FEATURE-Seminis Monsanto-tie fuels "super vegetables"
Sun May 21, 2006 12:00 PM ET
By Carey Gillam
KANSAS CITY, Mo., May 21 (Reuters) - At Seminis Inc., the world's largest fruit and vegetable seed company, carrots come in a rainbow of colors and flavors, lettuce grows perfectly sandwich-sized, and a menu of "super vegetables" such as cancer-fighting broccoli are in development.
A growing demand for healthier and tastier foods is driving this effort to remake many of the world's common consumption crops, industry experts say. And it is pushing Seminis -- fortified by Monsanto, the biggest player in farm biotech -- to use a range of plant breeding innovations as it vies with competitors for coveted market share and grocery shelf space around the globe.
"We're seeing a total revolution. We now have a much wider range of products, which are designed with the end-user, the consumer, in mind," said Verdant Partners LLC. consultant Rod Stacey, who specializes in global seed industry issues.
Oxnard, Calif.-based Seminis is the industry leader in the $2.4 billion vegetable seed trade, garnering revenues of $565 million last year, marketing seeds for specialized sweet yellow peppers, hybrid spinach, "Bambino" personal-sized, seedless watermelons and other foods that are part of Seminis' collection of more than 3,000 seed varieties.
Seminis said it controls 34 percent of the North American vegetable seed market, and supplies 23 percent of the world tomato seed market and 34 percent of the hot pepper seed market.
The company was founded by a group of Mexican businessmen in 1994 and grew through a series of mergers. But amid competition with Switzerland-based Syngenta Seeds, Groupe Limagrain's Paris-based Vilmorin Clause & Cie, Germany-based Bayer CropScience and others, Seminis stumbled over inventory management, product marketing and other issues, leaving itself on shaky financial ground.
That changed a year ago when agricultural technology giant Monsanto Co. (MON.N: Quote, Profile, Research) of St. Louis, Missouri, bought Seminis for $1.4 billion in cash and assumed debt. Now, with $5 billion-asset Monsanto muscle backing it, Seminis is emerging as a more powerful player in the evolution of how the world eats.
"The company has changed focus and gotten better," said seed industry consultant Tim Tryon. "They were going down the wrong path fast. But oversight now is looking real good. "
SPEEDIER SEED BREEDING
Under Monsanto's umbrella, Seminis is employing its molecular breeding technology to speed the roll-out of seeds designed with characteristics for higher yields, improved quality and enhanced disease resistance. Onions, carrots, tomatoes, all can be had in varying colors, tastes and textures.
For consumers, the company also is also focused on new varieties of broccoli that have three times as many cancer-fighting compounds than regular broccoli, tomatoes with enhanced levels antioxidant levels, and other offerings the company calls "super vegetables" with enhanced flavor as well as nutrition.
The company is also revising its marketing strategies for products like lettuce grown firm and folded so its leaves can be used instead of bread to hold sandwich fillings.
The changes afoot also come as many Monsanto veterans take over the top jobs at Seminis. Kerry Preete, former vice president of Monsanto crop production has taken over as CEO and Monsanto executives hold top jobs in finance, strategy, marketing, research and development.
"We feel we have a great mix of people now... to get the best of both worlds," Preete said in a recent interview.
The first year under Monsanto's ownership was clouded by disappointing results in Europe, which Preete said were due in part to weather-related problems, and soft tomato prices.
But Preete said Seminis was on track to contribute 20 cents a share to Monsanto's bottom line for fiscal 2006 and was positioned for "significant growth."
"We're focused on both ends of the chain, the grower level and the consumer-level," said Preete. "We're building platforms around enhanced nutrition, color and texture."
ORGANIC FEARS
The marriage of Monsanto's technology and Seminis' market reach has sparked concern in some industry sectors, particularly for organic goods' purveyors, who eschew anything genetically modified, a Monsanto specialty.
They say Monsanto's market dominance in row crops like corn and soybeans and its push to patent genetic modifications has trapped farmers in a web of high prices and limited seed options and they fear the same will happen to them.
Some organic seed companies have stopped doing business entirely with Seminis because of its tie to Monsanto, said Tony Kleese executive director of the Carolina Farm Stewardship Association.
"If Monsanto and their partners buy up all the seeds and patent them and genetically modify them, we're in trouble," said Kleese. "Then we can't have any organic seeds."
American Seed Trade Association chief executive Andy LaVigne said that despite the fears of some niche players, the industry changes were beneficial to growers and consumers.
"They want, they demand, improved products," said LaVigne. "It is an evolution in the industry."
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