Since it’s founding in 1939, Hazera Genetics (www.hazera.co.il) has grown to become Israel’s largest breeder, manufacturer, and supplier of hybrid vegetable and field crop seeds. The company is at the forefront in applying innovative breeding technologies and molecular tools, including the use of genetic biomarkers to aid in the selection and tracking of desirable traits.
In recent years, Hazera has introduced a host of unique vegetable and fruit varieties, including the cherry tomato, which is a long shelf-life tomato, tomatoes with high lycopene content, many disease-resistant vegetable varieties, and most recently, mini seedless watermelons.
From both a research and business perspective, Hazera, which means the seed in Hebrew, has undergone considerable growth over the past decade. Most notably, research and new product development were previously conducted outside the company in various academic centers throughout Israel (primarily at Hebrew University in Jerusalem) and licensed to Hazera. In recent years, however, the company has brought its breeding activities in-house and developed substantial research capabilities.
In 2005, Hazera invested 12% of its budget on R&D activities with about 90% of that targeted to developing smart seeds, tailor-made to meet farmers’ specific needs. As a result, Hazera recently introduced a new tomato variety, called Tracie, which is resistant to Tomato Yellow Leaf Curl (TYLCV) virus and designed specifically for greenhouse breeding.
The TYLCV virus, which is spread by the white fly, has hampered tomato breeding in Israel for more than 20 years. No tomato variety has been resistant to it, and the damage caused by the virus has necessitated the breeding of tomatoes in hermetically closed greenhouses rather than in exposed outdoor fields. According to company officials, Tracie will allow Israeli farmers to breed tomatoes in open, ventilated greenhouses during the summer months, resulting in improved tomato quality and yield and reduced breeding costs. Hazera is promoting sales of the Tracie variety in other countries hard hit by the TYLCV epidemic, including Spain, Greece, and Mexico.
Global Market Growth
Since its modest origins as a supplier of field crop seeds to local Israeli farmers, Hazera has expanded to serve a global market, with export sales to more than 50 countries currently accounting for about 80% of Hazera’s revenues.
Hazera has established ongoing partnerships with several international seed technology and biotechnology companies, including KeyGene (www.keygene.com) and the National Institute for Agricultural Research in Paris.
Building its in-house R&D capabilities has been a critical component of Hazera’s expansion. It also continues to pursue breeding and research programs in cooperation with universities and research centers throughout Israel, including Hebrew University, Tel Aviv University, Bar-Ilan University, the University of Haifa, the Weizman Institute of Science, and The Agricultural Research Organization of Israel-Volcani Center.
In 2003, the French seed conglomerate Vilmorin Clause & Cie (VCC) purchased a controlling interest in Hazera and owned about 55% of the company’s stock, publicly traded on the Tel Aviv Stock Exchange. Seed Growers, a union of all the farmers in Israel, owned an additional 37% stake in the company. In April of this year, VCC acquired Seed Growers’ holdings and now owns 92% of the company.
Hazera, which operates as an independent business unit within VCC, benefits from its close alliances with the conglomerate, particularly in terms of access to technology. Over the past three years, as a result of informal knowledge exchange and collaborative research efforts with scientists at VCC’s sister companies and their global partners, Hazera has been able to implement various biotech tools, including the identification and use of genetic markers for trait selection to enhance product qualities, such as yield, nutritional benefit, growth characteristics, shelf-life, and disease and pest resistance.
Hazera’s sales and revenues document substantial growth in recent years. Corporate sales grew 6% to NIS 281.8 million ($62.4 million) in 2005 from 2004, and net profit soared 38% in 2005, totaling NIS 34.2 million ($7.6 million).
Building a Product Portfolio
Hazera’s leading product is the tomato seed, which accounts for more than 50% of total sales. The company markets about 100 tomato varieties, emphasizing attributes like vine ripening, firmness, and shelf-life that contribute to production efficiency, ease of transport, and customer appeal. These varieties include broad variations in size, shape, and color, from individual fruits to cluster vines, as well as standard cherry and grape tomato varieties, red, orange, yellow, and green tomatoes, varieties optimized for growth under controlled greenhouse conditions or in outdoor fields, and tomatoes bred specifically for qualities advantageous for processing into sauce and other products.
