Rabobank report looks at fruit and nut breeding business growth

There is plenty of business growth ahead for high-tech fruit and nut variety development, according to a new report from Rabobank.

Authored by Rabobank analysts Chiakai Kang, David Magaña and Cindy van Rijswick, the six-page report looks at the untapped opportunities for genetic players in the expanding fruit and nut market.

“Genetics play a key role in sustainable and consumer-centric production by providing cultivars that are more input-efficient and/or offer a better eating experience,” the report summary said. “As there are more than 300 different types of fruit and nuts with distinctive characteristics, the potential opportunities will vary greatly by crop type. Opportunities depend on the potential market size, the production areas, the genomic complexity and the duration of the breeding process.”

In coming years, the report said fruit breeding will evolve from traditional back-crossing of varieties to genetic and digital tools-assisted breeding. In the data-science based approach, breeding companies use existing genetic data to predict phenotype and fruit performance “without actually growing the plant,” the authors said.

“The computer predicts the potential of various breeding lines (branches) hence the lines with low potential do not need to be grown, saving an enormous amount of time and resources,” the report said. 

A potentially promising and groundbreaking technology for the longer term is genome editing, the report said. Genome editing is technology that allows genetic material to be added or altered at a particular location in the genome.

In Europe, rules about gene editing are strict and product is regulated as genetically modified, the report said. The extent of consumer acceptance of gene editing for variety improvement is yet to be determined, the authors said.

The report’s conclusion noted other challenges associated with fruit  and tree nut breeding, including the lengthy breeding process, uncertain success rates, the risk of intellectual property infringement, are not likely to disappear in coming years.

“Still, the outlook for the fruit and nut genetics business is positive,” the authors said. “Genetic improvement is needed to meet growing global demand and produce sufficient higher quality fruit in a sustainable way.”

Several tactics can be employed to increase the chances for success, the authors said. Those strategies include the adoption of new breeding and propagation technologies, strategic partnership with supply chain partners and the application of appropriate intellectual property control mechanisms, the report said. 

“New varieties should be a win-win for all players in the chain,” the authors said.