From panacea to pandemonium?
Planting new varieties is risky.
New Zealand fruit grower and shipper Paul Paynter predicts that the big trend in the next 15 years will be deglobalization.
Will a plethora of new apple varieties lead to pandemonium?
New Zealand fruit grower and packer Paul Paynter posed the question during the International Fruit Tree Association's annual convention in Germany.
Paynter said his own business, Yummy Fruit Company at Hawkes Bay, has replanted about 20 percent of its 500 hectares (1,200 acres) of orchard over the past five years. Most of the varieties in the new blocks are numbered selections from the variety development company Prevar. It will be many years until he knows if the plantings are successful.
New varieties can be a fast way to go broke, he warned, because of the high risk. In New Zealand, it costs the equivalent of U.S.$20,000 to buy an acre of land and plant it to orchard, he said.
Risk is high during the establishment phase, and falls as the planting matures, but it increases again as the planting becomes older and reaches obsolescence. Paynter predicts that most new varieties will have a shorter profitable lifespan than some of the older varieties, because the barrage of new varieties coming on the market will reduce their economic value.
Historically, growers have based their planting decisions on "farm gate" factors, he said, such as which variety their neighbor is planting, which variety is currently making money, how well the variety yields, and what the nursery thinks of it.
Nowadays, though, growers need to have a strategic vision and consider what the world and the markets will be like in 15 years' time.
Cheap and plentiful energy drove globalization, and Paynter predicts that the big trend in the next 15 years will be deglobalization. Because of more restricted and expensive energy and freight costs, producers will focus on supplying local and regional markets. Consumers believe local foods are more sustainable, safer, fresher, and better tasting.
Out of the current crop of new varieties, he believes there will be no global winners, possibly with the exception of Pink Lady. Rather, varieties will succeed on a regional basis. "The future is niche marketing," he said.
Paynter said the marketing of new varieties has gone through an evolution. Back in the 1970s, when most apples were commodity varieties, retailers were indifferent about new varieties. During the 1980s, they began to take interest, and a decade later they were excited about them. The world was hungry for something new.
For producers, new varieties were a panacea. They are the only reason the New Zealand apple industry survived, he said. In the 1990s, New Zealand growers were making a modest fortune on Gala and Braeburn, and 1991 and 1992 were their best years ever.
The current decade has been less successful for New Zealand growers, because they made mistakes and planted the wrong varieties, he said. Pacific Rose, which is New Zealand's biggest variety on the domestic market, was a disaster internationally. It was produced by 1,000 growers, each with an acre or so, and fruit quality was variable as a result.
However, the New Zealand apple industry still thinks that new varieties are absolutely essential, because they need to offer a premium product, given the high cost of land and labor, and the country's distance from markets.
At its peak
But Paynter foresees potential pandemonium in the future. The proliferation of varieties and excitement about them is probably at its peak, he said. By 2010, the market could be saturated, and by 2020 oversupplied.
"There are a lot of varieties battling for space and the consumer hasn't heard of most of them. They're going to struggle to sell. It's a real challenge in the future about how you manage the situation, but I think you can do it. You have to pick your horses, because some of them are not going to be winners."
Supermarkets are not driving the planting decisions, he said. "People are planting what they believe in, and the supermarkets are not really on board."
In the future, he thinks that supermarkets will handle a couple of commodity varieties and five or six newer varieties in each market. When other varieties come along, they'll say that their existing varieties are selling well, they don't need more varieties, and they don't have the space.
"How do you knock them off the shelf and get your variety on?" he asked. "Getting retailers on board somehow and excited about your vision is pretty important. It's one area that's really been underdeveloped."
Future successes will not be based on the intrinsic attributes of the variety so much as on how they are managed, he believes. To the consumer, many of them look almost identical.
"There are some good apples and some very good apples, and there might be one or two exceptional apples, but you're going to have to work much harder for success and have a good marketing strategy," he said.
There's not enough certainty when a grower puts a variety in the ground that the retailer's going to want to stock it, he warned. "The IP (intellectual property) manager's touting the past panacea and you might be buying future pandemonium."