Intensifying foreign competition hasn’t dimmed farmer Frank Tiegs’ enthusiasm for the frozen fruit business.
With his recent purchase of two processing companies — Rader Farms of Lynden, Wash., and Willamette Valley Fruit Co. of Salem, Ore. — Tiegs is betting on the industry’s resilience.
“There’s always going to be a place for U.S. grown fruit,” he said. “I wouldn’t have bought them if I didn’t think it was a good investment.”
For Northwest crops such as blackberries and raspberries, anxiety about the future of the U.S. frozen fruit industry springs from the easy availability of lower-priced imports from Mexico and South America.
Blueberries also compete on a global scale, with new plantings and production rising steadily around the world in recent years.
Tiegs said he’s not fazed by the industry’s changing dynamics, recalling the nervousness surrounding the Chinese apple industry in the 1980s and 1990s. Decades later, U.S. apple growers continue to find ways to compete.
In his time as a farmer, Tiegs has found it’s often wiser to invest during periods of uncertainty.
“My own experience has been to plant what’s not the hot thing,” he said.
In the 1970s, Tiegs began his agricultural career doing tractor and truck work for other farmers, then began buying land for himself in the 1980s.
Eventually, he moved into fresh packing of apples and potatoes, then invested in processing fruits and vegetables. Now, Tiegs owns about 15 facilities across Oregon, Washington and Idaho.
This “seed to fork,” vertically integrated approach allows Tiegs to better withstand agriculture’s economic cycles, he said.
When crop prices are high, growing his own supply of raw product helps mitigate costs at his processing facilities. When prices are low, the processing facilities add value to crops.
Though he primarily considers himself a potato grower, Tiegs regularly rotates this mainstay crop with sweet corn, onions, peppers, carrots, peas and green beans for processing.
Frozen fruit offers interesting opportunities for innovation, such as the retail smoothie mix kits that Rader Farms sells under the licensed “Jamba” brand.
Under Tiegs’ control, the newly acquired facilities in Oregon and Washington will generate more product for food manufacturers than previously, requiring an investment in building inventories.
Increasing the amount of crops processed at the facilities will also reduce their down time.
“I usually try to run plants as close to capacity as I can get them,” said Tiegs, who plans to buy crops from more farmers in the Skagit and Willamette valleys.
“We’re hoping to expand our grower base,” he said.
Inventure Foods, the previous owner of Rader Farms and Willamette Valley Fruit Co., was hindered by serious financial problems dating back to a food recall in 2015.
The recall was prompted by the detection of listeria, a bacterial pathogen, at its Fresh Frozen processing facility in Georgia.
Inventure lost money in every quarterly period since the recall, though the company also blamed the losses on lower frozen food prices and reduced distribution of certain products.
Before the recall, the company was reporting solid financial gains to the U.S. Securities and Exchange Commission.
In 2014, Inventure’s revenues topped $285 million, more than double from five years earlier. Its annual profits shot up from less than $4 million to nearly $20 million in that time.
By 2016, the company’s sales slid to $269 million and it lost more than $30 million.
Financial pressures led Inventure to sell its Fresh Frozen division to the Pictsweet Co. for $23.7 million and to sell Rader Farms, Willamette Valley Fruit Co. and other assets to Tiegs for $50 million.
Most recently, Inventure was taken over by Utz Quality Foods for $165 million.