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Support for Growth
Plant material commercialization of Kaleiand other club varietiesJune 2019
1. APAL
2. Kalei Results
3. Our Approach
4. Current Examples
Support for Growth
Who is APAL
27 June 20194
Apple and Pear Australia Limited (APAL) is the national peak industry body supporting nationally 1,500 apple and pear growers throughout Australia.
APAL Overview
27 June 20195
APAL Overview
Chief Executive Officer
Manager
Industry Services & Export
Future OrchardsManager
Regional Industry Coordinators
Chief Operating Officer
Group BrandRegional Manager SEA &
Americas
Group Quality & InnovationRegional Manager
Middle East & Oceania
Group Marketing
Regional Manager
Europe & Africa
Managing Director Coregeo
Future BusinessManager
Chief Financial Officer
Accounts Manager
Head of Legal
Strategic & Systems Implementation Project Manager
Data Scientist
Admin/Executive Assistant
IT Support
Head of Communications & Media
ManagerCommunications & Media
Manager Events & SponsorshipManager
Communications Graduate
Head of Government Relations & Advocacy
APAL has a team with global responsibilities. This team provides global expertise for quality management, brand management, marketing and legal support.
27 June 20196
APAL Overview
APAL Personnel
APAL Partners
APAL further extends its impact through a global network of subsidiaries, personnel and commercial partners.
27 June 20197
APAL Overview
Coregeo UK Limited: Licenses and markets fresh produce.
Pink Lady Development: Manages new and emerging Pink Lady markets.
Prevar Limited (NZ):Development of new varieties and brands for apples and pears.Exclusive option, testing and commercialisation for Australia.
APAL Commercial OperationsCommercialiation of new varieties into Brands.
Sakata Joint Venture:Strategic investment group for identification of new fresh produce varieties for commercialization.
Investments for now and the future. For domestic and global.
AboutBrand manager, Licensor and marketer of fresh produce in the UK and EMEAMaster Licensee of Pink Lady® UK
APALApple & Pear
Australia
COREGEOUK
100% Owned and Operated
AboutJoint Venture between Star Fruits Europe and APAL to develop SEA and The Gulf states
PLDAUSTRALIA51% Owned and
Operated
PREVARNEW
ZEALAND45% Owned and
Operated
AboutNew variety breeding companyDevelops new cultivars and commercializes.APAL has exclusive rights to Australia
StrategicInvestment
GroupUK
50% Owned and Operated
AboutJoint Venture with Sakata Europe to develop and manage brands for EMEA and UK.
APALCommercial Operations
27 June 20198
• APAL is a registered Not for Profit
• APAL represents Growers, not Shareholders
• APAL does not have to sell trees, or grow maximum fruit. We serve no masters
• APAL owns and manages the world’s largest Branded Variety
o We know what NOT to do
• APAL has first access to 2 x funded Australian Government breeding programs.
• APAL manages the Independent APFIP new variety testing program in Australia
• APAL receives government funding to employ technical capability resources and R&D
A Unique Model
Support for Growth
Trial Updates27 June 2019
27 June 201910
Middleton Report 2013Comprehensive Background
27 June 201911
Washington State, NY State, Michigan, Virginia, Canada
Cornell University resistance testing complete July 2019
North America
27 June 201912
Building interest amongst trial sites in the USNorth America
27 June 201913
Harvest Report Yakima (Stemilt) 10th October 2018
• Some great results, in the majority. Starches converting evenly, good sugar-acid balance, good pressure, low defects
Stemilt
Pick Date 10-10-2018
• Brix 13.5
• PH 3.61
• Acid 0.37
• Starch 2.9
• Avg Pressure 10.5
• Min Pressure 8.8
• Defects 3
Pre Pick 18-09-2018
• Brix 13
• PH 3.72
• Acid 0.42
• Starch 2.3
• Avg Pressure 11.8
• Min Pressure 10.7
• Defects 2
27 June 201914
Harvest Report Yakima (Stemilt) 10th October 2018
• Available on request
Washington
VarietyPre-harvest/ Post-harvest
Pick Date Brix pH AcidityAvg.
StarchStarch
1Starch
2Starch
3Starch
4Starch
5Starch
6Avg.
PressureMin.
