When you think of Apple and innovation, you’re probably thinking of Steve Jobs and the iphone, but Hawke’s Bay is the home of another apple innovator, but of the eating kind.
Prevar developed the PremA96 apple variety (cultivar) that has become a global sensation under the brand name Rockit™, a pint-sized apple that has rocked the conventional snack food category through the work of Hawke’s Bay based business Rockit Global who own the brand. Prevar, formed in 2004, is a private joint venture company owned by the apple sector between New Zealand Apples & Pears Incorporated, Plant & Food Research (New Zealand) and Apples and Pears Australia Limited.
Prevar chief executive Tony Martin has ambitions of ensuring many more premium New Zealand apple brands or “number one hits” propel New Zealand’s PREVAR chief executive Tony Martin global apple market share from around 1% to 5-10 percent. PremA96, its first international number one is now sold in over 30 countries, and grown in eight – such as New Zealand, the US, the UK – and is regarded as a premium high value apple variety, not a commodity apple such as Royal Gala.
At any point of time Prevar has around 200 new varieties in stages of R&D that are narrowed down with only the best of the crop making it into full production.
In 20 years Prevar has commercially licenced 17 varieties and entered into a total of 33 license agreements. It holds more than 170 trademark registrations across the globe. Tony says the Prevar business is centred around four core areas – consumer insights-driven innovation, a world-class breeding programme (with Plant & Food Research), customer-centred commercialisation, and industry & category Leadership.
He says that although the New Zealand industry remains at the forefront of innovation and premium quality in the global industry, it is constantly challenging its thinking and pushing the edges of innovation, to maintain and enhance its competitive advantage as a value creator.
“We are an innovation company and I think it’s important to recognise that a big chunk of our revenue is reinvested back in to R&D so that we stay at the forefront with the best products. Each year in June, apple growers and marketers are invited to an open day to see the latest varieties on offer.
“We’re owned by the industry, so it is an open forum and everyone can try the apples and put in an expression of interest. When we see a big opportunity for an apple to be globalised then we will look at prospective licensees ambition, markets.
“We’re owned by the industry, so it is an open forum and everyone can try the apples and put in an expressions of interest. When we see a big opportunity for an apple to be globalised then we will look at prospective licensees ambition, capability and capacity to grow as we know it takes immense resources to make new varieties a big success in international markets.
“We enter into a testing arrangement and the prospective licensees get some trees to plant, which are monitored over a number of years,” he says.
Apples with the greatest chance of global success are actively promoted and agreements are reached via commercial negotiations. Groups of individual companies may get together to create a marketing entity to license the new variety or it may be licensed with larger integrated growing, marketing and export corporates so as to fully maximise the opportunity, which in-turn helps bolster ongoing investment in future varieties.
“What we don’t want to do is spend lots of money developing a great variety, get it to the start line and then it doesn’t get maximised to its full potential,” he says.
Presently several millions of dollars are invested each year with Plant & Food and its world leading breeding programme and the more number one hits, the more money can be invested to stay ahead with the latest innovation.
“It gives us more opportunity to do different things such as look at really distinctive product characteristics and new breeding technologies to expand our reach and create more jobs across the industry and higher returns to growers in New Zealand. It gives us a chance to look at potentially replicating what we do in New Zealand in offshore markets.
Identifying a new global sensation starts with understanding what the market wants and then looking at how to create a product that appeals. So far, the success rate is about one in 50. “The product concept is primarily market driven, so we look at where we see
an opportunity for a particular type of apple.
For example, with PremA96, it was a snack apple for health conscious parents to buy for their kids instead of an unhealthy option while Dazzle™ is a sweet, crunchy red skin apple that appeals to an Asian consumer base.”
Akin to a wine maker or a craft beer brewer, the breeders mix and match genetic attributes to develop a new variety. “We review the genetic material and cross different “parents” and then we observe the performance of the tree and the fruit to determine what other tweaks or additions need to be made.”
“There is an element of crystal ball gazing too as we are developing a new product that takes many years to get into full production. What we think is popular today in terms of flavour characteristics might not be popular to a consumer in 2040.
Tony says the next generation of apples with strong consumer interest may include a greater focus on the functional health benefits. “We all know an apple a day keeps the doctor away, but how many people know why?
“We are exploring new varieties that offer a better nutritional composition that is high in the likes of fibre and vitamins, so this will be a new dimension to add to the product brief.
Imagine a ‘fit apple’ that not only keeps the doctor away but enhances your wellbeing and your performance physically and mentally. This might not be too far away.
“We want Hawke’s Bay to continue to be the premium fruit growing region and innovation hub, not only in New Zealand but in the world. We’re very fortunate to have an incredible team of scientists based right here in the Bay that are the very best in the world at what they do.
“A key driver of our business is we bring out the best innovative stuff from New Zealand and to genuinely scale the industry and to get a better returns to grower as competition around the world is fierce. For every global hit the royalties created are invested back into research and development to keep the New Zealand industry at the forefront.
The more success Prevar has in developing new apple cultivars with its shareholder partners that are then licensed to reputable growers and exporters both in New Zealand and globally, the greater the economic returns will be to Hawke’s Bay and the wider industry. We grow the best apples in the world here. Yeah.
And we wanna maintain that. And that will always be in exporting our premium varieties from New Zealand to key offshore markets and growing our some of our other varieties closer to consumers. Both of these are really important parts of our growth strategy. If we can grow from 1% market share of the global industry to 5% or 10% then we’re going to have to do things a bit differently from how we have grown the industry so far,” Tony says.