David Marguleas is ticked off. His company grows and ships millions of boxes of what he claims are America's best tomatoes, a variety called DiVine Ripe. Trouble is, a couple of genetically engineered competitors still not on the market are hogging publicity on the return of tasty tomatoes to supermarkets. "It took 12 years to develop this tomato, but all the attention is going to the science that's supposed to produce the same characteristics," says Marguleas, senior vice-president for marketing for Sun World International Inc. in Bakersfield, Calif.
Those qualities are full color and flavor, firmness, and a shelf life that lets the tomato be shipped cross-country without rotting. Calgene Inc. and DNA Plant Technology Corp. make similar claims for their gene-altered tomatoes. But they're waiting for Food & Drug Administration approval before launching them into the $3.5 billion American market. Sun World, by contrast, has sold its tomatoes since 1990--having created them with 100-year-old cross-breeding and selection techniques.
EDIBLE FOODS. Sun World is the brainchild of Marguleas' father, Chairman Howard P., who quit as president of Tenneco Inc.'s farming operations in 1975. His new company's mission, he says, "was to differentiate ourselves with flavor, attractiveness, and seasonality"--and thus sell only high-margin produce. His weapon would be patented varieties that were bought, licensed exclusively, or developed internally. Now, 60% of what Sun World grows are exclusive varieties. Most growers, by contrast, rely on public-domain products developed by universities and the Agriculture Dept.
Marguleas' strategy has produced a fast-growing, $300 million operation that has triggered changes in the $40 billion produce industry far beyond those the company's size should warrant. In 1983, Sun World introduced Le Rouge Royale, the first mild, elongated, sweet red pepper. In 1988, it launched the country's first seedless watermelon, developed more than 50 years earlier but never commercialized. That spawned a host of imitators--right down to the label, which notes that the melon's white seed pods are edible.
Privately held Sun World's next coup came on Sept. 20, when it started shipping a mango that ripens in late September and October, just after the huge Mexican crop and before South America's November harvest. The new mango is already fetching four times the price of mangoes in season. Next year, a baseball-size apricot will make its debut, and Sun World will test a seedless black grape. In all, the company owns 45 patented varieties and has introduced more new fruits and vegetables than any company ever, David Marguleas claims.
That may be hard to substantiate. But "they're renowned within the industry as a leader in developing new varieties to fill market niches," says Bryan Silbermann, executive vice-president of the Produce Marketing Assn. Adds Kenneth W. Green, corporate vice-president for produce at the 1,200-store Great Atlantic & Pacific Tea Co.: "They've stepped away from the crowd, selling things others just don't have."
In a sense, Sun World is the model for both Calgene and DNA Plant Technology (DNAP). Both have contracted with key growers and will market their products directly to food stores. In addition to genetic engineering, DNAP uses accelerated breeding techniques and has commercialized 18 products. "We all have the same strategy--to bring unique products to the supermarket," says Robert Serenbetz, DNAP's president. "But everyone forgets that Sun World was the pioneer, because they don't use the sexy genetic-engineering approach."
That may be just as well. Environmental activists who oppose using biotechnology on food have whipped up such a backlash that 1,500 chefs have publicly sworn off the use of "unnatural" genetically engineered foods. And on Aug. 4, Chicago passed an ordinance requiring retail establishments to post signs identifying any genetically engineered foods.
Biotech, ironically, isn't all that unnatural. Calgene inserts a gene that's the mirror image of one that produces the enzyme polygalacturonase, or PG, which causes tomatoes to soften. This so-called "antisense" gene turns off the production of PG. DNAP inserts a gene to halt the production of ethylene, a gas produced by tomatoes that turns on the genes that ripen and eventually rot the vegetable. Most U.S. tomatoes now are picked green, then sprayed with ethylene at their destination to turn them red. Both companies figure that if they slow the ripening process, tomatoes can be left on the vine longer to develop flavor, yet still be firm enough at harvesting to withstand long shipments.
CROSSBREEDING. Sun World's DiVine Ripe came from researchers at Hebrew University's agriculture campus south of Tel Aviv, who were trying to cross a natural tomato that never ripens with a firm, deeply colored one, to get a long-shelf-life variety. In 1983, Marguleas and other investors set up LSL Biotechnologies Inc. in San Diego, to acquire worldwide rights for the tomato. LSL adapted it to U.S. growing conditions and licensed it to Sun World exclusively.
"It revitalized the vine-ripened tomato," says Robert Meyer, who owns Meyer Tomatoes in King City, Calif., one of the largest U.S. producers and a grower of both Calgene and DNAP versions. By contrast, he adds, the Calgene tomatoes on his vines are "average." The problem, says David W. Cain, Sun World's vice-president for R&D, is that a number of a tomato's desirable characteristics, such as size, firmness, color, and yield, are controlled by many genes. "Only traditional breeding methods can manipulate hundreds of genes at a time," he says. Stephen Benoit, a vice-president at Calgene, says it used conventional techniques to develop its tomato. But, he says, biotech was the only way to manipulate the target gene, which had resisted attempts by other methods. He also insists that the Calgene tomato is testing well with consumers.
Sun World is sticking with breeding, even if it takes time. Its mango took 10 years to adapt to the irrigated desert of California's Coachella Valley, where it's grown. That points up another Sun World weapon: location. Fruits that are raised in the desert out of season can be unique even if they aren't new breeds. That may be a lesson for biotech startups: Don't forget the basics of agriculture.