PressureDefect 1
# for Defect 1
Kalei Pre 9/18/18 13.00 3.72 0.42 2.3 2 3 5 0 0 0 26.1 23.5 Bruising 2
Kalei Pre 9/24/18 13.30 3.60 0.44 2.1 0 7 1 0 0 0 24.4 21.4Stem Bowl Russetting
2
Kalei Pre 10/1/18 13.60 3.83 0.38 2.8 0 8 6 0 1 1 23.7 18.7 Bird Peck 1
Kalei Pre 10/8/18 14.30 3.69 0.41 2.9 0 4 8 2 0 0 23.5 19.7Stem Bowl Russetting
2
Kalei Harvest 10/10/18 13.50 3.61 0.37 3.4 0 5 3 1 0 3 23.2 19.4 Bruising 3
27 June 201915
Western NY State (Lyndonville)
• 70 Trees at 2nd leaf
• No scab present after 2 seasons
• Trees growing well, reaching 3rd wire easily
• 1,000 trees for 2020
Canada 2018:
• 65 trees performing very well. 1,000 more for 2020
• Consistent sugars and pressure, trees are easy to grow and train to the trellis, trees now above top wire on Nic 29 in third leaf
• Good crop third leaf - if planted "high density" - around 1500 to 2000 trees to the acre -- yield would be about 1000 bushels/acre in only third leaf
• Good clean white flesh, juicy, sugars and pressures, with exceptionally clean finish, harvested around 21/22 October
• Smooth skin, nice red colour
• Thinned chemically - singled out nicely
US Trial Sites
27 June 201916
Washington State Ephrata
• 20 trees on G41 rootstock
• tended to have higher sugars and ripened faster -- mid October 2018
• pressures over 16 psi even when overripe with light water core appearing
• Fruit not as bright as Canadian and NY fruit, but fuller colour
• Late pick dark and uniform in colour
• More uniform in shape than we see in Australia
• good sugars, with better texture, pressures and flavour than the Cosmic Crisp we tried
• Tree was nicely formed. We did not see the Cosmic Crisp trees which are erratic during growth.
US Trial Sites
27 June 201917
Michigan:
• North too cold
• 40 trees in north central part -- 2018 planting
• 40 trees in south Michigan -- 2018 planting
• 1,000 trees for release 2020
Hudson Valley:
• 50 trees in eastern and 50 trees in western part of lower Hudson Valley -- planted 2018
Virginia:
• 100 Trees – growing nice early fruit after 2 seasons
• To receive 1,000 trees for 2020 release
US Trial Sites
27 June 201918
East Coast Growers Initiative
APAL has assembled a group of 6 growers in the East Coast where fungal resistance is attractive. A Territory Management structure will be introduced to promote plantings and develop a marketing fund for launch to retail
• NY and New Eng - Ward Dobbins
• Central US: Applewood Orchards -- Scott and Jim Swinderman
• Canada: Norfolk Fruit Packers - Tom O’neill
• Mid Atlantic US - Keystone Fruit Sales - Lisa Fetterhoff
• Virginia – Turkeyknob – Jamie Williams
Willow Drive (West Coast) have provided nice trees to the group and will remain our Territory Nursery for propagation in North America.
They have excellent sublicensing processes and relationships with other nurseries and individuals to accomplish the goals of the variety manager (APAL/ DAF). They will manage scionwood.
US Trial Sites
27 June 201919
France & Italy
• First information due from 2016 plantings in Loire Valley, South West and Avignon and Italy
• Trees also in Germany under trial agreement in 2017
• Feedback: “The qualities are not unique enough for the conventional market, but could be interesting for Organic production due to scab resistance”
• Additional PBR extensions across Europe in 2019 for further evaluations
Europe
27 June 201920
DOSK
• Fruit from trial sites in Dresden, East Germany. Pillnitz fruit research station.
• Testing agreements were signed with DOSK and local testers.
• Feedback: “Fruit quality is outstanding, as is technical data”
• Presented fruits and technical data during the knowledge days of Eastern German fruit growers at Pillnitz in 2018
Germany
27 June 201921
• Craig presenting to grower symposium in June 2019
• Would like to re-connect with growers who have contacted us last year
• Would like to arrange for attendance at Kalei Field days in 2020
• Would like to see Brazil growers assemble a growers group to help manage the variety in the territory
Brazil
Support for Growth
Our commercial approach27 June 2019
27 June 201923
APAL commercialises, markets, manages and protects brands directly, and through its wholly owned subsidiary, Coregeo Limited UK.
