Apple Brands–Factors of Success

Future Orchard Walks

Junami ® JazzWinter ® 2017

Apple brands – factors of success

Michael Weber

Horticultural Consultant MBA ‚International Marketing‘ GermanyEDEKA 31.10.16

4 Education 1990 Horticulture Engineering FH Weihenstephan Junami ® 2002 MBA „ InternationalJazz Marketing“ ® ESB Reutlingen

Business Activities 2003 foundation of webfruit / GmbH www.web-fruit.de 2004 foundation of VariCom GmbH www.varicom.ch 2008 foundation of fruit.select GmbH www.opal-apple.com

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T 2 P

JunamiIntroduction ® Growth Maturity Saturation Degeneration Jazz ®

Golden/Red Jonagold Delicious Turnover Elstar Boskoop Gloster Braeburn Royal Gala

Fuji Pinova Profit Cripp´s Pink ?

T = increase T = increase T = slow increase T = stable T = backwards Time P = zero P = increase P = stable EDEKAP = backwards 31.10.16 P = backwards

production share % 3 2 Golden Del. 2.530 21 Jonagold et al. 1.259 11 Jazz ® Gala 1.204 10 Idared 1.064 9 Red Delicious 633 5 Shampion 520 4 Elstar 394 3 Granny S. 390 3 Fuji 309 3 Variety Range EU-28 Countries Representing 74 % = 8.885.000 t Braeburn 322 3 out of total 12.005.000 tons Cripps Pink 260 2 Source: WAPA 2016 EDEKA 31.10.16

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Jazz ®

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€/ha € cent/kg €/ha € cent/kg labour harvesting (292/333 Akh/ha) 2269 6,5 2587 5,2 var. harvesting cost (KOB) 400 1,1 450 0,9 total harvesting cost 7,6 6,1 Labour pruning/thinnning (70/100 Akh/ha) 544 1,6 777 1,6 Fertilizer 200 0,6 300 0,6 pest & weed control 1500 4,3 1700 3,4 Others 300 0,9 350 0,7 var. maschinery cost orchard maintenance (KOB) 400 1,1 500 1,0 total variable costs 8,5 7,3 depreciation building & repairs (180 T/30 years) 400 1,1 400 0,8

Dpreciation maschinery (harvesting equipment) 665 1,9 665 1,3 depreciation maschinery cost (maint./spraying) 478 1,4 478 1,0 2. level depreciation orchard investment over 15 years – 22 T 1467 4,2 1467 2,9 replatning (Nectria, wood diseases) 400 1,1 9,7 400 0,8 6,8

Overhead cost. (KOB) 1 200 3,4 3,4 1 200 2,4 2,4 total overhead costs Land lease annual (ha) 1000 2,9 1000 2,0 Capital cost orchard investment (3%) 22 years 330 0,9 330 0,7 1. level Capital cost maschinery (3%) AW 224 T € 224 0,6 224 0,4 Capital cost building (3%) AW T 180 € 180 0,5 180 0,4 total calculatory cost 4,9 3,5

Orchard Manager (30 €/hour) 67 % 2933 8,4 8,4 2933 5,9 5,9 3. level EUR/Cent 42,5 32,0 Source: POB 2017 good news

8 ✓ about 80 apple breeding programs to choose from selection

Junami✓ more ®disease tolerant varietiesJazz ®available improvement ✓ consumers are open to new varieties features

✓ retailers are open to new varieties profitability

✓ introduction in emerging markets opportunity

✓ alongside shipment of existing varieties attention

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9 ✓ differentiation of look less distinctive

Junami✓ packout ® / requirements Jazz ® unknown ✓ consumer demand uncertain

✓ Investment into a brand high

✓ critical mass / collaboration necessary

Variety development: 07 up to 14 years Brand development 14 up to 21 years

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1 „ So far I‘m unaware of any supermarket putting pressure on growers to 0 plant an entirely new variety. Junami ® Jazz ® Planning is almost entirely a ‚producer push‘ strategy.

