Voices: Power Lunch

We're not in Kansas anymore

Food processors must show farmers what food products are needed now and what will be needed in the future. So writes Don Nugent, president/CEO of Graceland Fruit.

By By Don Nugent, President & CEO of Graceland Fruit, Inc.

Your peaches are probably not grown in Georgia anymore, and who knows where your bananas came from. Like most other American businesses, supermarkets, food manufacturers and processors are turning to low-production cost countries to save money and to offer less expensive consumer goods.

China, Mexico and Brazil, among many other countries, now produce food products at a fraction of the cost of U.S. suppliers. The question is, should the U.S. protect the agricultural industry with import tariffs or other protectionism policies?

As processors, we have to maintain a fragile balance between finding commodities at competitive prices and assuring our food sources are both reliable and safe. We must do this while maintaining farmer and processor profitability that will fund continued investment in research and development and lead to new product innovations.

Today, we all believe deep in our hearts that the American farmer has been a patriotic symbol throughout our history and remains an important part of our economy. We all must agree that in the face of fierce international competition, no one wants to see our farmers go the way of American manufacturing. But the agriculture and food industries must react to these new competitive pressures.

While it is true American agriculture is facing tough competition and is pitted against foreign countries that can be expected to produce cheaper agricultural goods for at least the next 50 years, protectionism is not the answer. As an entrepreneurial farmer and processor, I think farmers, cooperatives and processors need to focus on competing better, not on government supports.

So, how do American farmers and processors compete with low-cost competition? In the words of Albert Einstein, imagination is more important than knowledge. U.S. farmers need to work with their cooperatives, state universities, processors and manufacturers to become more innovative in their thinking, product development and in creating value-added processes for their agricultural products. This means inventing new products and new product uses, studying new markets and constantly monitoring consumer trends.

Graceland Fruit has survived and grown because it expanded its business to include Soft-N-Frozen fruit products for the frozen dairy market as well as dried fruits.

Trends facilitate innovation. The first step in innovation is learning the trends that directly or indirectly relate to food and consumer eating habits. Consider organic food, a fast-growing category. According to industry estimates, 50 percent of Americans have tried organic food, which is now considered mainstream and thus is becoming more affordable.

What else is brewing? Americans inspired by diets such as Atkins, South Beach and The Zone can’t get enough of low-carb and low-fat food products. Today’s consumers are demanding new food product choices due to low-fat and low-carbohydrate diets.

Farmers cannot meet the ever-changing needs of today’s consumers alone. American farmers need to form grower cooperatives with entrepreneurial leadership that is creative, sensitive to consumer and market demands and capable of creating new product strategies for their raw commodities.

Success will stem from united cooperatives, processors and manufacturers that are developing solutions that can be integrated together to maximize the cooperative’s resources. Technology in agriculture has been an integral part of production since the conception of food canning in 1819. Food safety and quality assurance are at the forefront of consumers’ and manufacturers’ minds. Today, food technologists are developing food products to meet new trends in dieting and are concerned with issues of product shelf life and strong consumer appeal with consistent color, texture, taste and total composition.

Food processors have an obligation to the farmers too. They must show farmers what is needed and what will be needed in the future so that agricultural commodities are no longer a commodity but a value-added food ingredient or consumer product.

In addition, today’s farmer and the food industry should look at worldwide business activity. There is no longer a simple domestic marketplace - the world is the marketplace. Today’s world is much smaller due to the strengthening of global transportation and communications infrastructures that are facilitating the worldwide consolidation of the food manufacturing industries.

To prove my point, consider the success story of Graceland Fruit. We started out as a small cherry cooperative in Frankfort, Mich. Now our company buys raw fruits and vegetables from 12 different countries through worldwide sourcing and procurement. The really exciting point is we now export to more than 35 countries worldwide and are creating new markets for dried fruits and vegetables, shelf-stable refrigerated vegetables, and Soft-N-Frozen fruit products for the frozen dairy market.

Graceland started innovative product development strategies during a year when the cherry crop was so large that we decided to experiment by drying the excess cherries. Next, we experimented with blueberries, apples, carrots, bananas and peaches. Then all of us at Graceland Fruit became the proud inventors of the world’s first commercial cherry dryer. Developing the drying process took several years. To perfect our process, Graceland recruited professional food scientists who brought new quality assurance procedures to our products and process standards that assure consistent quality, color, and taste while consistently controlling water activity and other variables.

Technology and innovation have become the living root system of Graceland Fruit. Our latest product lines include an expansion into infused dried vegetables and refrigerated vegetables with a 90-day shelf life.

Our research and development department has been diligent in developing a number of potential applications for these extraordinary new ingredient products as well as our existing fruits and vegetables products. We work closely with processing and manufacturing customers to develop ingredients that meet their exact product specifications. That’s how our small American cooperative became a multinational innovator in the agriculture industry.

The agricultural industry is no longer a regional or even a domestic market that just buys what we grow and sell. It’s a consumer-driven industry that is constantly changing here in America and around the world. We must be willing to change and produce what our customers want to buy rather than try to sell what we produce.

That’s how farmers, cooperatives, processors and manufacturers can best protect America’s agriculture industry -- always looking to turn our challenges into new opportunities.

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