August 18, 2021

A Quick Glance At Investing Pears

by Sara Wensley

Director, Growth and Marketing

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A Quick Glance At Investing Pears
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In modern day US agriculture, pears are an important commercial crop grown in at least six states, and just like their close cousins - apples - represent a compelling investment case for anyone looking to deploy capital into farmland.

Like many of their tree fruit relatives, pears are much more than just a cash crop. Humans have been cultivating and enjoying these sweet, juicy fruits for over two thousand years, and their origin story and cultural significance span the entire globe. Pears today are grown commercially on five continents and have a special place in many culinary traditions. Though a group of about 10-20 varieties hold most of pears’ commercial significance, there are more than 3,000 varieties known to humans across the world; some of these non-commercial varieties still exist and play an important role in our culture today. In fact, the Endicott Pear Tree in Danvers, Massachusetts is widely known for being perhaps the oldest living cultivated fruit tree in North America at nearly 380 years old, and is protected as a US National Landmark.

In modern day US agriculture, pears are an important commercial crop grown in at least six states, and just like their close cousins - apples - represent a compelling investment case for anyone looking to deploy capital into farmland. To get to know them better, let’s take a deep dive into their history, diversity, and evolution as a crop.

Ecological Origins: From Europe and North Asia to the Americas

Pears belong to “Rose” family (Rosaceae) and are part of a loose sub-group of tree fruit known as “pome” fruits based on the sub-family pomoideae, which also includes apples as well as various other lesser-known tree fruit such as quince and nashi - also known as the Asian pear. The pears that we know today mostly belong to the species Pyrus communis, also known as the European pear or the “common pear”. Asian pears are a different species in the same genus, Pyrus pyrifolia, and are grown sparingly in the US but are commonly found in US grocery stores and are an important ingredient in several Asian cuisines.

Both of these Pyrus species are of a different genus than apples (most apple varieties are a cultivar of the species Malus sieversii), but these fruits all have lots in common, including their original region of ecological origin as well as their reproductive characteristics, expansive genetic diversity, and modern-day farming styles.

Pyrus communis pears originated in eastern Europe and northern Asia, and were first domesticated and cultivated by farmers around the beginning of the Common Era. Some of the earliest historical records alluding to pears in human food and beverages are from Greek and Roman authors, who describe pears’ uses in food as well as a fermented beverage that would later be called “Perry”, similar to cider or wine. Selective breeding and further cultivation eventually led both to pears’ more mainstream acceptance in food, as well as to their geographic expansion throughout Europe. By the turn of the first millennium C.E., pears were widely grown in France and the Low Countries, whose influence on pear production remains strong to this day. In fact, the widely-popular D’Anjou pear variety originated in Belgium and is named for the Anjou region in France.

Pears made their way to the British Isles around the time of the Norman conquest of England in 1066, and their cultivation quickly expanded across Great Britain. Once trans-Atlantic mercantile exchange began with the English colonization of North America, pears and many other crops eventually made their way to the modern-day US.

Notably, one variety that Great Britain ultimately exported to the US was what we in the US now refer to as the Bartlett pear. Bartletts were originally called the Williams pear, and in fact still go primarily by this name outside of North America. Discovered by an English schoolmaster in 1765, a nurseryman with the surname Williams later acquired the variety and began cultivating it for sale around the UK and its then-colonies. These pears were first planted in the US around the turn of the 19th century on an estate in Roxbury, MA which was later acquired by Enoch Bartlett, who is credited with commercializing this variety in the US bearing his own name.

Bartletts today are the #1 pear variety grown globally and account for roughly 75% of US Pear production, and are a consumer staple loved for their juicy flesh and sweet flavor. Both Bartlett pears and D’Anjou pears come in several different colors, and together with about 6-8 other varieties they make up almost all of commercial production in the US.

That being said, pears are similar to apples in that thousands of varieties exist beyond this leading commercial bunch, and the significance of pears’ inherently diverse heritage impacts both their production and breeding, and as we’ll explore more below, their uses in food and beverages.

Building, Maintaining, and Improving Pear Orchards

Like their apple cousins, one of the most unique aspects of pear production is the necessity of the use of grafting, the practice of growing trees from two main parts: A ‘rootstock’ of one variety and a ‘scion’ or young vegetative cutting of another.

Many farmers who manage fruit and nut orchards and even vineyards often utilize grafting as a means of fortifying their crops’ resistance to pests, disease, and extreme weather. The role of the rootstock in this aspect of production is critical - rootstock varieties are chosen for their hereditary ability to resist infection, quell pest pressure, and respond well to extreme weather, especially to droughts and floods. The varieties that taste best, yield best, or mature and ripen at the right times of year are then implanted as scions into these hardier rootstocks, enabling the farmer to get the best of both worlds in terms of quality and hardiness in one tree once it matures.

