|July 2010 • Vol. 16 • Number 12
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The North's Most Fruitful Industry: The players and products that rule the Cherry Capital
By Gary Hoffman
REGION – The cherry, that small, juicy ball of perfection, keeps stirring its processing industry to greater and greater feats.
Processors can send a frozen shipment across country without losing a single cherry to spoilage. They can put a 1-pound sugar cap on 5 pounds of frozen cherries before storage – and make it impossible for the fruit to oxidize and turn color.
The IQF (individually quick freeze) process, can freeze a load of cherries, piece by piece. The cherries are put on a conveyor “and when they reach the other end, they are like marbles,” says Nikki Rothwell, coordinator of the Northwest Michigan Horticultural Research Station near Suttons Bay. “You can measure out a cup of them because they don’t stick together.”
The time is long past when it was enough to transform cherries into canned pie filling – in part because people aren’t eating pies anymore. The relaxed sit-down family dinner complete with dessert has become a thing of the past. And that trend away from desserts has driven down the demand for the tart (baking) cherries that are mostly grown in the Grand Traverse region and changed the ways processors handle the fruit and its marketing.
“What we are seeing is less canned fruit, more dried fruit, and more juice concentrate being manufactured,” says Phil Korson, president of the Lansing-based Cherry Marketing Institute.
Consumers and the industry are moving toward “fast, easy and convenient” foods or a trendy health drink or snack.
Grandma Walton might not have preferred her cherry pies to Cherry Republic’s dried cherries covered with chipotle and chocolate. And she would have been baffled by new products like a cherry powder (as a dietary supplement) or a cherry-based sports drink (to hasten post-exercise muscle recovery).
But if the institute has its way, more health-oriented cherry-based foods could soon take a bigger share of the product mix. Much of the interest is based on the cherry’s benefits as an anti-inflammatory agent, Korson says.
Processors hope the trends catch on. A northern Michigan tart cherry crop worth about $50 million a year is at stake, and cooperatives and privately owned companies add two to three times that amount in the value of their processing.
Bob Sutherland, owner of Cherry Republic, is one of the innovators on the retail side, often turning to the processors for special orders. “We use a lot of them for different things,” he says. He sells cherry products on the Web, via his mail-order operation and from his Glen Arbor and Traverse City stores.
He recalls Cherry Growers, Inc. in Grawn rising to the occasion when he decided to offer cherry juices not made from concentrates.
“Even though we’re small guys, they’ll make juice from cherries and put it in barrels and freeze it for us – and then store it for us for a long time.”
For the processors, it’s all in a day’s work, whether it’s turning cherries into whole juices, slicing and dicing dried fruit to precise specifications, or meeting some other special request.
Here is a look at what four local processors are doing today:
Pioneering a new product
Graceland Fruit is one of the big players in northern Michigan’s cherry industry, selling to 40 countries and hitting a 20-percent growth rate virtually every year since 1995. Last year, the dried fruit and vegetable added a new dryer to its operations, increasing its capacity by 40 percent.
“Our sales were increasing rapidly, and we just felt that we had to get another system built,” says CEO Don Nugent said.
One of Graceland’s claims to fame is that it pioneered the dried cherry, currently the fruit’s most popular use. The company does far more business in various dried fruits – including blueberries, apples and cranberries, along with cherries – than it does with any other form of processed fruit product.
Since the mid-1990s, Nugent says Graceland has had an in-house marketing department that promotes its products around the world. It also has a research department that investigates ways of satisfying new tastes in cherries.
“If a foreign country has a particular taste or demand that is different from ours, we can often modify the product to produce exactly what they want.”
Nugent founded Graceland Fruit in 1973, and research played a big role right from the beginning. Because a storage accident made tons of cherries available to him for experimentation, he froze the unsellable tons and kept it on hand for tests.
Back then he especially wanted to find out if cherries could be dried during years of big harvests and then stored away for future sale. He used those cherries for experiments on cherry-drying techniques, using a small laboratory-sized dryer in his work.
“I spent my winters trying to make a dried cherry that tasted good, was shelf-stable and had a good mouth feel.”
In the late 1980s, Nugent put the ideas into action, launching his own dryer. In a little more than 20 years, Graceland went from three employees to about 200 – and few would dispute that he ushered in a new age for the industry.
Taking processing into their own hands
Shoreline Fruit is a company firmly rooted in two farming families, with operations in Suttons Bay, Williamsburg and beyond. Yet that relatively narrow ownership base hasn’t prevented it from expanding and innovating.
