Once hailed as one of New Zealand’s most successful natural health companies, Comvita is now navigating a turbulent market, internal challenges, and a major ownership change. David Porter analyses the challenges.
Comvita honey in production. Photo: Supplied
It came as a surprise to many observers to see the recent profit slump of Comvita, long considered one of New Zealand’s best-performing companies.
The Te Puke-headquartered honey producer and marketer had built up an enviable reputation since its founding in 1974.
“The dilemma the company has had in recent times is the result of a perfect storm of industry-related issues,” one well-connected industry observer told The News.
Karl Gradon
Newly appointed chief executive officer Karl Gradon says a key element in Comvita’s planned resurgence is the strength of its brand.
“Our brand remains very strong,” he says.
“We have to look at how we buy from acreages throughout New Zealand for our consumers. That’s where there’s an opportunity to realign – we have the building blocks in place. But haven’t always aligned them as well as we could have.
“The second thing is just making sure that what we execute on, we do extremely well. Execution on the basics is a very core principle of a consumer-centric business. That’s the key.”
In response to the market slump, Comvita reached an agreement to sell the company to New Zealand firm Florenz, a subsidiary of Christchurch-based investment company Masthead Ltd. Florenz is part of a group of privately owned natural health and wellness businesses.
Under the scheme implementation agreement (SIA), Florenz will acquire all Comvita shares at 80 cents per share – representing an equity value of $56 million and an enterprise value of $119 million.
The SIA has unanimous backing from Comvita’s board and two of its largest shareholders, China Resources Enterprise and Li Wang, who together hold 18.3 per cent of shares.
Shareholder approval will be sought at a special meeting expected in November, with the scheme likely to be implemented in December – pending approval.
Comvita’s latest audited results for the year ended 30 June 2025 described another difficult year, citing “significant financial pressure and persistent headwinds across both external markets and internal operations.”
They have been key issues for the company. A key problem for the industry in general has been a massive recent over-supply and low prices worldwide for honey.
Honey production.
The company reported revenue of $192.4 million (down 4.1%) and gross profit of $82.7 million (down 24%). However, it also noted $12.6 million in cost reductions, with further actions underway.
A major issue facing the industry has been global oversupply and falling honey prices. Sources say consumer demand for premium crops has dropped, while growers held onto stock hoping for better prices – only to release it later, flooding the market.
Comvita chair Bridget Coates acknowledged the challenges in a report to the Stock Exchange saying Comvita’s FY25 performance reflects the full weight of prolonged market disruption – particularly in China – compounded by internal challenges and limited financial headroom.
“The company continues to navigate sustained structural pressure in the Mānuka honey sector, with prolonged oversupply, pricing volatility, and softer consumer demand weighing heavily on margins. These external pressures have been compounded by internal complexity, underperforming investments, and the cost of delivering a significant turnaround.
“We weren’t fast enough to adjust – and those same market dynamics have only intensified, she advised the Stock Exchange. We recognise the impact this has had on our shareholders and the importance of delivering a clear path forward.”
Gradon brings experience from his time as CEO of Miraka, the Taupō-based, low-carbon, Māori-owned dairy company, where he led a successful transformation. He has also held senior roles with Fonterra and Kerry Ingredients, and later returned to New Zealand as CEO of New Zealand Manuka Group, leading its expansion into North America – including a launch into Costco.
Gradon told The News the market is working through “a number of blockages,” and while sentiment is improving, recovery may take longer than expected.
“We are seeing [the market changes] move through the value chain.”
The key element when trying to succeed in any market was to try and sell more.
“You just need to move the stock through and maximise [the return] in the quality chain,” he says.
“We should win eventually. My key is making sure we stay focused on consumers in the value chain.”
“We go into these things with our eyes wide open,” Gradon says when asked about the challenges ahead.
Honey production.
