Retail venture hit by recession
The Stennes family is refocusing on the core business of growing fruit.
Keith Stennes (left) and his son Kevin still use the office at the retail store that they had to close and put up for sale.
After Keith Stennes’s twin sons Kevin and Mark graduated from college and returned to work at the family orchard at Pateros, Washington, things had to change.
Keith, a third-generation orchardist, was eager for his sons to continue the operation for another generation. In order to support three families, instead of just one, the Stenneses figured they needed to expand and diversify beyond the orchard. However, they’ve since learned that diversification can be a big risk.
“Our goal was to eventually have 50 percent of our income from nonfarm or value-added sources,” Kevin explained.
They became a strategic investor in Homemade Harvey, a California company that makes snacks of crushed organic fruit in resealable pouches, for which the Stenneses supply apples and pears (see www.homemade harvey.com).
They also bought and leased more orchard. And they converted a former bank in downtown Pateros into a 4,500-square-foot retail store overlooking the Columbia River, with patio, loft, deck, and offices. They named it The Homestead in honor of Keith’s grandfather Britanus Stennes who emigrated from Norway and established his first orchard in the Methow Valley, about 14 miles from Pateros, around 1900.
At The Homestead, the Stenneses sold some of their fruit, along with gifts, espresso, teas, fudge, homemade ice cream, pizza, and much more. Keith’s wife, Deb, Mark’s wife, Robin, and Kevin’s wife, Jennifer, were all involved. They served lunches and held special Italian nights.
They opened in 2008 just before the recession hit. Pateros had a population of only around 650 at the last count, and the whole of Okanogan County has fewer than 40,000 people. The Stenneses were counting on a continuing influx of people coming into the area to retire or build second homes, as well as more tourists dropping in as they traveled along Highway 97, which is on the scenic Cascade Loop.
Those who came loved it, and the Stenneses enjoyed getting to know people in the community, but there were not enough of them.
“It was just really bad timing,” Keith said. “You need to have a good population base to support this every day.
“At the time we went into it, we had a five-year plan,” he added. “We knew it would take three to five years to establish the business, so we weren’t going into it thinking it had to be right away. We figured there would be twice as many people living around here in five or ten years.”
Keith became dismayed seeing red ink at the end of each business day. “It was tough on our families’ lifestyles because it was twenty-four-seven. You’re thinking about it even if you’re not out there doing it.”
2009 cherry crop
The final blow was the 2009 cherry crop when many growers didn’t pick the fruit because the market was flooded. The Stenneses walked away from ten acres of cherries. “We left 250,000 pounds of cherries hanging on the trees,” Keith said. “Had those been sold at a moderately reasonable price, we would probably have decided to go into year two or three and see.”
“When we were planning all these things, the economy was strong and the fruit market was really good,” Kevin added. “We were relying on another year or two that were good like that, but that didn’t happen. In hindsight, we wouldn’t have done it.”
To cut their losses, they closed the store in December of 2009 and put it up for sale.
The family is still expanding and diversifying by leasing acreage and replanting their own orchard, however. Their new goal is to double their acreage over the next ten years.
“The bottom line is our heart’s in agriculture,” Keith Stennes said. “We love what we’re doing. Diversity is a good thing to shoot for, but I think what we’ve learned is we need to do what we do well and do more of that, and do it better.”