Since 1982, Martin Peeters, owner of an apple tree nursery and Robert Jensen, research director at the fruit breeding centre of a German university, had worked together on the development of new apple varieties. In the nineteen nineties, Peeters’ knowledge of traditional breeding and Jensen’s expertise in molecular breeding had resulted in a number of high quality breeds. They were now, in 1998, thinking of founding a company to commercially grow and sell these new breeds. In fact, they were convinced of consumers’ interest in new apple varieties. They based their opinion on a successful experiment of Peeters’ company had conducted with the German-based supermarket chain, Home.
However, there were important hurdles Peeters and Jensen needed to tackle. The apple market in Northern Europe offered ever diminishing margins for both apple breeders and growers. The absence of quality differentiation, an over-supply of fruit and declining consumption had led to low prices for the producer. Traditional breeding techniques were barely profitable, but the market was still unwilling to embrace Genetically Modified Organisms (GMO’s). If they wanted their company to succeed, they had to think very carefully about the commercialization of their produce. This required a thorough analysis of the value chain and the relationship between the different actors involved.
Written by Petra Andries, Anneleen Bruylant and Yvonne Kirkels from the University of Leuven and Fontys University of Applied Science. Download case and teaching note at www.ecch.com or request them from Petra.Andries@econ.kuleuven.be.
