Dec 3, 2010

Managed releases divide apple industry

Apple breeding programs have released some promising varieties in the last few years, with more on the way. Where all these new apples will fit in the marketplace is ultimately up to consumers, but much will depend on how they’re marketed and sold.

In order to gain an advantage in the marketplace, many new releases are taking the club, or managed, approach – where an exclusive group of growers has access to the variety, and no one else. Proponents of this approach say it protects the apple’s image by controlling the quality and quantity of the finished product; detractors say it leaves many growers, especially smaller growers, out of the loop.

“There’s a lot to be said for managing how new varieties are released and marketed, but it can get extreme – to the point where small growers find it more difficult to get involved,” said Kate Evans, an apple breeder and the head of Washington State University’s (WSU) breeding program.

Some of the most successful varieties of the past 20 years have been club varieties, Evans said, but it appears that growers who feel excluded from that approach are starting to rebel.

Case in point: The SweeTango lawsuit in Minnesota.

Sixteen apple growers are suing the University of Minnesota and Pepin Heights Orchard over access to SweeTango, a much-hyped club variety recently released by the university’s breeding program.

According to the lawsuit, the university granted Pepin Heights an “exclusive license to grow, have others grow on its behalf, and sell SweeTango.”

In turn, Pepin Heights granted access to the new apple to dozens of growers in several states and Canadian provinces. In SweeTango’s home state, however, most growers have only limited access to what might be an extremely lucrative new variety – even though that variety was developed by a publicly funded institution that must, first and foremost, work for the benefit of Minnesota residents. The plaintiffs, most of them based in Minnesota, want equal access to SweeTango and want to void the exclusive agreement between the university and Pepin Heights, according to the lawsuit.

There are those in the apple industry who agree, in principle, with the plaintiffs – and those who don’t. Some, like Evans, see it both ways.

“When everybody tries to grow a variety, even in areas where maybe they shouldn’t, it can ruin the variety’s image for everyone,” said Jim Allen, president of the New York Apple Association.

But Allen also said limiting distribution can have its disadvantages.

Clubs can maintain the quality of an apple and improve the way it’s marketed – and it’s hard to argue against that – but the club approach has been divisive. Managed varieties are usually only available to the few growers who have the resources and land to experiment with them, said Denise Donohue, executive director of the Michigan Apple Committee (MAC).

In the opinion of Jim McFerson, manager of the Washington Tree Fruit Research Commission (which funds apple breeding research at WSU), every grower who has contributed financially to a breeding program, through assessments or other means, should have access to whatever comes out of that program.

David Bedford, an apple breeder at the University of Minnesota, supports the university’s managed marketing plan for SweeTango. As a member of the team that first made the cross between Honeycrisp and Zestar that resulted in SweeTango, he was named a defendant in the Minnesota lawsuit.

In the past, new apple varieties were just thrown onto the market by breeders or nurseries in the hopes they would somehow stick. Growers would plant the trees without knowing if they would ever pay off. Once in a great while – with Gala or Fuji, for example – that approach worked, but most of the time it didn’t.

Or another problem: Growers get excited about the latest hot variety and they all plant lots of trees. Next thing you know, the variety saturates the market, the price goes down and quality starts to suffer. Growers start losing money and stop planting. It’s a boom or bust mentality, Bedford said.

The managed approach, which originated in Europe, evens out those extremes. Supply and demand is kept in balance. Participating growers have a little more assurance. It isn’t guaranteed to work, but at least there’s a plan, he said.
As for growers who aren’t part of the club, Bedford thinks there will be enough managed varieties out there for everybody.

Future releases

So, are club varieties the wave of the future? Will growers have to scramble after each new release, with the losers left out in the cold?

Not necessarily.

Growers are trying to find their own niche with club varieties, but there will always be room for open releases, said Todd Fryhover, president of the Washington Apple Commission.

Bedford pointed out that SweeTango has been the only managed release from the University of Minnesota, so far. Since then, the university has released two apples accessible to all growers: SnowSweet and Frostbite.
There’s no set policy for future releases, he said. The university will decide on a case-by-case basis.

Unfortunately, universal releases from public institutions are getting less and less likely, said Donohue, MAC’s director. Land-grant universities (and their apple breeding programs) are battling shrinking budgets and struggling to find new revenue streams. More than ever, they’re capitalizing on patents, trademarks and intellectual property. If a university owns the rights to a hot new apple, it’s going to be very protective of how that apple is released, she said.

Apple releases of the future could fall somewhere between the club approach and the open approach. Recent releases from WSU and Cornell University’s breeding program, for example, are accessible only to growers in those states.
But Cornell will continue to release non-exclusive apple varieties, said Susan Brown, the university’s chief apple breeder.

There’s another possibility, one mentioned by Bedford: Supermarkets, in the hopes of selling exclusive apple varieties, could start clubs of their own. According to Donohue, however, a day might come when there are too many club varieties in the produce aisle. They’ll fight for space with traditional favorites, and not all of them will survive.

— Matt Milkovich