There was big news in the table grape industry earlier this week, with two of the most important breeders in the sector announcing a deal that would see the two organizations combined into one.
AM FRESH Group said that it had entered into a definitive agreement to acquire International Fruit Genetics (IFG) and to merge it with its subsidiary Special New Fruit Licensing (SNFL).
The deal, which also saw EQT Future Fund come on board as a minority investor, would result in the merger of two powerhouses of table grape varietal development. Among SNFL's varietal portfolio are Carlita, Timco, Allison, Timpson and Ivory, while the IFG lineup includes Cotton Candy, Sweet Globe, Jack's Salute, Sweet Sapphire and Sweet Celebration, in addition to its cherry varieties.
AM FRESH will be the controlling shareholder of the combined entity. It says the move will accelerate varietal breeding, development and commercialization, benefiting licensed growers, partners and consumers with more sustainable alternatives and improved varietal options.
Meanwhile, IFG CEO Andy Higgins says the transaction - which is entering into a review process which may take 12 to 18 months to conclude - represents "an advancement for the entire industry".
But what could this major tie-up mean for the rest table grape sector? The Grape Reporter spoke to several industry members around the world to hear their reaction.
Oscar Salgado, a leading table grape consultant, said that there were two ways of looking at the tie-up.
"One is undoubtedly positive, because this brings together two very prestigious and tremendously efficient programs, with plant material that has been very successful for both," he said.
"Therefore, the union between these two genetics should give an even better plant material. Some will provide resistance, others flavor and caliber. The germplasm bank that both companies maintain by merging can launch something tremendously positive to the market. From a technical standpoint and availability it sounds like a very positive thing."
However, the negative that the transaction presents is that there will be less competition in the grape breeding sector.
"When you look at the planted hectares of each of the programs, they have a significant percentage of the market, and so this means less competition," he said.
"Therefore, for medium-sized producers it may mean they have a lower bargaining power. It creates some uncertainty, which might be solved when these programs come out to announce their new policies or maybe keep them.
"The reaction of the producer who goes to the orchard every day is 'Wow. A mega-merger What does this mean? Will my bargaining power be the same as when we had seven programs, of which three or four had a very high market share?' These two programs will be able to account for close to 50% of the planted hectares in some countries".
John Pandol, Special Projects Director of California-based grape company Pandol Bros, also weighed in on the news.
"Of all the technologies and production techniques a grape grower uses, varietal selection is the most visible to the buy-side," he said. "Really, Pandol Bros. does not see much change in California. Perhaps the SNFL varieties bred in Spain will get to the trail stage in California faster than before."
He said that as an importer, it will be interesting to see what the new combined entity does in the traditional grape growing areas.
"Each production area developed differently," he said. "Will offerings be more open or more restricted in the future? Will commercial attributes like ‘varieties clubs’ or volume limits play more of a role, less of a role or no role? Finally, what will development of new geographies look like?
With regard to the investors, he said: "EQT is new to us and appears to be invested in many areas, but PaineSchwartz is no stranger to the food technology business, operating Prima-Wawona here locally, and has been a partner in SNFL for a few years."
Corné van de Klundert, the Managing Director of major European importer Origin Fruit Direct, said the merger puts together two very important gene pools, and he expects the new varieties coming out of that will provide even better varieties for the future of the grape industry.
"A lot of development has already been done on improvement of taste, increased yield, and reduction of inputs. Currently we are seeing continuous adverse climatic conditions happening in all grape growing regions that are reducing the condition of the grapes," he said.
"On top of that the average transit time from packhouse to arrival in the market is increasing dramatically due to the shipping crisis, and that makes the condition of the grapes on arrival frequently causing problems.
"Hopefully the combination of IFG and SNFL will bring varieties that are more resistant to these conditions. That would certainly increase the level of satisfaction of the customers and improve the net return on the farm by reducing the number of claims."
Mark Greenberg, CEO of Capespan North America, said: "We receive IFG and SNFL varieties along with Sun World and Arra varieties."
"The innovation that these companies have brought to the table grape industry has dramatically altered retailers’ views and consumers’ expectations of grapes. I am hopeful that this merger will enhance and not impair continued innovation and development."
Carolina Cruz, President of Chilean industry association UVANOA, said: Although there is consensus in the group that the concentration of companies is not the best, we hope that this will have certain advantages in terms of standardizing the type of contracts and royalty payments, allowing to negotiate with a single voice and thus achieve greater rapprochement.
"Often, joining efforts can be positive in terms of financing for research and development, which is very necessary in the development of the industry."
Arturo Hoffman, Commercial Manager at Peru-based Don Ricardo, said: "I hope that the merger will bring better varieties in terms of production and quality offerings to the consumer, in a way that will help boost the category."