But a glance over his career path indicates he has never been one to sit around for long and he ruefully acknowledges there will be more than enough to keep him busy again in his new post. He spoke to Richard Rennie.
Peter McBride’s time with Zespri has not lacked its share of roller-coaster moments and he is exiting his fifth year as chairman at something of a peak at the top of the country’s most acclaimed primary produce marketer.
But one ordinary Friday afternoon in November 2010 when McBride was chairman-elect the Psa axe fell across his sector.
As orchard values bottomed out at bare land values and Zespri shares plummeted from $4 to 20 cents McBride and then chief executive Lain Jager knew they were heading into a very long, dark tunnel.
But clear decisive action played a key role in getting to the light at the end of that tunnel.
Only a week after discovery growers were convinced to commit $25 million of their own money to match government input. That was thanks largely to some forceful and pointed input from Jager and McBride who could see an inertia falling across the shocked industry if action was left too long.
The funding commitment sent a signal to the post global financial crisis, budget-conscious government about the industry’s intent to commit to saving itself.
It also meant Jager and McBride could front up to bankers only 12 months later with a viable industry recovery plan.
“Really, the risk was asymmetrical. It was a far greater risk to do nothing than to do what we presented despite it being unproven,” he said.
The main action was re-grafting the Hort 16A fruit with the more tolerant Gold3 variety.
The wholesale culling of the fruit is the single biggest retooling of any primary sector variety or species in New Zealand’s agricultural history and stands as a textbook example of crisis response to a major biosecurity incursion.
Since that point on McBride’s watch orchard-gate returns have doubled, orchard values that bottomed out at $250,000 a hectare are now selling for up to $1.1m a hectare and overseas markets are clamouring for a fruit more popular than the one it replaced.
The next roller-coaster plummet followed shortly afterwards when Zespri staff and distributors in China faced criminal action over false invoicing.
That culminated in a $960,000 fine, five years’ jail for an employee and repayment of $11.6m.
Added to that came a Serious Fraud Office investigation here that after four years could not find sufficient evidence Zespri had attempted tax evasion.
“One thing we learnt was China is not black and white and that Western views of Chinese justice can be jaundiced.”
Zespri’s belief its Chinese partners had acted correctly proved wron, and the marketer moved to assume greater control over the rapidly developing market by becoming the importer of record on mainland China.
A similar event in Taiwan shortly afterwards had all three staff there fired.
“We learnt you cannot compromise on your values. Sometimes you have to be brutal and blunt to send a signal to the market.”
The board also oversaw a global audit of Zespri’s entire customer portfolio, something no other exporter he knows of has done before or since.
With multiple market outlets around the globe it could be easy for an exporter to adapt its company culture to suit the circumstances.
But Zespri has been committed to a one-company, one-culture philosophy built on integrity in supplier-distributer relationships that nevertheless retain some tension between parties.
“We have also always tried to avoid having capital invested in those partnerships – we are a capital light company, a virtual company really whose main assets are its brand and its people.”
McBride is well equipped to make the leap from kiwifruit to milk, having begun his career as a sharemilker with his wife Linda before moving from south Waikato to Te Puke and converting a dairy unit to one of the country’s first Gold kiwifruit orchards.
Several other conversions followed and today he owns a large dairy operation, kiwifruit orchards and is chief executive of Trinity Lands, a large south Waikato dairy and orchard operation.
He appreciates the contrast between the Zespri brand business and the capital-intensive Fonterra operation that has seen millions of shareholders’ dollars burnt in offshore investments in a relatively short time.
While not wanting to delve too deeply into a business he still has to lift the hood on, McBride has less of an issue with Fonterra’s structure than with its strategic objectives.
“That comes back to needing to have a better understanding what their purpose is and why they exist.”
He is concerned Fonterra’s strategy is broader than its core business but welcomes the very recent shift in that with the removal of the two Vs from its strategic formula.
“I think they have tended to take a capital solution to a problem versus stepping back as we would do here and ask ‘how would we do this if we had no capital?’”
If the strategy is working McBride believes the structure is less a priority.
He is concerned at Fonterra’s loss of supplier base because of dissatisfaction with that strategy and the resulting processing plant over-capacity remaining Fonterra shareholders will be shouldering.
“And you do have to question why Fonterra buys into forward distribution and how that affects your relationship with a distributor.”
His personal experience goes back 16 years ago when Zespri had money tied up in United States distributor Oppenheimer, only to disengage financially but keep it as a critical US partner.
“The risk is distributors can think you are a captive audience and that can impair performance.”
While McBride has an open mind about Fonterra’s future direction he acknowledges the co-operative has a task ahead rebuilding farmer trust.
“How you engage with farmers is critically important.
“I know there has been a lot of scepticism around the electoral process but I believe that is ill-founded.
“I think I will challenge everything – I care about NZ farming families who are completely reliant upon decisions made around these board tables. A lot of doing this is a service thing.”
