PICO has new direction

When Keith Carlson (center) was appointed CEO of PICO last summer, his family stepped in to run their Summerland orchard. Pictured with him are (from left) daughter Erin Carlson, wife Jan, daughter Claire Tamang, and son Marten Carlson.

The Okanagan Plant Improvement Company (PICO), a fruit variety management company based in British Columbia, Canada, has a new direction with a new chief executive officer at the helm.

PICO is refocusing on its mission to license new varieties developed by government and private breeders in Canada in a way that delivers the greatest possible benefits to Canadian growers.

Since its formation 20 years ago, PICO has licensed a long list of new cherry varieties bred at the Pacific Agri-Food Research Centre in Summerland, British Columbia, many of which have gained global status. It has also licensed a number of apple varieties that are now being produced internationally, including the privately owned chance seedling Ambrosia.

The B.C. Fruit Growers’ Association, which owns PICO, decided that the company needed to place more emphasis on ensuring that Canadian growers benefit from the program. It also decided that it needed a person with long industry experience and an intimate knowledge of PICO to implement the change.

The board terminated the contract of John Kingsmill, a former attorney who had been PICO’s CEO since 2006, and in July appointed Keith Carlson, a cherry and apple grower who had been chair of PICO’s board for the past six years, to succeed him. Carlson was given an initial 2-1/2-year contract.

“I think there was a partial feeling that we were paying a little bit too much for what was getting done,” Carlson told Good Fruit Grower. “Ultimately, PICO’s mandate is to help Canadian growers to introduce new varieties that benefit them in some manner, and I think it takes an industry person and industry perspective to understand the motives behind why PICO was formed. When we license internationally, it’s a matter of doing it in a way that benefits the Canadian growers to the maximum.”

Award of merit

Carlson grows about 40 acres of cherries and a few acres of the Ambrosia apple at his orchard in Summerland, B.C., and owns the cherry packing and shipping company Carcajou Fruit Company Limited. In addition, he sells bird netting and packing equipment. He has served on numerous industry committees and received the 2013 Award of Merit from the B.C. Fruit Growers’ Association for his contributions to the industry.

For Carlson and his family, this career switch came at an opportune time. His daughter Erin graduated from the University of Guelph in Ontario, Canada, two years ago with a bachelor’s degree in agriculture and has taken over management of the farm. His wife, Janice, is in charge of human resources, which involves hiring crews and doing safety training.

Canada first

PICO will continue to operate internationally, but Canadian growers will be more involved in deciding how varieties are introduced, and who will plant them and where, Carlson said.

PICO’s mandate is to put Canadian growers first, but that doesn’t necessarily mean they have first access to the varieties. It means that when PICO negotiates with potential license holders in other countries, the interests of the Canadian growers should come first. Generally, international licensees are allowed to produce only a limited volume of a variety and cannot sell the fruit in markets where they would compete with Canadian growers.

For example, Stemilt Growers, Inc., Wenatchee, Washington, holds an exclusive license for the Staccato cherry but cannot export it to Canada or Europe. Stemilt can only sell it in the United States and in export markets where Canada doesn’t have access.

Royalties

PICO collects the royalties on behalf of the variety owners, withholding a portion to fund its operations. It operates a budwood orchard to provide grafting wood to the industry and supports industry research and development projects in Canada. PICO contracts with a number of experienced growers to provide extension services to the industry to ensure that fruit is harvested at optimum quality.

Canadian growers pay only tree royalties, but international licensees might also have to pay an up-front signing fee, acreage fees, and per-box royalties, depending on what is negotiated between the two parties.

With apples, it takes a critical mass of production for a variety to be recognized in the marketplace, so that’s another way in which international partnerships can be beneficial to Canadian growers.

“We’re in the business of partnership,” said Carlson, who played hockey and baseball until recently and considers himself a team player in business as well. “Once we sign the license, we’re in partnership with the license holders, and the growers, and the packers for at least 20 years. It’s about maintaining that partnership, and friendship, and knowledge of everyone you’re in business with. That was not done very well in the past.”

For the first ten years or so of PICO’s existence, all the varieties were released on an open basis, with only tree royalties collected. When varieties began to be released under a managed system, with licensees paying additional fees for exclusive access, PICO was able to become self-sufficient. It has been a profitable company for the past eight years.

Carlson said the Summerland breeding program has many more varieties in the pipeline. Some will be licensed exclusively to a limited number of producers, while others will be available to all g growers.

Varieties might be introduced in a similar way to SweeTango, a managed variety from Minnesota. The management company established production rules and found growers willing to follow those rules to ensure the variety’s success.

PICO will no longer operate on a trial-and-error basis, he stressed. There’ll be more testing of varieties before they’re introduced, and the introductions will be more targeted, he said. Growers will no longer be told, “Go and plant this and let’s see if we can market it later.” •