APAL Commercial Projects
2.44kgPears Australians
eat per year
APPLES PEARS BROCCOLI
27 June 201924
Now In Development
Super Premium
Everyday Premium
Economy/ Commodity
RS103-110• 6 x Additional AVS Pears
including 534
• Various EDVs under evaluation for Pink Lady® and Joya®
*
Pipeline
* Developed Trademark & Brand Guidelines
These varieties and brands are managed, not ‘CLUBS’
27 June 201925
Choices
27 June 201926
Territory Management, Not Master Licence
1. PBR & TM: Breeder owns TM. Breeder profits from a perpetual share of:a) Global license feeb) Tree Royaltiesc) p/Ha Royaltiesd) Fruit Royalties®
2. GLOBAL BRAND MAMANGEMENT LICENCE (GLOBAL BRAND OWNER): APAL is the Global Brand Manager – NO Master Licensees
3. TERRITORY LICENCES: Appoints and Consults with Territory Managers, implements capability-based licenses by territory
a) Growersb) Packersc) Exporters/ Importersd) Marketing agencies
4. QUALITY: Global Quality Standards are Managed by Global Brand Manager and implemented at local level
5. BRAND MANAGEMENT: Brand Owner delivers brand strategy, brand planning, global brand assets, global campaigns and global licensee support centre
6. LEGAL TM DEFENCE: Brand Owner defends Brand globally
Ideal Model –Our Learnings
27 June 201927
Plant lots of trees and create supply
Create a great brand and prove demand
APALs Approach
APAL prefers to partner here and share the financial benefits
APAL is stronger here, and believes this is
guarantees success –people won’t plant
something without a consumer vision/ plan
Push Trees
Create Consumer Demand
27 June 201928
Stemilt (US) testing/ assessing over 160 new (mainly) red varieties
Prevar (NZ) introduced 9 at last board meeting
Mostly sweet, red, crisp varieties
Consumer first approach
APALs Approach
Consumer Propositionwith some
Novelty
Improve Successful
Current Products
Easy/ Cheap to
Grow
BrandManager
Nursery Grower
Successful New
Varieties
27 June 201929
• Sweet, block red, large, mostly firm (Australia & US), Envy-type taste
• Light, sweet flavour – Low to Mid range sugar, low acid
• Exceptional crispness even when left at room temperature for 3 x weeks
The VarietyConsumer
Propositionwith some
Novelty
Easy/ Cheap to
Grow
• Scab resistant – proven Australia, in testing @ Cornell in US, not present Europe or New Zealand
• No sprays in 17 seasons, highly suited for Organic
• Retains firmness and crispness whether sold fresh or out of long-term storage
• Tolerant to Alternaria and western flower thrip
• Late colour ensures picking at optimal maturity.
• By nature a large apple suitable for US, and the trees can support heavy crops.
• Lays out nicely to trellis – uniform shape and ripeningThis part drives consumer demand for the product. APAL asks is this Novel
enough for a new variety?
Support for Growth
Current Commercialisation27 June 2019
27 June 201931
Production Targets
412,189 trees planted by 2026.
