitment, which comes from a percentage of its sales margin that is set aside for innovation.
- Zespri plans to replenish the fund over the next few years, Shih says.
- The company doesn't have a minimum or maximum disbursement limit and it will be completely project dependent.
- Zespri aims to have around 50 proof of concepts or pilots that it can "test and learn from" in the first year, Shih says.
How it works: Zespri will establish a steering committee that will be helmed by Shih.
- The company will have external advisory groups as well that will help it identify investment opportunities.
The big picture: Corporate-funded accelerators have gained in popularity in recent years as big companies vie to access a pool of young talent and emerging innovations.
Reality check: Corporate accelerators have drawn critics, with some calling it the equivalent of "innovation theater," due to low startup success rates, small checks, and little risk by the sponsoring company.
Yes, but: "Collaboration is the essence of why our industry works today," Shih says.
- For Zespri, it doesn't own orchards, post-harvest facilities, or warehouse distribution.
- "A lot of the successes we've had is through collaboration and partnering, without necessarily owning equity in those businesses," Shih says.
1 fun fact: Shih grew up in Brazil where fruit was a staple, but he didn't like kiwi. "It was so sour," he says.
- But once he found the right varieties: "It's just such a delicious fruit."