your-news image

The Nunes Co. — Built to last

TNunesFam_color_final
Bob Nunes, Jim Nunes, David Nunes, Tom Nunes Sr., Tom Nunes Jr., Tom Nunes III and Bob Nunes Jr., three generations of the Nunes family.

Clearly, Tom and Bob Nunes are enjoying the fruits of their hard work and are proud of what they have accomplished.

The two brothers began their farming careers in the Salinas Valley about 60 years ago, developed two very successful namesake companies and have helped guide the second and now third generation of their family as they take over the reins of The Nunes Co. They are innovators in a valley known for innovation.

Nunes-Heritage-01
Tom Nunes Jr. and Bob Nunes in their teenage years in the 1950s in California’s Salinas Valley.

While they grew up in a farming family in Chualar, CA, about 10 miles south of Salinas, CA, and their path to a career in the fresh produce industry was a fairly straight line, it was not as preordained as one might think.

Neither man had a particular love for farming as a child, and, in fact, both figured they would do something else for a living. Both graduated from high school in the 1940s and headed to Stanford University to pursue higher education and to make their mark in the world. Tom, who is three years older and is currently 83, wanted to be an architect. Bob majored in economics and figured he would be a doctor or a lawyer.

Independently, both men remember sitting on a tractor at separate times in their early working years and consciously deciding not to go into the farming business as a career. But they are part of that group of men and women raised during the Great Depression who spent the rest of their lives doing what had to be done. “It was different then than it is now,” said Bob. “People got married at a much younger age. I got married while I was still in college, and so when I got out, I had to make a living.” He became a vegetable inspector.

Tom had a similar experience a few years earlier. He got married right after he graduated, and then the next year he had his first son, Tom Jr. “I had to earn a living, so I immediately went to work for my father driving a tractor. Every night, I’d look at the paper for something else to do.”

During a 90-minute conversation with the brothers, it is obvious to this day that they might have been just as happy and successful pursuing careers in different professions. But the produce industry is very lucky that the two men found their niche — if not their love — working the dirt and producing and marketing vegetables.

The Nunes family story begins with Tom and Bob’s parents, who brought the family to the Salinas Valley. Their father, known as Tom Sr., or T2 in the family parlance, settled in Chualar farming an array of vegetable crops. Both of his sons worked on the firm throughout their high school and college years. Plowing and planting the fields and harvesting the crops were second nature, but not a particularly fun job. Still, when Tom Sr. offered Tom Jr. a job on the family ranch after college, he accepted.

He stayed there several years before starting his own grower-shipper organization with several other partners, which they called Growers Exchange Inc. Tom, who learned the art of farming from his father, handled production. Growers Exchange got off the ground and enjoyed a modicum of success through the mid-1950s.

Meanwhile, after Bob left his job as a county inspector, he joined a Salinas grower-shipper as its bookkeeper. He called that education “invaluable,” but sooner rather than later, he found still another job with Los Angeles-based Kavanaugh Distributing Co. He stayed with that firm for four years, starting as a bird dog and working his way up to a sales position. By 1959, Bob knew the lettuce industry pretty well and was starting to formulate his own ideas as to how one could be successful and rise above the crowd.

nun6
Tom Nunes Jr., Bob Nunes and their father, Tom Nunes Sr., on their porch in Chualar, CA, in the early 1930s.

It was at that time that the person who handled sales for Growers Exchange retired, and Bob was given the opportunity to buy into the firm and handle the sales and marketing. Thus began the beginning of the Nunes brothers partnering in the produce industry. They have remained together in one organization or another for the past 52 years.

Bob, who has written a semi-autobiographical book on his produce industry career and the establishment of the “Foxy” brand, said that it was during the seven years that he and his brother were together at Growers Exchange that he yearned to have his own company and his own brand. He believed innovative marketing was the key to success.