9,274 MT yield annually at full maturity
APAL has revised targets upwards
RS103-130 KALEI August
Year 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Total Incremental Tree Plantings Australia 9,242 1,274 5,000 5,000 30,000 20,000 20,000 20,000 20,000
Cumulative Total Tree Number - Australia 37,199 38,473 43,473 48,473 78,473 98,473 118,473 138,473 158,473
Total Incremental Tree Plantings Overseas 716 4,000 4,000 15,000 30,000 50,000 50,000 50,000 50,000
Cumulative Total Tree Number - Overseas 716 4,716 8,716 23,716 53,716 103,716 153,716 203,716 253,716
Total trees 37,915 43,189 52,189 72,189 132,189 202,189 272,189 342,189 412,189
increase in tree number that year 9,958 5,274 9,000 20,000 60,000 70,000 70,000 70,000 70,000
Production Scenario - Tree Ages
Trees 1 year old 9,958 5,274 9,000 20,000 60,000 70,000 70,000 70,000 70,000
Trees 2 year old - 3,363 9,958 5,274 9,000 20,000 60,000 70,000 70,000 70,000 70,000
Trees 3 yr old 13,695 - 3,363 9,958 5,274 9,000 20,000 60,000 70,000 70,000 70,000 70,000
Trees 4 yr old 17,625 13,695 - 3,363 9,958 5,274 9,000 20,000 60,000 70,000 70,000 70,000 70,000
Trees 5 year old 17,625 13,695 - 3,363 9,958 5,274 9,000 20,000 60,000 70,000 70,000 70,000 70,000
Trees 6 years old 17,625 13,695 - 3,363 9,958 5,274 9,000 20,000 60,000 70,000 70,000 70,000 70,000
Mature trees 17,625 31,320 27,957 37,915 43,189 52,189 72,189 132,189 202,189 272,189 342,189 412,189
Calculation of Production
Year 2017 2018 2019 2020 2021 2022 2023 2024 2025
Tree Age 4 5 6 Mature Mature Mature Mature Mature Mature
Kg/tree at each age 7 12 18 25 25 25 25 25 25
Packed Kgs
Conventional & Organic 75% 85% 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% 90% 90%
Kg produced in Australia 121,016 225,093 365,792 442,552 483,992 466,584 576,165 769,093 1,067,377 1,531,044 2,112,358 2,645,229 3,081,214 3,396,093 3,565,643
Kg produced in ROW 2,329 23,403 33,657 136,948 331,300 491,427 747,561 1,131,459 1,708,875 2,451,208 3,381,895 4,235,024 4,933,038 5,437,160 5,708,610
TOTAL KG PRODUCED 123,345 248,496 399,449 579,500 815,292 958,011 1,323,726 1,900,553 2,776,253 3,982,253 5,494,253 6,880,253 8,014,253 8,833,253 9,274,253
250,000 tree target by 2026
27 June 201932
How do we reach our numbers?
Current Situation
• 30% of term elapsed since trials, 26% of planting target
• 4,000 trees released to East Coast US 2018
• NZ trial sites producing great fruit
• Trees cleared quarantine in South Africa 2018
• Europe released, trial report pending
• Added Switzerland, Serbia and UK under EU PBR.
What we are doing
• APAL to set minimum targets
o Domestic tree numbers 2026 +400k, OS +400k
• US Focus NH strategy
• Incentive based licences for Territory Nurseries
• Re-present the variety in Vacaria
• Re-launch Kalei this winter
• Grower focussed licenses – low cost of entry to the variety
• Territory Management roles in development
• New ‘brand’ identity 2019
27 June 201933
Kalei has many great benefits for growers…
But Kalei branding has limited consumer appeal.
• Old fashioned, duplicated many times in apple brands.
o Scriptive font (Pink Lady®)
o ‘Just love that apple’
o Lots of love already: Pink Lady (Heart), Smitten, Eve, Envy, Sweetie, Dazzle – no real point of distinction
• There are hundreds of good red apples currently in commercialisation
• APAL create Brands, not Trademarks
Kalei Re-brand
27 June 201934
Kalei re-brand
27 June 201935
Kalei re-brand
27 June 201936
Category Disruptive Brand Identity Development
27 June 201937
New brand in development
Honesty – it’s a nice red apple…
27 June 201938
APAL Overview Our ProcessAPAL strength
APALAdvise PBR –
Territory Managers Licensed
COREGEO100% Owned and
Operated
AboutFruit/ IP Royalty sharing through licenses
PREVARNEW
ZEALAND45% Owned and
OperatedAboutTree and p/Ha royalty sharing through licenses
Australian Govt.
Breeding Programs
APFIP Trial and Testing
APAL Selected &
IncentivisedNurseries
APAL Selected Grower
Members –Trial Sites
APAL Grower Members Licensed
Selected Exporters
BRAND
APALTechnical
Team
APALHead of Brands
APALLegal Counsel
Licensed Importers &
Retailers (Pink Lady)
APALHead of Brands,
Quality, Data
AboutFruit/ IP Royalty Generates Marketing Fund
AboutFruit/ IP Royalty Generates Marketing Fund
Thank-you
Support for Growth