Organic Orchards: Pioneer Spirit Lives On In Small Grower
By Deb Stenberg
Orchardists Gary and Judy Gottschalk take a break on the deck of their fishing shack, located on the banks of the White Salmon River.
A century and a half after the first settlers arrived in the Mid-Columbia Gorge area, Gary and Judy Gottschalk followed in their footsteps. They were looking for a rural place to raise their children. They found it in 23 acres on the banks of the White Salmon River, a glacier-born river that runs south from Mt. Adams to the Columbia. Once a pear orchard, the property had been overtaken by blackberries and thistle by the time the Gottschalks arrived in 1993.
They also discovered a new passion inside themselves. Although they had no background in farming, Judy recalls how strongly they felt about the obligation that came along with ownership of the property. “It was important that we produce something good from it,” she says. After researching the area and potential markets, the Gottschalks settled on the same crops those early settlers did: apples and pears. They also decided to be among the growers pioneering the latest in organic methods.
Their decision came at a time when consumers had a heightened sensitivity to chemicals in their food supply, in part due to the negative publicity about Alar use on conventionally-grown apples. By the mid-1990s, a time during which many existing orchards were converting to organic production, the Gottschalks were early enough to secure the name “Organic Orchards.”
Working with their teenaged son and a crew of his friends, the Gottschalks planted 1,050 trees over a weeklong spring break in 1994.The boys worked hard, earning some pay and eating well, too. “I think it would have been cheaper to pay a crew the going rate than it was to feed those boys,” Gary recalls, laughing. The Gottschalks didn't have much to show for their efforts that fall. “We had four apples out of over 1,000 trees,” Judy recalls. They weren't discouraged; apples, they knew, take time.
By 1996, three years after the Gottschalks bought their piece of the dream, a significant number of other Washington growers were buying into it, too. A total of 1,800 acres were reported to be in organic apple production in Washington. Another three years later that number had more than tripled to 6,540 acres in organic apples, 38% of the total United States organic apple acreage, according to a 2002 Washington State University study.
Thinking about growing and selling organic apples and pears?
You'll need to think like a marketing guru, advises Washington State University Extension Agent David Granatstein of WSU's Center for Sustaining Agriculture and Natural Resources. “The days of growing organically and automatically getting a premium price are over” he emphasizes. Since the publication of his 2001 report, Current Trends in Organic Tree Fruit Production, organic tree fruit growing in Washington State has definitely leveled off and perhaps dropped slightly. There aren't enough natural food stores to absorb the sales of all the acres in production in Washington. Read more…
Tricks of the trade
In response to the supply increase, the price of organic apples has dropped off in the past year or two, as have the acres being converted to organic. (See sidebar) Yet, for the past ten years, the Gottschalks have remained in business and have grown.
They are the first to point out that Gary's computer consulting business has given them the luxury of putting their revenues from the apple and pear sales back into growing the orchard business. Despite a decade of experience, Judy says, “We are definitely still in the learning process of growing organically. I don't know if one ever could know all the ins and outs. It's a continual learning process.”
They have mastered many key points, however. They know the techniques for creating habitat for beneficial insects, how to inhibit mildew without toxic chemicals, and the wisdom of removing brush and small trees downhill from their orchard to allow cold air to flow out of the pocket. They can tell you at what blossom stage they'll need to fire up the orchard fan and smudge pots if the spring weather turns cool.
And they've learned it's well worth it to pay experienced pickers by the hour. “We used to hire kids to help pick, but that produced a lot of bruised and damaged fruit,” Gary says. They found a couple of older, experienced pickers and pay them by the hour, rather than paying by the bin like larger orchards. “When they are paid by the bin, they're whirling dervishes,” Judy says. “When you pay them by the hour, they go slower and are more careful.”
The Gottschalks now have about 2,800 trees occupying the same 13 acres on which they originally planted 1,050 trees. Organic Orchards cannot compete with larger producers in sheer volume, but they've found a comfortable niche that works well for their size.
One of their strategies is to be responsive to the changing tastes of their consumers, which requires offering new and unusual varieties as soon as possible after they are developed. Initially, they plant just 10 to 15 trees of a new variety. Because they grow dwarf varieties of apples, they are able to get fruit in three years, at which time they conduct taste trials. If the variety tastes good and grows well at their site, they plant more. One of these successful trial plantings was an apple called ‘William's Pride’ that ripens around the first of August. With it, Organic Orchards provides the first apples of the season to a clientele that highly values that pleasure.
Taking it to the streets
A few years ago, the Gottschalks sold their entire crop through a local organic packing house. Today, they still sell from one-half to two-thirds of their crop to the packer. The rest is sold through New Seasons, a natural food store chain, and three food cooperatives, Food Front, People's Food Co-op, and Alberta Cooperative Grocery. All of these stores are in Portland, Oregon, 60 miles west of the orchard. These direct sales allow them to avoid a broker's fee, typically around 10 percent.
The strategy for getting into the stores was a simple one, Judy says. There was no costly direct mail campaign or web site, just good old-fashioned personal contact. Gary and Judy simply called, introduced themselves, and arranged for a time to stop by. If fruit was available, they took in a sample. Persistence was important–in most cases it took several calls before a store placed an order. They have now established solid relationships with the produce managers of these outlets. Unlike major retailers, the natural food stores and co-ops generally don't pressure the Gottschalks to lower their prices. Their customers want high quality locally grown fruit and do not expect to find it at Third World prices.
