Craigmore Sustainables is a New Zealand rural investment company in horticulture, forestry and farming and it forecasts its horticulture business to grow from $400 million total assets to $650-$700m over the next 18 months.
The growth will be in further planting of existing properties in kiwifruit, apples and grapes, along with new signed land purchases, not yet announced.
Chair Forbes Elworthy said Craigmore favours industries in which New Zealand has competitive advantages and strong markets.
The Craigmore 2023 Impact and Sustainability Report, published last November, reported over $1 billion in total assets across horticulture, dairying and forestry, totalling 60 properties and 229 direct employees.
Thirty-seven per cent of the capital is already invested in horticulture, with more to come. Most of the horticulture investments involve capital-intensive conversion of bare land to modern orchards on new structures and IP protected varieties.
It requires a long-term mindset, access to the right varieties, good development design and execution. Craigmore has a unique structure compared to other offshore land owners in New Zealand – while it has access to offshore capital, it maintains New Zealand control over management and governance
Craigmore’s structure is built on managing its investments, often via limited partnerships funded by capital it has raised from long-term private investors, mostly European.
Craigmore makes all material (and non-material) decisions regarding acquisition, divestment, management and director appointments. Investors have to be patient and passive.
The capital is placed in funds like the Craigmore Permanent Crop Partnership, which owns orchards and contracts in management services from Craigmore and others to run the assets and operations. Expansion is happening rapidly across 15 sites in Northland, Bay of Plenty, Gisborne and Hawke’s Bay, Nelson and Marlborough, horticulture general manager Con Williams said.
In the 2023 report, Craigmore tallied the planting in one year of 860,000 apple trees, 140,000 kiwifruit vines and 491,000 grapevines on what was previously pastoral land.
In FY 2024, Craigmore had 2160ha of orchards, including leased land, and total assets of $376m, including seven main kiwifruit orchards, six large apple orchards, over 350ha in grapes in three regions, a minority share in 350ha of hops, and a small Far North avocado orchard.
Williams said some of the older orchards have now been operating four or five years and are approaching full production and higher asset values.
Craigmore does not invest further along the value chain, in either packing or branding, but has management relationships with the like of Seeka, Trevelyans, EHC, Kiwicrunch, Indevin and Clayton Hops.
“We stick to the orchard development and management and leave others to do what they do best,” Williams said.
Kiwifruit, apples and grapes are the three major crops where Craigmore’s foreign investors satisfy the Overseas Investment Office requirements such as employment growth in disadvantaged communities, investment that might not otherwise have occurred, boosting export revenue and sustainable development.
Craigmore orchards are mainly in the core growing districts for the specific crops – kiwifruit in Kerikeri and Te Puke, apples in Gisborne and Hawke’s Bay, and grapes in Hawke’s Bay and the Wairau Valley, Marlborough.
“That is partly for climatic reasons and soils, and partly for the existing industry infrastructure, service providers and access to skilled people,” he said.
Around 25% of the kiwifruit orchards are managed and certified organic, matching investor preferences with the higher fruit prices.
Craigmore grows 20% of New Zealand’s organic gold kiwifruit, for the higher orchard gate returns that are available and its sustainability credentials.
Significant recent gold kiwifruit development is almost complete at Wiroa, near Bay of Islands Airport, with vertical shelter and drip irrigation from the Kerikeri scheme.
Nearby are the smaller Kiwinorth established orchards bought from Seeka and still managed by that packhouse.
Northland sites total 200ha while five Bay of Plenty sites total 120ha, with a plan to even the regional split up over time, Williams said.
The Gisborne sites include cropping leases formerly part of Coxco and Cedenco, and the Sunpark and Glenpark apple orchards, being planted with Envy and Rockit, plus other varieties.
Further south, in Central Hawke’s Bay, Craigmore has its largest single location, the 480ha Springhill development at Ongaonga, now established with 180 canopy hectares (cha) of apples and this year 170cha of grapes. Envy, Rockit and Dazzle are the main apple varieties, although Craigmore guards against being over-reliant on one variety.
An adjacent 17cha is developed in grapes, mainly sauvignon blanc with some pinot gris.
Also in Hawke’s Bay is the CFP apple orchards of 112ha in a range of varieties that is leased to Mr Apple, the Scales Corporation division.
Williams said the life cycle of apple varieties has quickened along with the introductions of new structures and planting densities to get the most out of every hectare.
The modern structure Craigmore has selected is 1950 twin-stem trees per hectare on trellis structures to produce a wall of fruit that might be mechanically harvested or pruned in the future.
“The apple industry is very innovative, and I think the key is to pick a structure and orchard design and do it well.”
Craigmore is a 24% owner in the Clayton Hops businesses at Battery Hill and Blue Rock, Tapawera, Nelson Province, consisting of growing, processing, pelletising and selling hops.
Williams said this is effectively the only stake Craigmore has beyond the orchard gate directly in processing. The business is managed by the Claytons who are the majority owners.
Over in Marlborough, the newly acquired Cat Creek properties total 418ha and are being planted in sauvignon blanc, to be managed by Babich Wines, with processing at Riverlands.
It will be planted at a rate of 90-100ha annually at 2222 vines/ha over two years as water builds up in the storage dam totalling 180,000 cubic metres over a 5ha area.
The Craigmore horticulture business has between 80 and 85 full-time-equivalent employees, including those in the development and business teams along with orchard managers and their staff members. The seasonal workforce requirements are rapidly expanding as canopies mature and the crop loads to harvest increases.
“As a New Zealand-owned investment manager, Craigmore is on a mission to use long-term capital to grow our sustainable horticulture, farming and forestry sectors,” Williams said.
