Growing, packing, marketing must work together
The key is leadership and good management.
Peter Verbrugge, head of a vertically integrated fruit company in Yakima, Washington, sees growing, packing, and marketing as three legs of a stool.
“If one is weak, it affects the other two. All have to work together to make the organization successful,” said Verbrugge, who is chief executive officer of Sage Marketing and Valley Fruit, Yakima.
The key to keeping the stool balanced is strong management and leadership throughout the organization, Verbrugge said, and this will become more and more critical as profit margins narrow. Employees should be given authority to make decisions but made accountable for the decisions they make.
“Work with them on goals,” he advised. “When they achieve their goals, make sure you reward them and acknowledge that achievement. Develop a relationship based on trust, so you can work with them, knowing they are doing the best job they can.”
Top management must provide a very clear focus and vision for the organization in terms of what it is doing and how it will get there, he stressed.
“Opportunities will come by, and you have to evaluate them. Does it enhance our core competency, or does it take resources away from our core competency?”
For example, diversifying into blueberries might make sense from a grower point of view, but not as a packer.
“You’ve got to do strategic planning and review that plan every year,” he said. “Redevelop the plan every three years and include key personnel in that so you all know where you’re going together. The president has to keep a pulse on what’s going on, and look for warning signs in each of the three areas.
Verbrugge offered the following advice for management:
Growing: Be familiar with packouts and know what the returns are, and what the return on investment is for each block, so you can make an analysis of the best use of that land. Spend time visiting the orchards. Develop a relationship with ranch managers.
Packing and shipping: Look at production costs and keep an eye on postharvest quality. A quality problem will affect the marketing program. Know what returns the growers are receiving. Growers are important to the organization. You have to be sure that in the long run they’re profitable. If they’re not profitable, the stool falls over.
Sales and marketing: Track sales and f.o.b. prices through daily reports. Watching movement and pricing trends gives you a sense of what your crop value is and helps make decisions down the road about how to manage and market the crop.
Get to know your customers so you can take that information back to the warehouse and the growers so that they can implement practices to best serve your customers.
Study and learn: Read anything you can get your hands on about business, finance, marketing, anything relating to the fruit industry. Develop a network of contacts within the industry—not just in Washington—but also in other areas. Understand what they’re doing, how they’re doing it, and, most importantly, why. Go beyond the produce industry. Learn about manufacturing. Continue to expand on your knowledge and learning, and be able to take that back to your organization.
“Be able to take advantage of opportunities and minimize any mistakes and problems, and the key to that is leadership and management,” Verbrugge concluded.