Earthbound Farm to manufacture and market Pride of San Juan products

San Juan Bautista, CA-based Earthbound Farm has agreed to acquire San Juan Bautista neighbor Pride of San Juan's manufacturing operations in an effort to expand its reach in the foodservice market with specialty salads, herbs and edible flowers.

Pride of San Juan will retain its farming operations and will supply Earthbound Farm with volume to fulfill orders for the Pride of San Juan labels.

Effective April 3, Earthbound Farm will assume responsibility for managing PSJ's manufacturing and marketing operations. The transition to the new operation coincides with the resumption of full operations in San Juan Bautista in April, following the winter season in Yuma, AZ.

Stephen Wyrick, founder of PSJ, said the two companies have been "neighbors and respectful competitors" for quite some time.

"I've admired Earthbound Farm's tremendous success in manufacturing and marketing, and I can't imagine a better company to turn those functions over to, knowing my customers will continue to get the high-quality service they've grown accustomed to," Mr. Wyrick said. "This lets me refocus my energy on what my family has done so well for five generations: growing the best quality produce."

Doug Wyrick, who is in sales and marketing for PSJ, said that there are no plans as yet to do away with the "Pride of San Juan" label. As well, PSJ will continue to grow for private labels and may grow product destined for the "Earthbound Farm" label, he said. PSJ has a few organically grown products -- such as baby spinach and spring mix -- but the rest of its products are conventionally grown.

Doug Wyrick said that PSJ was not yet prepared to talk about the ramifications of the acquisition as relates to PSJ's popular "Emeril's" line, the partnership with renowned celebrity chef Emeril Lagasse, which includes prepackaged salads and other items. Earthbound President and Chief Executive Officer Drew Goodman said that there "are lots of parts of the deal that need further discussions" including the "Emeril's" line, but that he's "excited about the lines" associated with PSJ.

Doug Wyrick also said that except for employees working in the grower end of PSJ's operation, all PSJ employees will become employees of Earthbound. There are no layoffs planned, Mr. Wyrick said, adding that PSJ employees assimilated into Earthbound will have the advantage of all that is entailed in a payment/benefit package offered by a larger employer. He conceded, however, that it remains to be seen how well the synergies between the two companies work out regarding employment needs and specific positions. Any PSJ layoffs -- as yet unanticipated -- under a consolidation are more likely to occur on the manufacturing side as opposed to sales, marketing or administration, he said.

Mr. Goodman said that there is a "surprising amount of complementary" roles on the farming side of operations and that there "seems to be a spot for everyone" throughout overall operations.

PSJ customers should continue to contact their salespeople through normal channels, Mr. Wyrick said, adding that PSJ's focus is to assure that all PSJ customers in both retail and foodservice retain the same level of service as before.

With facilities about a mile apart, Earthbound plans to ship all foodservice orders for the combined business volume from the PSJ facility at 1275 San Justo Road, while shipping all retail orders out of Earthbound's facility at 1721 San Juan Highway.

"We are confident that having one facility dedicated to loading foodservice orders and another dedicated to loading retail orders will give us the opportunity to provide better, more efficient customer service for all of our customers," said Earthbound Farm Chief Operating Officer Charles Sweat.

Earthbound's San Juan Bautista facility has been expanded every year for the past eight years to accommodate the company's growth - from 25,000 square feet in 1998 to 203,500 square feet today, including 20 loading docks. Earthbound's desire to expand, combined with PSJ's close proximity, is a favorable circumstance. PSJ recently completed an extensive expansion of its San Juan Bautista facility, bringing the total square footage to 165,000 with 11 loading docks.

"To accommodate our rapid growth, we were planning to expand our San Juan Bautista facility once again this fall," Mr. Sweat said. "We anticipate that the addition of the Pride facility will satisfy Earthbound Farm's need for expanded production capacity for several years."

Earthbound was on track to exceed $400 million in sales in 2006, with about 30 percent in foodservice. As a result of this deal, Earthbound's revenue for 2006 is now projected to exceed $450 million. Though Earthbound is committed to organics, Mr. Goodman said, the company does sell conventionally grown items in bulk and conventional items at retail that are not under the "Earthbound Farm" label. Earthbound's conventional segment is greater in revenue that PSJ's entire operation, he said.

PSJ's organic segment is a "very small" portion of its overall production, Mr. Goodman said. Earthbound will need to further examine PSJ's organic land base, he said, noting that the addition of organic product from PSJ adds "geographic diversity" on the grower side of operations.

Mr. Goodman said that PSJ's dedication to supplying gourmet produce to the foodservice industry is an exciting expansion of Earthbound's offerings to foodservice. Like PSJ, Earthbound traces its early success to growing gourmet greens and culinary herbs for top chefs.