The Gregory and Veliquette families respectively own Cherry Bay Orchards and Cherry Ke, Inc. They began working together in the early 1970s, teaming up to establish their own processing facilities.
“You have to evolve as the business changes, or you get left behind,” says Don Gregory, board chairman at Shoreline Fruit.
Gregory still recalls how the canned purple plum market virtually vanished in the 1970s after enjoying immense popularity for decades. He has no intention of letting that happen to his cherries.
With the decline of demand for tarts, it became clear that the two families needed to do more than just sell cherries as a commodity, said Gregory, who is also president of Cherry Bay Orchards.
The families bought their own drying facility about 10 years ago and added another drying line a few years later. To pursue the flash-frozen cherry market, they also arranged to share with vegetable growers a facility in Hart for individual quick-freezing.
Sharing a facility with other growers proved to be a good option, since the harvest times for cherries and vegetables largely differ.
“We knew that we couldn’t afford an individual quick frozen facility on our own,” he says. “This way, we can run our cherries through it, and when we get done, they run their vegetables.”
Shoreline is also developing its own line of cherry products, under the Cherry Bay Orchards brand, marketing dried cherries, cherry concentrate and cherry powder.
Shoreline is affiliated with only a small number of farmers, Gregory says. That arrangement could pay dividends as concerns about food safety grow. Food companies increasingly prefer processors that can trace their fruit to its exact source, he says.
“About 85 percent of the fruit that goes through our processing is either produced by Cherry Bay Orchards or Cherry Ke,” he says.
cherry GROWERS, INC.:
Betting on cooperation
Cherry Growers, Inc. is meeting the traditional goals of a cooperative – helping members weather the ups and downs of the market – while adjusting constantly to changing consumer tastes.
In that regard, the cooperative has stepped up its processing activities for concentrated and whole cherry juice, and it has managed to do so without investing in new equipment.
“Up to his point in time, we have done it by extending the season,” says Ron Prentice, president of Cherry Growers, Inc. “You can extend the season by freezing the fruit and by running your juice products later. That works for most products.”
Even though cherry is part of its name, it’s not restricted to that fruit. For example, the cooperative sells applesauce and various combinations of cranberry, apple and grape juices, along with peach, apple and blueberry pie fillings.
Cherries are not as large a part of its business as they were 15 or 20 years ago, Prentice says. “But we are still regarded as a reasonably good-sized cherry operation.”
Cherry Growers turns to Gray & Company, a brine operation in Hart, for the processing of sweet cherries into the maraschinos that cocktail drinkers crave.
Founded in 1939, Cherry Growers Inc. has taken some of the risks out of cherry business for three generations of cherry farmers.
The growers have the responsibility of steering their entire crop to the organization. And Cherry Growers Inc. in turn is supposed to market and sell it all. In the past, that has given growers some assurance they would survive even a cherry glut.
In good times, the growers share in the profits. “When I say you share in the profits, keep in mind that you also share in the losses in bad times,” Prentice says.
Command post for an industry
Cherry Central’s name fits it perfectly.
A kind of headquarters for the industry, Cherry Central was established in 1973 to solve the problem of severe price competition between fruit-growing cooperatives
“By coming together, we could sell all our members’ products at the same price,” says Richard Bogard, president of Cherry Central. “It put more stability into the returns we can pay back to the cherry farmers.”
A super-cooperative, Cherry Central belongs to nine individual fruit cooperatives – three in Michigan and six in other cherry-growing states.
For the most part, member co-ops take on the task of processing the cherries and then turn to their umbrella organization for administration.
When it comes to processing cherries, Cherry Central’s members cover the gamut: Like others in the industry, they put cherries into a range of frozen packs for storage, transportation and sales.
Other products are dried cherries, canned cherries and cherry juice, as well as blends of cherry juices with other juices. They even produce a cherry applesauce.
The central office handles logistics, invoicing, quality control and marketing. It also performs some cherry drying at its own facility at a facility in Shelby, south of Ludington, and owns a manufacturer of cherry pitting machinery in Kalamazoo.
“We are a little more integrated than most people think we are,” Bogard says.
Cherry Central also has two researchers tackling product development of the sports juice business and other segments. They also work on improving existing products.
“We basically try to give the buyer anything he wants. I think we are the only processing group that has every different item.” BN
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