Close to a decade ago, Anthony Vineyards Inc. in Bakersfield, CA, had the opportunity to buy a certified organic vineyard in California's San Joaquin Valley.
"We bought it and then had to decide if we were going to continue it as an organic vineyard or switch it to conventional," said Sales Manager John Harley. After much debate, the firm decided to give organics a try and market the harvest as organic grapes. "We had some success with it with both our customer base and new customers," Mr. Harley said.
Eight years later, the company has added new acreage and converted some of its conventional acreage to the point that now about one-third of the firm's production is organic grapes. "We started in a small way, and we have had excellent growth in the organic category," he said. "In recent years, most of the growth in the organic category has come in our fall production. Right now - with one-third of our crop organic - we are at a very good mix."
Mr. Harley said that the firm's customers for the organic production continue to be a mix of conventional retailers with organic sections in their markets and specialty retailers that specialize in organic sales. "It is a very interesting deal," he said. "With the recession, we expected a dip in retail sales of organic grapes [because of the higher price], and we experienced a little bit of that last year. But this year interest is up."
Mr. Harley does not believe that is a sign that the recession is over but rather is a gauge of the commitment of consumers who buy organic product. "People who buy organic tend to stick with it. They are committed to it. We also are finding that younger consumers are committed to it."
The Anthony Vineyards sales manager believes this bodes well for the future of the category. "As the younger population enters the marketplace, they seem to be more concerned about what they eat. We are in an information age where the consumers have greater access to knowledge and they are using this knowledge to drive their purchases."
Mr. Harley was quick to add that he does not believe that conventional grapes are less healthy or less desirable than organic grapes, but some customers do follow that thinking. For those people, organic product is the answer and Anthony Vineyards is very happy to supply their needs. He said there is an f.o.b. and retail price difference between conventional and organic grapes that is justified. "The organic grapes don't hold up as well in storage, so their shelf life is shorter and the yields are lower. In addition, the certified organic materials that we use to produce the crop are more costly than conventional materials. We do have to get a premium. Some look at it philosophically and don't believe there should be a price difference, but if you take a business approach, you have to get more for organics because they cost you more per box."
The company's roots date back more than 80 years to when Anthony Bianco immigrated to the United States from Italy and operated a produce stand in New York City. He eventually moved his family, including his eight children, to Fresno, CA, where he started growing grapes. At that time, Mr. Bianco specialized in juice grapes, which were a staple of many of the immigrants from the old country living on the U.S. East Coast. Eventually, his sons took over the business and established Anthony Vineyards, expanding it exponentially and focusing on table grapes.
Mr. Harley said that in the mid-1990s, the family-owned grape-growing operation decided to vertically integrate and become a packer, shipper and marketer of its own production. The company has focused all its attention on California production and remains in the marketplace from the beginning of the Coachella, CA, deal in May through the end of the California storage deal in December.
"We've looked at the Mexican and Chilean deals, but it is hard to be a master of all things. We are focusing on domestic production and trying to be the best at that," he said. "And over the last seven or eight years, the onslaught of our organic production has consumed a great deal of our time."
He added that it takes a lot of work to grow, pack and market the domestic production the firm owns, and Anthony Vineyards has no intention of stretching itself thin by focusing its attention elsewhere.