Mr. Goodman said that what PSJ has accomplished in foodservice is similar to what Earthbound has accomplished on the retail side of the business with organics: continued growth, new product innovation and overall success that have set the standards for the industry.

"There's great synergy here with tremendous capacity for innovation and growth," Mr. Goodman said.

The engine for Earthbound's remarkable growth -- a 45 percent compound annual growth rate between 1988 and 2005 - - has been its focus on organics, but it has always been a leading producer of specialty salads, primarily for foodservice customers, Mr. Goodman said.

Demand for organic food has seen strong growth in retail for several years, and the foodservice industry is just beginning to see a similar trend. In 2005, Earthbound enjoyed a 20 percent increase in sales of organic items to its foodservice customers, and the trend is continuing in 2006.

The alliance between Earthbound and PSJ will increase access for the combined foodservice customer base to reliable, year-round supplies of organic items, increase product offerings overall to foodservice customers, increase the geographic diversification of its acreage base and bring greenhouse production capabilities to its farming operations, Mr. Goodman said.

Launched in 1984, Earthbound Farm has more than 100 organic salads, fruits and vegetables that are farmed on nearly 26,000 certified-organic acres.

The Wyrick family - one of San Benito County's original farming families - has been farming since 1892.

Pride of San Juan was founded in 1995 and has become a leading producer of premium gourmet greens, herbs and edible flowers. PSJ has grown to be the largest conventional spring mix grower in the industry.

Melissa's launches new book of produce

Cases of Melissa's Great Book of Produce (John Wiley & Sons) began hitting bookstores in early March, but it is also being introduced in a place where not many books about food generally appear: in the produce departments of grocery stores across the country.

Subtitled Everything You Need to Know About Fresh Fruits & Vegetables, the book is the result of a collaboration by Cathy Thomas, who is shown as the book's author; Sharon and Joe Hernandez, owners of Melissa's; their daughter, Melissa, who is also the company's namesake; corporate chef Ida Rodriguez; and Robert Schueller, director of public relations for Melissa's.

"The book, which took two-and-a-half years to complete, demystifies the produce aisle," said Mr. Schueller. "It includes fruits and vegetables, both exotic and new varieties of familiar products, that readers and cooks alike want to know about."

The book arrived in mid-March at national Whole Foods Stores and at Dierbergs stores in the Midwest. It is scheduled to be at more than 500 retail grocers in the near future. The company also makes available a shipper display to hold the books, realizing that the majority of grocers do not have designated space for books.

The book fills a void that is an obvious need, especially for retailers that have an increased number of exotic and specialty produce items appearing in their produce departments.

One of the challenges the many new products present is in teaching consumers what the items are and how to use them. Melissa's, headquartered in Los Angeles, realized this dilemma many years ago and has since maintained one of the more ambitious marketing and promotional programs, much of it aimed directly toward consumers, to help keep them informed and updated on what new products are available and how to use them. The book does precisely this with 500 produce varieties included within its pages.

"Cathy Thomas is a family and business friend of Melissa's, and an award-winning food editor at the Orange County Register," said Mr. Schueller. "She has more than a decade of experience in food writing, and so when this opportunity came about, we felt that she would be the perfect person to write it."

Mr. Schueller is coordinating media, trade and consumer promotional events across the country to let the public and trade know about the book.

After much hard work, mango promotions now underway

In late February, a national retail chain ran a mango ad with the National Mango Promotion Board logo. That was the first fruit of the labors of the board's merchandising staff.

Veronica Kraushaar of VMS LLC in Scottsdale, AZ, which provides merchandising services for the board, said that five regional merchandisers have been blanketing their territories since the first of the year giving anyone who will listen a crash course in mangos. While many in the U.S. industry are well versed on what is called the "world's favorite fruit," Ms. Kraushaar said that research shows there is also quite a lack of information available to consumers and retailers.

"A survey we did shows that 70 percent of retailers would like to take advantage of a category management program," she said. This reveals that there is an information gap and that U.S. retailers are looking for it to be filled. The chains are looking for support and we are ready to offer it. We are pushing a customized program for the retailers. Whatever they need, we will help provide."

According to this longtime merchandiser, research shows that only 33 percent of U.S. households consume mangos. Ms. Kraushaar said that the percentage is of particular interest to the National Mango Promotion Board. In the first place, it represents a big increase from just a short time ago, when a similar survey revealed that only 23 percent of U.S. households were mango consumers. So even without promotion, the mango industry has seen a rapid rise in U.S. consumption. The board believes that most of that increase was fueled by the growing ethnicity of U.S. consumers. After all, mangos are popular among both Hispanic and Asian populations, two of the faster-growing demographics in the United States.

While 33 percent looks good compared to the 23 percent of a few years ago, Ms. Kraushaar said that it is far from the 90-plus percent penetration that mainstream items such as potatoes and tomatoes have in U.S. consumer households. That is why mango importers are excited about the potential for sales in the United States.

