To stay competitive in the fruit industry, some get larger to achieve economies of scale. Others, like one western New York State producer, find ways to reach the consumer directly while focusing on being more efficient.
Darrel Oakes of LynOaken Farms in Lyndonville, New York, is using a variety of ways to improve the family business’s bottom line—delivering fresh apples and cider for sale in about 20 retail stores, running a U-pick operation and two fruit stands, and soon, selling wines and hard cider from their own winery.
LynOaken Farms comprises 230 acres of apples, 70 acres of tart cherries, and a small acreage of fresh peaches, sweet cherries, and wine grapes. Major apple varieties include Ginger Gold, Gala, Honeycrisp, McIntosh, Cortland, Empire, Jonagold, Red Delicious, Crispin, and Fuji. Apples trees are planted on Malling 9 on a 6- by 12-foot spacing, with about 600 trees per acre, and are trained to a vertical axis system.
Other working partners in the third-generation family farm include Oakes’s wife, Linda, his sister Wendy Wilson, and his cousin Jeff Oakes. His son Jonathan is starting up the new winery.
Many growers on the East Coast have turned to direct sales as a way to increase profits. Selling fruit directly to consumers has proven successful for some, mushrooming into several side businesses—gift stores, bakeries and eateries, and agri-entertainment centers. But the Oakeses’ direct sales component is atypical of those peddling produce through fruit stands. They focus on keeping high-quality product before the consumer and use the U-pick and fruit stores to create visibility for their brand.
LynOaken is well situated to reach consumers, located halfway between Rochester and Buffalo, two major metropolitan areas of New York State.
Twice a week, refrigerated trucks deliver three sizes of bagged apples to upscale grocery stores located in a 100-mile radius. The apples and flash-pasteurized cider made from their own cider press are displayed in two styles of refrigerated units—upright or coffin—provided by LynOaken. They take care of stocking the refrigerated units, eliminating the need for the grocery store to warehouse product and replenish shelves. Customer service is a vital part of their retail business.
Darrel’s father began direct delivery of apples in the 1970s in an attempt to reach customers year round. Between their two locations—one six miles away called the Apple Depot—the Oakeses have cold storage and controlled atmosphere storage for 280,000 bushels of fruit.
Their new Apple Depot is located on a major highway that brings travelers and tourists from across the state. Plans for the new facility, which already had cold storage, include a winery, cider house, and a retail market.
They run a U-pick operation only on weekends, offering 15 varieties during the season. They charge by volume, with fruit picked in half-bushel containers. The trees are small, and the rows are attractive.
The U-pick component of their direct sales focus gives them visibility for their branded product in the stores, helps generate income, and moves them closer to consumers in the food chain.
“The people that come to us just want fruit,” Wilson said. “We don’t try to give them a ‘farm’ experience.”
Wilson, who joined the family orchard in 2001 after gaining international marketing experience, said that one of the problems with small, “mom and pop” operations is that they have no distribution. The more elaborate fruit stands have a lot of money invested in one location.
Oakes noted that the retail division, with the U-pick, is the side of the business they’re trying to expand. They try to be very efficient suppliers of high-quality product at the wholesale and retail levels.
LynOaken’s focus on direct sales gained momentum after 1998 when wholesale prices dropped. “We could no longer survive on what was left over in the marketing chain,” he said.
Their direct-delivery program was a “touchy thing” to sell to large supermarkets because it circumvents the production warehouse, he said, and they had to approach it in a sensitive manner.
“Large supermarkets make a lot of money on the warehouse. We had to show them that it adds to their apple sales, not cannibalizes it.”
LynOaken, considered a midsized operation, is too small to benefit from the efficiencies of scale of a large, vertically integrated business. Yet it’s too big to move its entire crop through retail or direct marketing. It’s a challenge to remain competitive, keeping costs per bushel low.
Only a small percentage of their total production reaches the consumer through direct marketing or retail sales. For the most part, LynOaken Farms sends its crop to the fresh wholesale market.
“But that 5 percent of volume now represents about 25 percent of total farm sales,” Oakes said. “There are a lot of extra costs involved, but it does generate income.”