In the vegetable seeds sector, which was 87% of the company’s revenue in 2004, Hazera also markets hybrid seeds for cucumbers, eggplants, lettuce, melons, onions, peppers, squash, watermelons, beets, celery, parsnips, turnips, and radishes.
Hazera’s other big source of revenue is its field crop seeds business, which includes wheat, cotton, chickpea, groundnut, sweet corn, oat, vetch, clover, alfalfa, and sunflower.
Hybrid cotton represents a major focus area for the company, with market penetration expanding into the U.S., South America, Greece, and Turkey. Rami Dor, CEO of Hazera, describes the company’s ongoing effort to establish a new hybrid cotton product as an ambitious project.
The goal of the cotton project is to achieve a cross between an extra-long fiber variety, such as a Pima cotton that offers the advantage of high quality but low yield, with a lower quality but higher yielding variety, such as Acala. The resulting hybrid would combine the advantages of each and produce a crop plant that needs less irrigation and can thrive in soils with higher salt content. As with any new crop product, the benefits it offers farmers must outweigh the increased cost of hybrid seeds.
For the foods market, Hazera developed strains of sunflower seeds, designed especially for eating rather than for use in sunflower oil production. Ornamental flower seeds represent a relatively small component of the company’s overall business, with its offerings including seeds for flowering plants, such as ranunculus, hibiscus, and ornamental peppers.
Traditional pressures on vegetable and fruit seed producers include the need to develop new products that offer improved yield and quality, novel fruit shapes, sizes, and colors, and attractive cultivation, ripening, and shelf-life characteristics. Another driving force is the desire for eco-friendly plant varieties whose growth needs and characteristics minimize environmental impact, enabling them to grow and thrive with limited need for growth-promoting chemicals and pesticides.
Breeders of seeds for multinational distribution face the additional challenge of adapting plants to a variety of soil, climate, and irrigation conditions and to protect plants from infection and other sources of damage that may vary greatly from region to region.
Hazera maintains an ever-expanding gene bank, "which allows us to respond quickly to new pathogens" and evolving pathogen resistance, says Dar. Having a extensive and well-defined gene bank on which to draw for trait selection represents a valuable asset.
The use of genetic markers to enhance agricultural breeding programs is still a relatively young science but its potential implications are clear. Biomarkers "will speed up development and make breeding efforts more precise," says Dar.
While technological advances are accelerating new product development, once a new variety emerges from the laboratory, a challenge for breeders is simply the time it takes to establish, assess, and validate a new hybrid strain. It takes, on average, five to seven years to develop a new commercial plant variety. Parental lines can be cultivated only once a year during the plant’s growing season, while two generations of hybrids can be grown in greenhouses each year. The tedious work required to prevent self-pollination and to ensure that all the seeds produced are hybrids involves manual pollen collection.
Bioengineering is being used to create genetically modified organisms (GMOs) in the research laboratory. Although "GMOs won’t come to the vegetable industry for a long time," in Dar’s view, the ultimate emergence of genetically modified fruits and vegetables "is only a matter of time."
The ability to develop GMOs with improved nutritional properties, such as higher vitamin or antioxidant content, might appeal to consumers and help to override current concerns linked to the use of genetic engineering to produce seeds for food crops, notes Dar.
Companies need to build GMO research programs ready to apply the technology for commercial product development when the prevailing regulatory winds shift in favor of allowing GMO food crops. Hazera receives support for its GMO research programs from Israel’s Ministry of Industry. "The move to GMOs will require stronger IP and patents," Dar says. The need for patent protection will limit the competitive landscape to five or six major competitors, he predicts.
In addition to relying on patents and IP protection to ensure the security and identity of their parental lines and the uniqueness of their hybrid products, breeders are increasingly relying on sophisticated molecular genetic tools. By defining and documenting the genetic make-up of each line, seed producers are in essence generating a molecular fingerprint that they can use to identify and track each plant strain. Registries of molecular fingerprints will help breeders protect against theft.
By merging classical breeding techniques with the advanced tools emerging from molecular biology and phytopathology research, seed producers like Hazera are able to accelerate the breeding process and more efficiently produce hybrids with advantageous traits specifically tailored to meet the evolving needs of farmers in the global marketplace.