Oct 30, 2014

Stemilt gets license to latest Minnesota variety

Minnesota apple growers will have access to a new cultivar released by the University of Minnesota (UM), but a license agreement with Stemilt Growers of Wenatchee, Washington, will be at the forefront of the continuing development and marketing of the apple.

UM recently awarded Stemilt Growers the license to grow, pack and market a new, early-to-ripen apple cultivar that was developed by the university’s breeding program. The patent name for the cultivar is MN55, and UM plans to trademark a name for the fruit in conjunction with Stemilt in the near future.

“The idea behind our release, as a managed variety – some people say club variety, but I’m never comfortable with that – is to look at it as a product or technology we’ve developed and have it be managed by professionals who do it right,” said David Bedford, research scientist for UM’s apple-breeding program.

“In this case, as is what we’ve done with other releases in other countries, is (to) have a request for proposal sent out to the biggest, best and brightest of variety growers, apple growers and marketers,” Bedford said. “At this point, we are mostly looking for a marketing presence. The apple has to be grown, too.

“So we’re looking for grower and marketer organizations who are among the best in the country,” Bedford said. “Then, as we get those back, our commercialization office looks through it and decides who can do what they say they can do. It’s eventually narrowed down to the best candidate.”

There was not a formal bidding process for the license designation, said Bedford, who noted there were “15 or 20” entities that received invitations to submit proposals.

“We always keep ownership of the variety; there’s been some misunderstanding about that,” he said. “Really, it’s always our variety, and we licensed the use of it to this management group. In the case of Stemilt, they have a good history of growing and selling fruit. That’s part of what we’re looking for – not just for them to crank out the volume. An important part of a managed variety is to manage the quality, also.”

He said this type of managed approach is better for the product brand than a “free release,” such as that experienced by the Honeycrisp when it entered the market.

“What we’ve had with free-released (cultivars), such as Honeycrisp, is everybody grows it and there’s really no accountability,” Bedford said. “It can be grown in different parts of the country and can be picked too early. With every other commercial product, there’s quality standards. In a free release, it’s just sent into the marketplace. No other product in the marketplace gets treated that way.

“That’s what we forget in apple: Varieties have to be treated like brands. When we have a manager in Stemilt, they have to adhere to certain standards or they won’t be able to use (the license).”

While Stemilt is not technically required to pay a licensing fee, Bedford said “some money is required – more like earnest money than it is buying the rights. You don’t buy the rights. The process is not about money but who’s qualified and has a vision. It’s about companies that can not only crank out volume, but who can protect the brand and deliver a quality product. There is some exchange of money, but it really involves that as the fruit is produced, that’s where income starts coming back to the university – some royalties.

“That’s another part of the whole equation,” he said. “We’re not in position to be out marketing varieties. A variety like Honeycrisp flounders and floats out in the market. Who’s going to put a lot of money into (marketing) it? A managed group would put some money into marketing it. That’s a big factor in releasing a new variety into a market that has plenty of apples already. When it’s managed, there’s accountability.”

Minnesota growers ‘unrestricted’

Bedford said a different approach was taken on the future distribution and use of MN55 in Minnesota, somewhat in reaction to the controversy that arose following the awarding of an exclusive license to Pepin Farms in 2006 of the SweeTango, a cross between the Honeycrisp and Zestar varieties.

“With SweeTango, we made an exception for Minnesota growers, primarily retail growers, who most sell directly to the public,” Bedford said. “In either case, it gave them access to the variety, but with SweeTango there were some limitations on how much they could wholesale. Those were the only limitations, but it created a problem for a couple of the wholesalers, and that all got resolved.

“As we moved ahead with this variety (MN55), we’ve taken those restrictions off the table,” Bedford said. “Every Minnesota grower, as long as it is a commercial grower, has full access to this variety. There are some restrictions in quality of fruit – you can’t use the trademark if it doesn’t meet the standard.”

He said the situation creates “two different levels of management for the Minnesota grower and the national growers. The intention is really to go on a case-by-case basis. I think what you’re looking at is when we get an apple that has national or international potential, then there is all that much more room for potential problems. We’re at the point where we want to be sure it’s managed.

“For Minnesota growers, there’s nothing to complain about (regarding the MN55 introduction). To them, they have basically full access to it. There are regulations, as with any managed variety, in terms of marketing and protecting the brand.

“I haven’t heard a single negative peep,” Bedford said. “(Minnesota growers) are signing up to license themselves through the university, which gives them the right to grow the tree and get it propagated. They’re putting in orders for trees.”

Will future apple varieties in the UM pipeline be released in a similar fashion?

“Since SweeTango, we’ve released two varieties that were readily accessible,” Bedford said. “If they’re to be grown regionally only, and there’s no worry about whether they’re grown in Washington or wherever, there’s not as much need to manage it. We will have some varieties that will have more regional interest. We would have those freely released.

“If it’s going overseas, you have that many more pitfalls,” he said. “If your kid is an international traveler, you want to be sure they’re well protected. That’s probably just the rough criteria (for having varieties be managed).

“If it gets half way around world and the fruit quality isn’t good, you’re not in a good position to manage it from Minnesota,” Bedford said.

– Gary Pullano