In 1966, Tom and Bob founded Nunes Bros. of California Inc., an integrated grower-shipper of vegetables. And almost just as quickly, the company began experimenting with some cutting-edge marketing ideas aimed at the consumer. That first year, Nunes Bros. launched a joint promotion with Lawry’s Seasoned Salt. The wrapper from a head of Nunes Bros. lettuce offered consumers 25 cents off any Lawry product with the lettuce purchase. Lawry paid for consumer advertising while Nunes promoted the concept in industry publications.

That was the first time that Nunes Bros. attempted to make a connection with consumers — though it would not be the last.

But it was still the late 1960s, and the Nunes brothers were just dipping their toes into the marketing arena. They were hampered a bit by the fact that the firm was a new company relying on new production from less-than-the-best land that the Salinas Valley had to offer. As would be expected, a new shipper has to pay its dues and does not get access to the best land right away. Bob noted that the company’s quality was not the best in the industry and he could not command a top price for it. But that only made him further hone his belief that top-quality product and an aggressive marketing campaign could combine to create a point of differentiation in the lettuce business.

Nunes Bros. did what it could to create a difference. The firm film-wrapped its lettuce, which was a relatively rare practice at the time. That extra step helped land Bob a seat on the board of directors of the Produce Packaging Association, which later changed its name to the Produce Marketing Association. The association helped fill Bob’s head with more ideas about branding and marketing. About that time, Nunes Bros. invested $10,000 in a 10-minute documentary about the company. It might be the best money ever spent in the produce industry.

“That film led to the selling of our company,” quipped Tom.

Nunes---Old-ad-with-Lowrys-
One of the first unique promotions the Nunes Bros. undertook was with Lawry’s Seasoned Salt.

And of course, the selling of Nunes Bros. eventually led to the establishment of The Nunes Co. and the development of the type of firm that Tom and Bob always wanted to own.

Bob said that the film was aired at the Fairmont Hotel in San Francisco during the 1968 United Fresh Fruit & Vegetable Association convention. United Fruit Co. (Chiquita) executives saw the documentary and began a courtship of the Nunes brothers with every intent to buy their firm. Though Tom and Bob initially turned down the offer, eventually they did sell and were one of five Salinas Valley vegetable grower-shippers that became Interharvest. Tom and Bob briefly ran that company but resigned when Interharvest signed a labor contract with the United Farm Workers. That resignation came with a five-year non-compete clause that compelled the two Nunes brothers to go on hiatus.

It would make a better story if Tom and Bob plotted their return for those five years and came back with a vengeance and tremendous ideas. But that is not what happened. As brothers would do, they remained in contact but they did not talk shop. Bob traveled and Tom studied real estate. They both had real money for the first time and used it well. “We had signed a covenant not to compete and we took it very seriously,” said Bob. “We didn’t even casually talk about the produce industry during those years.”

In fact, when their non-compete ended, they worked with another shipper for about a year before they launched The Nunes Co. “because we wanted to be productive,” said Tom.

For the first several years, they grew the firm slowly. In fact, one of their first growers was Tom’s son Tom Jr. (T4), who was farming with Tom’s father of the same name called T2.

“We had the great advantage of building a company and then selling it and getting to start all over,” said Tom. “It allowed us to look at what we did right and look at what we did wrong and build a better company.”

The brothers determined that people were their most important asset, and over time, they were able to get most of the top people back that helped them build Nunes Bros. They also were able to establish a new structure that both say is key to the success of The Nunes Co. And surprisingly, they do not believe that structure has been copied by anybody else in the business.

Tom explained that every one of the company’s growers participates financially in the firm every day of the year. The company uses a pooling method to calculate returns to the grower. So it does not matter what the market is on a particular day that a specific grower harvests its crop. If the market is higher or lower on the day before or the day after, the grower participates in each market. Initially, Tom said it was difficult to find growers interested in the concept. “Growers are fiercely independent and some didn’t want to do it,” he said.

But to create the amount of volume that the brothers knew they needed to establish a brand and be proactive marketers, they knew they had to use the land as efficiently as possible. The pooling concept, Tom said, allows each piece of land to be used for its maximum efficiency and to produce the best-possible product for that piece of ground. Bob said that if a company is going to advertise its product, it needs consistent supply 365 days a year. A grower not in a pooling system is more inclined to time its production to hit an expected hot market rather than for peak efficiency.