The Gottschalks sell most of their fruit in boxes, but Food Front likes the apples delivered and displayed in bins. For two years, they made do with old cherry bins. But for a store that doesn't have a forklift, the 600-pound loaded bins were difficult to move around the store. Last summer the Gottschalks worked with the store's produce buyer and a Naches-area supplier to develop wooden mini-bins about half the size of a cherry bin. Four people at the store can easily move one of these filled “mini-bins,” which weighs about 300 pounds.
Judy e-mails and calls stores weekly to let the produce managers know what apples and pears are available and to get their orders for a Saturday morning delivery. Sometimes she gets more than she bargained for. She recalls that she had approached Portland's New Seasons Markets and had emailed the produce manager for six weeks without an order. Assuming he didn't intend to order, she neglected to e-mail him on the seventh week. He contacted her the next day, a Wednesday, and placed an order for 97 boxes of pears to be delivered by the following Friday, an extraordinarily large order for the farm. With the help of a friend, Judy filled the order and found a new satisfied customer.
Within the next two years, the couple plans to offer cider and juice under the Organic Orchards umbrella, an opportunity to add further value to their products. Meanwhile, they have plenty to keep them busy. For both Judy and Gary, the most rewarding part of the orchard business is delivering the fruit. “It's very satisfying to see the faces of these people we know in the markets. They light up. We know they are glad to see us and what we have brought.”
Thinking about growing and selling organic apples and pears?
You'll need to think like a marketing guru, advises Washington State University Extension Agent David Granatstein of WSU's Center for Sustaining Agriculture and Natural Resources. “The days of growing organically and automatically getting a premium price are over” he emphasizes. Since the publication of his 2001 report, Current Trends in Organic Tree Fruit Production, organic tree fruit growing in Washington State has definitely leveled off and perhaps dropped slightly. There aren't enough natural food stores to absorb the sales of all the acres in production in Washington.
Large corporations are making major gains in the organic market and are forcing more price competition. In addition, China—already a major apple grower—is exploring organic production. The threat of Chinese apples flooding the American market is an ominous cloud on the horizon.
Are small organic American growers facing an inevitable demise? Not necessarily, says WSU Small Farms instructor Deanna Burnett Keener, who is also an adviser with the Washington Small Business Development Centers. It's important, she notes, that growers create a strong brand image and continually reinforce it, giving customers something to hang their loyalty on. Small growers have the advantage of being able to create personal relationships with their customers through direct marketing channels, she adds.
Vance Corum, direct marketing specialist with the WSU Small Farms Program, has explored many of those options for small growers as well. For 25 years Corum has helped start farmers' markets and other direct marketing projects throughout California and the Northwest. “Organic growers should definitely look into these markets. Farmers' markets have a disproportionately high number of organic growers and a clientele that's predisposed to buying organic. And they produce immediate cash versus waiting up to 90 days for payment from a retailer or broker,” he says.
Selling face-to-face creates more consumer confidence and loyalty than retail or Internet sales. That's why growers at a farmers' market sometimes build relationships that can lead to a successful mail order business, Corum notes. The relationship can be maintained with a newsletter and special offers such as a Christmas pack. Not that the grower should underestimate the sales possible at the market itself: the Portland Farmers Market on Saturdays alone generated $2.2 million in grower revenues in 2003, double the volume of two years earlier. It's just one of several in the Portland area. Meanwhile, five Seattle farmers' markets operated by the Neighborhood Farmers Market Alliance generated income in excess of $3 million for 126 vendors in 2003.
Apple growers aren't likely to start a Community Supported Agriculture (CSA) operation, which generally depends on a variety of crops over a long season. However, Corum notes that fruit growers might work with a local CSA farm to give them a more diverse weekly offering.
Be on the lookout for future marketing developments, like the trend to connect growers to groups who do fundraising – substituting fresh, organic produce for the current deluge of chocolate bars and magazines. Wenatchee Valley College is exploring a system where growers provide organic fruit to Seattle church groups for fund raising.
Similarly, John Jacobson of Mount Hood Organic Farms in Hood River, Oregon, has originated a program called School Aid. Started in late 2002 with initial support from Portland natural foods retailer New Seasons, School Aid soon signed up 10 Albertson's stores to move organic apples and pears at $.99 to $1.19 per pound. The grower moves product at a low but sustainable price, the consumer gets a delicious local product at a price competitive with commercial fruit, and the Portland School Foundation receives 41 cents for every pound of fruit sold, which goes to fund extracurricular music, sports or tutoring programs determined by each local school. The program still needs some fine-tuning, however, to ensure adequate compensation to retailers so they are motivated to give the product more prominent placement in their stores.
Rather than helplessly watch the legislature cut school funding, Jacobson decided to help the schools single-handedly while making his organic fruit more desirable and available to the general public. A worthy alternative to candy-pushing, this initiative is an example of creative social marketing. Expect to see more farmers taking a values-based approach to align with schools and other institutions in the future.