The 33 percent figure is also the main reason for the board's customized merchandising approach. Ms. Kraushaar said that some stores and some regions have a tremendous mango program, so they obviously need a different type of program than a retailer that is just beginning to introduce mangos to its customers. She said that some of the programs being established include in-store sampling, co-op advertising and special events to promote mangos.

Robin Lucky of VMS, the director of the mango board's merchandising effort, has five merchandisers across the United States. Ms. Kraushaar said that the annual merchandising effort has been broken down into three phases: winter, spring/summer and summer/fall. In each phase, the merchandisers will attempt to call on the major retailers in their respective areas as well as wholesalers and major foodservice operators.

"We are concentrating on the major retailers and working down from there," Ms. Kraushaar said.

The wholesaler is very important to the movement of mangos, as many retailers use the repacking service that wholesalers can provide. Reaching these wholesalers, however, is a daunting task, as there are many more of them around the country and many fly under the radar. Ms. Kraushaar said that there are only 30-40 major retailers in the country but probably well over 100 wholesalers that do a significant amount of mango business.

"As we go into new markets, we are discovering the major wholesalers in the deal," she said.

Newman's Own Organics hits the streets

CHICAGO -- Larger-than-life graphics of Newman's Own Organics hit the streets of Illinois, Indiana, Michigan and Wisconsin this month. The graphics cover the entire body of delivery trucks belonging to Goodness Greeness, a leading distributor of organic produce in the Midwest, and are the result of a distribution partnership between Goodness Greeness and Newman's Own Organics.

The development marks the first use of Newman's Own Organics graphics on a vehicle. Bob Scaman, president and chief executive officer of Chicago-based Goodness Greeness, designed the ad campaign to highlight the partnership between the two companies. The ad campaign uses Goodness Greeness delivery trucks as moving billboards. The white trucks serve as a fresh backdrop for the Newman's Own Organics artwork, which covers the entire body of the trucks.

"We continuously seek out products that contribute to well being and health," said Mr. Scaman. "The high level of recognition of the Newman family name is a great way to raise the general level of awareness of organic products."

Goodness Greeness has been dedicated to bringing the freshest organic produce to consumers in the Midwest since its founding in 1991. Newman's Own Organics was established as a division of Newman's Own in 1993, and became a separate company in late 2001. Headed by Paul Newman's daughter, Nell Newman, the company develops products from certified organic ingredients. All products are certified organic by Quality Assurance International.

"We are so happy to partner with Goodness Greeness to bring these great organic products to midwestern consumers," said Ms. Newman. "Goodness Greeness adheres to the highest standards of quality and has one of the best cold-chain management systems in place. We know that our produce is always going to arrive on the grocers' shelves as fresh and beautiful as when it came out of the field."

Newman's Own offers organic food products with wide consumer appeal. "We feel that people want to know more about the food they eat, not just how much fat or cholesterol a product contains," said Ms. Newman. "How ingredients are grown and processed on the way to their grocers' shelf is becoming more important to today's consumer. Once people see how much organic foods have improved since the early days of packaged 'health' foods, we hope they'll try other organic food products."

California asparagus season delayed by cold, wet weather

As of early February, it was looking as though the California asparagus season might get underway earlier than ever due to mild winter weather. But wet and exceptionally cool weather from late February through early March has delayed the crop, making it later than usual rather than earlier. It may also be lighter than normal in volume throughout the season (which typically runs through May), according to some sources.

The California Asparagus Commission, however, projects a total volume for the season of 75 million to 80 million pounds, which would be very similar to last year, according to Cherie Watte, the commission's executive director.

Once the weather warms up and dries out, Ms. Watte expects to see good production out of the Stockton, Salinas and central California districts.

The most exciting new development for the California asparagus industry is the release of a new asparagus variety that is expected to have improved characteristics over the dominant variety currently being grown.

The UC157 variety, which has for many years been the dominant variety in commercial production, "has performed admirably well," said Tom Tjerandsen of McClure & Tjerandsen, a San Francisco-based advertising and public relations agency representing the California Asparagus Commission. "From what everybody can determine" based on the early tests for the new variety, "it is going to be a barn burner."

Over the past 10 years, the commission has been investing "right around $70,000 a year into varietal research and basic research projects" with the primary goal of developing a new asparagus variety "that is a much more marketable commodity" and that will keep California at "the cutting edge of the quality standard," said Ms. Watte. Out of that research has come the new UC115 variety, which "is a relative of 157 but improves upon the positive marketing qualities of 157 by producing a longer green spear with a tighter tip."

