Over the course of the year, we pay tribute to 35 living Vanguards and 12 departed heroes. This month’s featured Vanguard is David Marguleas of Sun World International.
Originally printed in the November 2020 issue of Produce Business.
Sun World has at its helm David Marguleas, scion of the company founder (his father Howard Marguleas was an innovator in California’s agribusiness industry) and, even with his numerous board chairmanships, a quiet giant in the industry, who has virtually built the model that most of the global trade relies on in bringing better genetics to the world of produce.
More than that, Sun World created a sea change in the nature of the produce industry, and with Marguleas’ direction as CEO, is pushing a wave of future innovations. To that end, “We elected to divest our farming assets, our vineyards, our packinghouses and the commercial operations in May 2019,” says Marguleas, to focus resources on genetics, branding and licensing; with the split operations jointly working to boost the sale and profitability of crops the industry brings to market.
“Sun World transformed itself to squarely focus now on improving the quality, shelf life, availability and uniqueness of a number of fresh fruit species and crops,” he says, noting, “We have just completed construction of a brand new breeding facility in Central California that will hopefully be churning out new varieties of fresh fruit for the next 40 years, to build on the last 40-year legacy of the company.”
Sun World Innovations (now called Sun World after the divestiture) is the genetics, breeding and licensing arm of Sun World International. It was formed in 2015 to drive growth of fruit breeding, varietal development, licensing, agricultural technologies and international investments. It has a network of licensed partner growers and maintains international offices in Italy, Australia, Chile, Israel, and South Africa.
“My father started Sun World in the mid-70’s with a unique approach to be a full-service supplier of many hundreds of different types of fruits and vegetables and with a degree of vertical integration that was also uncommon,” says Marguleas, adding, “not only developing new varieties and funding the research, but also growing, packing and marketing many of those crops on its own to better control the quality and the supply of that product.
“If you flash forward about 10 years, it quickly became apparent that the volatility of the fresh produce industry from an oversupply perspective caused the principals to realize they did not want to play in the commodity game. That triggered the strategy of the next 30 years, a constant quest to differentiate ourselves, our product line and our packaging and promotional materials, but mainly the genetics and the proprietary nature of a lot of these products. This led to funding breeding work externally at universities and government programs and with private breeders. We invested in a company that created the seedless watermelon, and some seed technologies that developed colored sweet peppers which didn’t exist before; and a vine ripened tomato, which was new to the American consumer.”
In the late 1980’s the acquisition of another large vertically integrated produce company, Superior Farming, represented an important milestone, says Marguleas. The acquisition of Superior brought a culture of innovation and proprietary variety development in-house, and, at the time, the preeminent table grape and stone fruit breeding program in the world.
Marguleas joined the company in the mid-1980’s and was a part of these strategies, and, in particular, the branding of many of the proprietary produce, the sourcing of those products, and their introduction to the American retail community.
Fellow Vanguards, Dick Spezzano, who was at Vons back then, and Bob DiPiazza, during his tenure at Dominick’s, talk about how valuable it was to get these Sun World varieties in the produce department to differentiate their offerings and thrill consumers with clever merchandising displays and marketing promotions. “These two were real industry champions in the 1980’s, and they headed produce operations for iconic regional retailers that have since become part of larger national organizations,” says Marguleas. “We worked with them and many, many other regional retailers and a couple of national retailers in bringing new fresh fruit and vegetable varieties and brands to consumers.”
Marguleas recounts when the company realized there was an opportunity to share some of new products and intellectual property with other like-minded growers and fruit marketing companies in different parts of the world. “We developed a patent portfolio and a series of trademarks, and we started identifying growers with whom we would like to work with us in Europe and in South Africa, Australia and in South America and a few other countries.” Then Sun World began sharing those varieties with others and started sending plant material to various nurseries and growers around the world, and licensing other commercial companies to use its varietal brand, trademarks and intellectual property in the marketplace.
In general, the whole notion of developing proprietary varieties has injected tremendous enthusiasm and excitement at the retail level. It’s given retailers something to differentiate themselves with in the market place, a different angle by which to promote fresh fruits and vegetables, and then certainly enabled growers to differentiate themselves and to try to break free from the traditional commodity culture.
This explosion of new varieties generates new issues. For instance, today there are probably close to 100 new and old grape varieties in the marketplace. “Ultimately, the growers will make decisions about which varieties best suit their operations as well as supermarket retailers and consumers.” says Marguleas. “In addition, the challenge is to look into a crystal ball and try to foresee consumer tastes and preferences, and what the need for certain flavor profiles and characteristics in different cultures might be a decade or more from now.”
Marguleas’ wider industry commitment is clear. As last year’s chairman of the PMA, and current chair of the PMA Leadership Committee, Marguleas enjoined seven retiring directors, including himself, “to remain on the board for a special additional one-year term for continuity and strategic purposes, in light of the extraordinary impact and circumstances the coronavirus pandemic has had on PMA and our industry.” Marguleas continues, “I’d be remiss if I didn’t point out that a lot of the ideas, creativity and novel approaches to the business have been a function of the incredible exposure that I’ve had throughout the industry to some amazingly smart people, and a lot of that has been through industry involvement and affiliations. I’ve had the great fortune and honor of chairing a number of industry boards and serving on their boards of directors for many years, including the California Table Grape Commission and the California Fresh Fruit Association, in addition to the PMA.”
From an international perspective, Sun World’s investments and involvement in different countries has helped those produce communities move forward as well.