This structure, Tom said, has made all the difference for the firm.

Current President Tom Jr. agreed. “Consistency is the key,” he said. “This structure gives us top-quality product day in and day out.”

Of course, the other big difference maker for the past 35 years has been the marketing of the product. At the outset, Bob had come up with the new brand the company would use: “Foxy.” He liked the catchy name and the fact that it was short and had other meanings. He was convinced that it could be easily remembered and could work well if he was ever able to market as he really wanted.

But for the first decade of The Nunes Co., the brothers concentrated on developing great relationships with growers and building a company with quality at its core. During that time, the brothers often discussed their goals and determined that to promote the way they wanted, they had to have much larger volume in which to amortize their advertising dollars. For that to occur, Tom had to take the production end of the business to new heights. By the time the company was 10 years old, the production was in place and a full-blown marketing program began.

Over the next decade, The Nunes Co. gave another great gift to the produce industry. It showed the industry what the power of promotion could do. Its core business was in the population-heavy Northeast corridor. The company began promoting by doing some radio and billboard advertising introducing the “Foxy” brand to consumers. Soon, television advertising entered the mix. “I discovered that you could buy TV time cheaply enough,” Bob said.

A few ads were made featuring fields of lettuce, cauliflower and other vegetables. They were well-produced commercials that aired in Boston and New York beginning in 1987, and they garnered some traction. But Bob was looking for something a bit more spectacular.

Subsequently, he determined that the popular and well-known actress and model Brooke Shields would be the perfect spokesperson for the company. He wooed the actress and her mother, and The Nunes Co. was able to produce an eye-catching commercial featuring the very foxy actress, to use the vernacular of the time. It was a smash hit.

“No question that was a great decision,” said Tom Jr., who was involved in sales at the time. “Our business took off, absolutely took off.”

That was in 1989. Over the next five years, using other celebrity spokespeople as well, The Nunes Co. established the “Foxy” brand. For a variety of reasons, the company stopped its television advertising in the mid-1990s, but the “Foxy” brand is still well known and can fetch a premium price. Bob said that there is still residual effect. Of course, the company still reinforces the brand with radio and billboard advertising to consumers, but television advertising has become both prohibitively expensive and tremendously fragmented with the advent of hundreds of cable stations, according to Tom Jr.

It was also in the late 1990s that Bob and Tom began to turn over control of the company to the next generation. Today, Tom’s three sons — Tom Jr., David and Jimmy — along with Bob’s one son, Bobby, run the company. Tom Jr. is the president, while David is in charge of overall production and Jimmy handles the firm’s burgeoning organic production. Bobby is in charge of harvesting and cooling operations. In addition, the next generation, Tom Jr.’s son T5, has moved onto the management team in the operational end of the business. Tom Jr. said that other members of the senior-management team includes Chief Financial Officer Mike Scarr, board of director’s secretary Enos Barera and in-house counsel Brett Harrell. In addition, Mark Crossgrove serves as vice president of sales, which has allowed Tom Jr. to focus his attention on the administration of the firm.

Tom Jr. said The Nunes Co. has settled into its core business of being a commodity shipper after dabbling in the value-added universe for several years. “We concentrate on core commodities, which is where we excel,” he said. “We have also added organic vegetables to the mix, and that part of our business continues to grow.”

He said that the Northeast continues to be the firm’s strongest marketing area, “But we ship product to every state in the country and continue to grow our business in other markets.”

While he is president, he said that the company operates by committee with all major decisions made with all members of the management team having a voice. Included in that group are the two founding fathers, who each admit to coming to the office a couple days a week just to see how things are going. When The Produce News was visiting, they were in the office for a board meeting. “They think they should run things by us, but we pretty much just rubberstamp everything,” Tom quipped.

While that may be the role the two men play today, it was their questioning of conventional wisdom over the years that propelled The Nunes Co. to a leadership role in both this generation and the last, and which has the company well positioned for the future.