The new variety has been given the trademarked name of DePaoli, she said. That name honors Ms. Watte's predecessor at the commission, Bill DePaoli, who was executive director of the commission from its founding around 1990 until his death in July 1999 and who headed the commission's voluntary precursor organization, the Asparagus Growers Association, for about 20 years prior to that.

The UC157, "the current variety that we all grow," is dominant not only in California but also in Mexico and it "works well in Peru and China. It is produced everywhere," Ms. Watte said. "We wanted to produce a new standard that would set California apart, something that we would have exclusive production rights for at least a period of time."

The DePaoli was "just released last month," she said. It is not in commercial production yet, and "it will be three years before we see any commercial production of this new variety." The seeds planted this year will produce seedlings for transplant next year that will begin to produce spears the following year.

Grower Steve Couture of Couture Farms in Kettleman City, CA, said that only 40-50 pounds of the seed have been produced to date. While that will all be planted this spring, "it is going to take several years" before there will be commercial production of the variety.

While the variety shows promise, "all we know at this point is the results of the trials," he said. "It will be watched for its vigor next spring," then there will be "a very small harvest in 2008."

Among the expected improvements in the DePaoli is improved yields. Trials have shown it to be "a heavier producer than the 157," Mr. Couture said.

Another advantage to growers, according to Ms. Watte, is that since the DePaoli grows a longer green spear with a tighter head, the tip does not feather out or fern out as quickly in the field. That may allow farmers "a little extra time" to harvest the crop. Harvesting crews may only need to go through the field every 36 hours instead of every 24 hours, she said.

The variety appears also to produce a more consistently sized spear, she added. But "as a consumer, to me the most attractive characteristic is that it gives me more useable product," as it can be cut to a nine-inch spear, or even longer, that is all green. There is no white butt to be trimmed off and discarded.

As for the current year's crop, Ms. Watte said, "we don't expect to have any major shortcomings in our season. We expect to be up and going and fully functioning very soon, and for sure by the end of March," with steady production throughout April and May. "By the end of the year, we should see a pretty stable volume," which will be down from what the state was producing five years ago but very similar to a year ago.

California has five distinct production regions, four of which are within the scope of the California Asparagus Commission, she said. The largest acreage is in the Delta region -- San Joaquin, Sacramento and Contra Costa counties -- with around 17,000 acres in production. Next is Salinas and the northern coast -- Monterey and San Benito counties -- with around 6,000 acres in production. The central San Joaquin Valley has about 2,500 acres, and the Santa Barbara-Santa Maria area has around 500 acres. The Imperial Valley, which is not part of the commission, also has around 500 acres, she said.

The commission "has had some very successful [promotion and public relations] programs over the last couple of years," partnering with other commodity groups in order to multiply the impact of the growers' limited money, Ms. Watte said. Production so far this year "has been marked by some early production in central California and the Delta area that was interrupted by freeze events and rain events in late February and now in early March. So the actual commencement of a full-fledged, gang-buster harvest has yet to start. We are waiting for it to dry out a little bit before we begin a non-stop harvest. We thought we'd have an early season," but that expectation has changed, she said.

Production from Mexico has been "successfully filling the pipeline that California would have filled if they had been able to ship," although it has been "quite a strain for them to do so" as they approach the end of their season, said Mr. Tjerandsen.

Woody Johnson of Growers Express in Salinas, CA, which handles asparagus from growers in Mexico and in Stockton, CA (the Delta area), said in mid-March, "We are getting close to winding down in Mexico and probably have maybe another good month or so out of there." Stockton will get going in time to "take over in April and May," he said. But he expects light production throughout the season. "I don't think there will be a gap," he said. "It is just going to be a much lighter deal than it was last year," just as there has been lighter volume out of Mexico throughout the season there. "That translates into a little higher pricing," he said.

Mr. Couture concurred. "I think supplies will stay very tight this whole spring California asparagus deal," he said.

Although Couture Farms started harvesting asparagus in early February this year, "We have had a terribly difficult time getting started. The weather has been very hard on us," said Mr. Couture.

But asparagus is more forgiving than some other crops, such as cherries, where a single rain event at bloom time can wipe out a crop. With asparagus, all it takes is a day or two of warm, dry weather between storms for some shoots to emerge.

Even through the rainy period, Couture Farms has been able to get into its fields a couple of days a week and do some harvesting, however light.

Couture Farms is optimistic about the future of the asparagus business, Mr. Couture said. That optimism is demonstrated in the fact that "we are planting another 80 acres" this year. "Asparagus is a good business," he said. "I feel that there is never enough asparagus for Easter for all the people who would like to feature it at that time," and that will certainly be true this year, Mr. Couture continued. "We will have a very small window ahead of Easter where there would be any chance to accumulate any supplies for that big pull."

He expects that the best time for promotions this year will be the end of April and early May. "We should already be thinking about setting up those Mother's Day ads," he said.