Lynnell Brandt is involved in the international introduction of new tree fruit varieties.
New apple varieties must be managed on a global basis, says Yakima, Washington, nurseryman Lynnell Brandt, and it takes international cooperation to achieve that.
Many new apple varieties are being developed around the world, as breeders try to improve on existing varieties in an effort to encourage people to eat more apples. Consumers, retailers, marketers, and producers all want better products, Brandt said. However, there’s not enough room on the retail shelf for all of them.
"I think there’s always a need to have something new, something novel, and something different. That drives everyone to some degree, but the markets cannot assimilate too many at one time, even if they have seeds of gold," he said. "Some varieties will succeed. Some will fail, and some will fail that have had a tremendous amount of investment into them, too, which will be disheartening."
Varieties must be introduced with coordination from production to marketing and retailing in order to capture the small amount of shelf space that’s available and keep it for as long as possible, he said.
The larger marketers will want to have products that they can tout as being superior to their competitors, while retailers will want exclusivity on certain apple brands as a way to differentiate themselves from their competitors.
Just how new varieties will be introduced in the future will depend to some extent on the variety, he said. For niche varieties with a narrow market, the model might involve just a few companies and very controlled production. Varieties with greater market potential might be managed by international groups, similar to the International Pink Lady Alliance, but with a more controlled acreage situation, he said. He believes many people nowadays would hesitate to be involved in unmanaged varieties because of the fear of overproduction and not getting a return on their investment.
Managed varieties are often referred to as "club varieties," Brandt noted. "We talk about clubs, but really they’re branded programs. Clubs, to me, are a bunch of old guys who get together and say, ‘Let’s have a beer and do this.’"
A branded program develops strategies for supporting the brand, which requires a sophisticated global infrastructure and involves different aspects of the industry around the world.
"I think this is the way things will have to evolve in order to have a chance for success," he said.
Retailers won’t fund promotion
Though retailers are likely to be involved in the commercialization of new varieties, they won’t be the ones paying to promote the brands, Brandt said. "If they have 10,000 or 20,000 items in the store, there’s no way they could do all those kinds of things, nor do they have the expertise."
However, retailers won’t allow products to languish on the shelves, either. With fewer and larger retailers, it will be a challenge for the variety owners to successfully introduce a new brand, he believes.
"How do you come up with the shelf space and have enough critical mass to keep it there, and have sufficient consumer awareness that there’s enough throughput to make it cost effective for everybody, given that there are ten people in the wings waiting and dying for that shelf space?" he asked.
It takes infrastructure and coordination, Brandt said, and it must be done on a global basis to mitigate the risks. If a brand only existed in the United States, who would stop growers in other parts of the world from growing the variety, shipping it to the United States, and undermining what the variety owners are trying to do?
"All of us need to move towards an understanding of the commercial reality in the world. No longer can we look at things from a regional aspect only, and how do we compete against the world? If we go down those roads, we’re doomed to fail."
Brandt is president and a founding member of the Associated International Group of Nurseries, whose initial focus, 20 years ago, was the introduction of varieties and rootstocks and discussion of horticultural practices. But that has changed, he said.
"We have now matured away from that. From my perspective, nurseries are not necessarily just the only point of entry of the new products. It’s no longer nurserycentric."
Today, the AIGN is a global network of companies—still mainly nurseries— that manages intellectual property and helps develop commercial models and strategies for the global commercialization of varieties. The AIGN, which has members in countries around the world, including China, has developed an international Internet database system called Hertha
to manage the flow of information on intellectual property, including sales, contracts, and horticultural information.
The apple industry must take a more inclusive approach and become involved with others to collectively set goals and visions and have the means to realize them, he said.
"My contention is that it’s far bigger than individual players and far bigger than regional industries. What happens in the corners of the world has almost immediate and direct impact on our ability to move forward and our options.
"I think the way we have to think now is, how do we collectively work together from the production and marketing side to enhance the values and throughputs of products rather than fighting one another? It’s the way it’s going to have to be."
Brandt said the breeders must be adequately compensated for their investment, and if production is limited, a per-tree royalty might not be adequate compensation. A combination of a tree royalty and a production-based royalty might be necessary.
The brand must also be profitable for growers.
"All of this breaks down if the grower does not get an adequate return on investment," he said. "These are all long-term programs, long-term situations, and if the producer doesn’t make adequate returns, it’s all for naught. If people are going to make those kinds of investments, they’re going to want to have sustained business. The producer has to be adequately compensated to keep him in. "There has to be the potential for a better return or longer period of return on investment. That’s the whole concept for these models."