A commitment over lenghty periods of time is desirable.“ Source: Paul Paynter, 2009

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Pink Lady®- the most seductive of all apples

SweetTango™: passion to the last bite sensual & Golden Kanzi®: passionate Delicious Seduce Life

Granny Red Prince: Smith Honey Crunch® - a crisp type The apple my well-being The apple as a Bosk as a natural apple with bite natural product: product op

Kiku® - perfect &beautiful authentic & Elstar Fresh Apple real Emotion Jazz™ - taste you Braeb can hear. urn Junami® / Diwa®: refreshing thirst Gala quencher crisp bite athletic and fit

Joya™ - a taste experience understanding the DNA

1 bruising sensitivity self-thinning 6 chilling requirement size range Junamidisease tolerance® Jazz ® skin finish frost sensitivity storage potential fruit set tree spacing growing habit tree health harvest window tree quality leaf quality tree spacing number of picks virusfree budwood packout pest tolerance physiological disorders Productivity rootstock selection EDEKA 31.10.16

1 ✓ create your own (inter-)national network 7

Junami✓ attend ® conferences, fairsJazz, exhibitions ® , seminars ✓ use your local/national R & D network

✓ talk to variety managers and challenge them

✓ untertake a SWOT Analysis

✓ have a strategy and follow the plan, regardless short-term drawbacks

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3 „savoir faire“… how are we doing it ? 8

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1 Variety Brand Variety Brand 9 Name Name Name Name Junami ® Bonita Jazz? ® PremA96 Rockit® CIV 323 Isaaq® MC 38 Crimson Snow® Fujion ? Fengapi ? Inored Story® Minneiska Sweetango® Ladina ? Shinano Gold Yello® Lb 17906 ? Lumaga Galant® PremA34 ? SQ 159 Natyra® UEB 32642 Opal® Dalinette Choupette® Xeleven Swing® EDEKA 31.10.16

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2 Identification of 3 factors… 5

1. The mainstream of consumer behaviour is slower than Junamianticipated ® as often Jazztrend ®scouts believe in.

2. Most of the brand image (emotions) is related to your childhood. Positive Memories…

3. Clear Mission and Vision, along with a traceable / understand- able authorization of existense, „raison d‘etre“, does it make sense what we are doing?

Source: Peter Felser, Board President of Serviceplan Suisse, Zürich // Handelszeitung Nr. 44 /2015 EDEKA 31.10.16

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2 ✓ communication of product specification 7

Junami✓ control ® of quality Jazz ® ✓ harvest prediction

✓ supply program

✓ control of plantings

✓ activities at POS

✓ Promotion thru packaging & logo EDEKA 31.10.16

2 ✓ Plant Variety Rights Intellectual Property 8 ✓ Trademark Rights Junami✓ Brand ® Integrity Jazz ® ✓ Traemark Defence

✓ Ownership of rights Organization ✓ Complexity of legal structure ✓ Quality of network ✓ Passion of people

✓ Unique selling proposition Brand Management ✓ Brand identity ✓ Brand positioning ✓ Brand enforcement EDEKA 31.10.16 ✓ Commuication

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3 4 1. New Colour Category GOLD

Junami2. Low Residue ® Program Jazz ® DISEASES 3. Flavour FIRST

4. Outstanding shelf-live PERFORMANCE

5. Transport & Manipulation SUPERIOR to ‚Golden Delicious‘

6. Marketing Organization OPAL® PARTNERSHIP PROGRAM

7. Branding OPAL® - UNIQUE SELLING PROP

8. Development GLOBAL EDEKA 31.10.16

3 Sales 0 “The color-break of Opal® is the #1 selling feature, and in-store demos are #2“ Junami ® Jazz ® - Matt Miles – First Fruits Marketing 10 Oct. 2014

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2013: start - PVR rights 4 0 2014: Propagation of certified budwood Jazz ® 2016: Plattform – Groupe Poire Suisse, GPS 2016: Growing of trees in nursery 2017: kick-off concept first trials at retail level 2018: 1st year of Swiss Production EDEKA 31.10.162020: Supply Program at Swiss Retail Level

4 ACTION STEPS YEAR PLAYER 1 Crossing 2000 Agroscope Jazz ® Selection 2010 Agroscope

Cultivar protection 2013 Agroscope / VariCom

Plant material 2016 Nurseries

Production start 2018 growers

Retail level - start 2020 packer / marketer

Internationalisation 2022 EDEKA 31.10.16Network licensed partners

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4 4 whole chains can become competitive units rather than individual firms within chains Junami ® Jazz ®  Chains compete against chains  co-operating to compete Boehlje, 1998

In this new way of thinking about the nature of competition, the quality of relationships up and down the chain become key drivers of success.

Gifford, 1998

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4 ✓ clean production environment 8

Junami✓ face to® face Jazz ® origin ✓ story identity

✓ revenues fair split

✓ sustainable finance

✓ be different exclusive

✓ communication consumer EDEKA 31.10.16 ✓ why? sense

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EDEKA 31.10.16 in line with nature thank you !

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