With pears, however, grafting is actually done out of necessity for an entirely different reason. Pear trees, like apples, reproduce via cross-pollination from another tree, and are often self-infertile, meaning that trees from another variety are required for reproduction to occur at all. Ultimately, this means that if you raise a pear tree from seed, the fruit that the mature tree produces will not taste the same as the tree that the seed originated from. Even if you start with a well-known commercial variety like Bartlett, D’Anjou or Bosc, the fruit that results could end up tasting bitter and even inedible. The pear varieties that we know best are therefore carefully maintained through grafting in nurseries, and the establishment of a pear orchard relies on careful selection of the varieties used both as the rootstock and as the scion, which will ultimately mature into the tree that produces fruit.

Interestingly, these reproductive characteristics are also what make the genetic makeup of the Pyrus genus so incredibly diverse, and although very few of the thousands of varieties that exist are commercially grown, the background genetic diversity that defines pears as a crop is invaluable to their preservation. Pears are an important crop in the USDA’s National Plant Germplasm System, which serves as a “library” of sorts for plant breeding researchers. Breeders and geneticists can search for traits that encourage hardiness or accentuate flavor in new and existing pear varieties, and in turn can bring new varieties to market to delight consumers while also setting growers up for success in a future defined by the evolving climate emergency and the challenges of pest and disease pressure.

Modern-day Pear Production in the US

Today, pears are a significant commercial crop in at least six US states: Washington, Oregon, California, Michigan, New York, and Pennsylvania. The production of pears has coalesced in these states given their climates’ unique suitability for pears, which need both lots of sunlight during the summer months as well as mild summer temperatures and a long winter chill, with some pear varieties requiring as much as 1,500 “chill hours” (below 45 °F) in order to produce a substantial fruit-set the following year.

With their uniquely suitable climates and well-drained, loamy soils, the west coast states lead the way in US pear production. Washington and Oregon combine to account for up to 80% of US pear production, and both consist of several significant growing regions with long and well-established histories. Both European and Asian pear varieties are grown in these states, with the European varieties like Bartlett D’Anjou most concentrated in the cooler eastern regions of both states.

These eastern growing regions are also exemplary of modern planting techniques: The last 10-20 years of new establishments of orchards have largely used high-density planting techniques, in which trees are planted closely together in rows and “trained” up a trellis system as they grow and mature. This allows sunlight to penetrate more evenly throughout the whole height of each tree, and also simplifies the pruning - removal of excess vegetative growth to focus the tree’s energy on fruit production from existing branches - involved in the orchard’s maintenance. If implemented well, this style of orchard management can produce significantly higher yields than traditional planting methods.

Eastern Washington and Oregon have been as successful as any growing regions in the world at implementing these innovations, thanks to excellent research and extension institutions such as Washington State University and Oregon State University. These institutions, along with other universities and the USDA, have been instrumental beyond innovations in planting style as well. They have been intimately involved in developing new varieties and continuing to improve existing varieties’ resistance to crop threats like fire blight and other diseases or insect pests. Oregon State’s genebank in Corvallis, in fact, is the epicenter of pear germplasm preservation on the west coast of the US and is a central part of the USDA’s National Plant Germplasm System.

Pears’ Potential: Growth in Organics, Alternative Uses, and Renewed Consumer Demand

Pears have long been a staple among US consumers, both as a fresh snack or to include in salads or other fresh dishes, as well as a great fruit for baking or even grilling. Americans’ reverence for pears is perhaps best underscored by the story of the company Harry and David, who in the 1930’s turned their Royal Rivera® variety into a holiday gift. The popularity of pears among foodies and gift givers alike has persisted to this day, and projects to continue growing thanks to a number of promising trends.

Pears are positioned well to take advantage of the exemplary growth in the organic produce market seen in the US over the last decade. US organic produce sales exceeded $60B in 2020, having grown at almost 10% per year since 2008, and is expected to reach $70B by 2025. The organic share of the overall pear market has done particularly well in the last year, having increased by 34% between February 2020 and February 2021 to represent 14% of all pear sales. Matching this demand, Certified Organic pear acreage in Washington nearly tripled between 2014 and 2019, and is continuing its growth in support of the surge in the organic segment of the pear market.

Simultaneously, another craft use of pears that dates back centuries may be making a remarkable comeback. Perry, the same pear-based beverage that the ancient Greeks and Romans wrote about and revered, has reappeared in the US and Europe as an alternative to craft cider made from specialty heirloom varieties of pears. This reinvention of Perry as a modern craft beverage along with the recent surge in interest in both newly-bred and heirloom apple varieties may foretell a similar revival in popular interest in heirloom pears.

Investing in Pears and Other Tree Fruit

All of the above reasons - growth in the market, innovations in breeding and agronomy research, and pears’ rich history, diverse genetic makeup, and long-standing consumer reverence - make pears an excellent target crop for anyone looking to deploy capital into agriculture.

FarmTogether’s vision is to ensure peace and plenty by investing in the sustainable agriculture revolution. To achieve this vision, we are on a mission to bring creative and transformative capital to farming while opening up the vital farmland asset class to all investors.

We feature opportunities to invest in tree fruit properties on our platform on a regular basis and are excited to share these opportunities and our vision for agriculture with our investors.

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Disclaimer: FarmTogether is not a registered broker-dealer, investment adviser or investment manager. FarmTogether does not provide tax, legal or investment advice. This material has been prepared for informational and educational purposes only. You should consult your own tax, legal and investment advisors before engaging in any transaction.

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