Print This PageGrowing Opportunities
Seminis
Our 2005 acquisition of Seminis made us a leading player in the $3 billion annual market for fruit and vegetable seeds. We believe our rich germplasm library, combined with our breeding expertise, provides a platform for accelerated growth in vegetables similar to the competitive advantages that have driven our core crop businesses over the past few years.
We estimate approximately 100 million acres are currently planted in the vegetable crops Seminis sells, and that acreage is projected to remain relatively flat. With demand expected to increase 5 percent to 10 percent annually, yield is key. That is particularly true in Asia, where growing populations and rising incomes are driving demand for vegetables and sharpening the need for efficient land use.
We have taken steps to position Seminis for these expanding growth opportunities. We began by refocusing the company operationally, changing the business to be gross-profit driven rather than revenue-oriented and narrowing Seminis’ crop offerings to the 25 most profitable crops, including tomatoes and peppers.
Worldwide, those two crops are among the largest and most profitable in the vegetable seed industry. Sales of tomatoes reach approximately $500 million annually and pepper sales exceed $300 million. We already hold the number-one or two position globally in these high-value crops.
We are also targeting the most promising growth opportunities for this business by allocating more R&D dollars to priority targets in key crops — like tomatoes and peppers. And, we’re assembling the genetic maps and applying our marker technologies to unlock the value of these core vegetable families.
By providing superior seeds to growing markets, we believe that we’ll be able to pursue pricing strategies that reflect the value we’re delivering. Seminis breeders are using Monsanto’s breeding expertise and the breadth and depth of our industry-best germplasm library to improve yield, flavor, appearance, shelf life, and other characteristics. We believe the higher-value products delivered through our breeding pipeline will support price increases in our product portfolio.
One key area of focus is protected-culture environments like greenhouses. Protected environments deliver dramatic yield gains — from three-fold up to 15-fold compared with traditional open-field agriculture — with seed prices reflecting the value delivered. Breeding seeds for these applications are expected to be a major contributor to growth across the markets we serve.
