Global Berry Farms Llc Business Information, Profile, and History

Company Perspectives:

You can look long and hard but you won't find a better supplier of fresh berries anywhere in the world!

History of Global Berry Farms Llc

Global Berry Farms LLC is a Naples, Florida-based joint venture of three major berry producers: MBG Marketing; Hortifrut, S.A.; and Naturipe Berry Growers. MBG operates out of Grand Junction, Michigan, and is North America's leading grower/shipper of fresh blueberries, packaged under the "Great Lakes" and "Great Sunbelt" labels. Hortifrut is the top grower/shipper of fresh blueberries, raspberries, and blackberries in Chile (where the company is based), Mexico, and Spain. Because of its unusual geography, Chile is comprised of six distinct climatic regions stretching some 1,200 kilometers. Relationships with growers in five of these areas allow Hortifrut to harvest blueberries from early November to late March, raspberries from November until early June, and Blackberries from late November until late March. In addition, Hortifrut also draws on production in Mexico and Guatemala to provide berries from as early as late September and as late as May. Hortifrut berries are marketed under the "Southern Sun" brand. The third participant in Global Berry is Naturipe, a major California grower/shipper of strawberries, packaging it products under the Naturipe name. Because the partners operate in a wide range of climatic regions in both the northern and southern hemisphere, Global Berry is able to provide retail food outlets with berries year round. For most areas of the United States, fresh berries were traditionally available during a few weeks in the summer. Now with the advent of global sourcing, as practiced by concerns like Global Berry, food retailers have access to berries all months of the year. Supermarkets, for instance, are able to set up permanent "Berry Patch" sections. Even with berries available year round, however, distributing them to customers is a major logistical feat, especially because berries have a brief shelf life, lasting just a week. Nevertheless, Global Berry is so successful that many consumers now take it for granted that whenever they want fresh berries the supermarket will have them.

Roots of Naturipe Date to 1870s

A Watsonville, California, farmer named James Water is credited with planting Central California's first commercial strawberry crop in 1877 when he devoted 14 acres to cultivating Cinderella strawberries. When he took that crop to San Francisco, it sold for 20 cents a pound, a remarkable price that caught the attention of other farms who joined Water in planting strawberries. After 40 years, California strawberries grew in popularity, as did the number of growers. At this point, in 1917, area growers decided to band together to form a marketing cooperative, the Central California Berry Grower Association. In this way, strawberry growers were able to improve crops by sharing their knowledge. They were also able to bargain as a group to achieve higher prices and pool their resources to promote their product. In 1922, the association adopted the Naturipe trademark. These growers were simply following a path blazed by California's citrus growers decades earlier. The gold rush of the 1840s brought a large number of prospectors to California as well as the disease of scurvy. Citrus fruits were known to prevent the disease, and because of Southern California's mild climate, farmers quickly introduced lemons and oranges to the region. The railroad eventually made nationwide distribution possible, but growers were at the mercy of middlemen. To coordinate their marketing and maximize profits, groups of Southern California growers formed local associations. In 1893, the local associations were united into one organization, the Southern California Fruit Exchange, which set the standard for all cooperatives to follow, such as Naturipe. The Exchange began advertising in the early 1900s, and in 1908 its ad agency coined the name "Sunkist," which was soon printed on stickers placed on the highest grade of lemons and oranges marketed by the organization. Decades later, the Exchange would become known by its present-day name, Sunkist Growers. Thus, strawberry growers followed this time-tested approach, creating the Naturipe name in hopes of duplicating the success of Sunkist.

MBG Marketing Founded in 1936

The history of MBG Marketing dates back to 1936, when Michigan blueberry growers decided to try the marketing cooperative model pioneered by Sunkist and refined by the New Jersey blueberry and cranberry cooperatives. The organization was named the Michigan Blueberry Growers Association. The man instrumental in establishing the organization was horticulturist Stanley Johnston, who worked for the Michigan Agricultural Experiment Station (founded in 1888 as part of a government-funded, nationwide network of stations dedicated to conducting research and development projects for farmers). Johnston and 13 blueberry growers held the first meeting of Michigan Blueberry Growers on November 21, 1936. Within two years, the group established packaging standards and created the MBG logo for labeling, although at this stage they packed under the "Tru-Blu" brand created by the New Jersey Blueberry Growers Association. It was not until 1945 that MBG built its first warehouse, located in Grand Junction, Michigan. A year later, MBG formed its own sales organization rather than rely on private marketers. Later in the decade, Northern Indiana growers began to join the association, as blueberries became a popular crop in that nearby area. Annual sales topped the $1 million mark by the start of the 1950s, at which point MBG hired its first full-time general manager. By the middle of the decade, sales exceeded $2 million, as MBG ascended to a dominant position in the North American blueberry industry. In the 1960s, MBG continued its efforts to promote blueberries and now looked to market overseas. In order to extend the number of months the association could provide blueberries, MBG began in 1983 to extend membership to growers in Georgia and Florida. Now MBG offered blueberries as early as April. By this stage, annual sales totaled more than $18 million. To supplement its supply of blueberries, the association later in the decade began to establish sales agreements with non-member growers in Arkansas, Mississippi, North Carolina, and Louisiana. Gaining access to North Carolina blueberries was especially important because it opened up East Coast markets for MBG. Growth continued in the 1990s, with further expansion into southern states. MBG also opened The Blueberry Store, a retail operation located in South Haven, Michigan, that sold a variety of blueberry gift and novelty items, as well as gourmet food products. The store was eventually supplemented with a catalog operation and a Web site. Another important development during this period was the establishment of a marketing agreement with a South American berry producer, Hortifrut, S.A.

Hortifrut Founded in 1980

Hortifrut was founded in 1980 by Chilean entrepreneur Victor Moller, who developed the idea for the company while attending Oregon State University and observing the berry growers of that region. He recognized that Chile offered ideal growing conditions for blueberries and could take advantage of its varied climatic regions. He was also a visionary, from the outset setting an ambitious goal of serving all the world markets and ultimately serving them year-round. He was also not content to limit Hortifrut to blueberries and became involved in blackberries, strawberries, currants, cherries, and asparagus. The company was at the forefront of Chile's rapidly growing export of blueberries. In 1990, the country exported 13,000 boxes. That number reached 567,000 boxes by the middle of the decade and soared to 2 million by 2000. A significant factor in Hortifrut's ability to make inroads in the American market was a marketing venture established with MBG in 1991.

In 2000, MBG and Hortifrut decided to establish a deeper tie between the two companies. In June of that year the parties signed an agreement creating Global Berry Farms, although word of the deal was withheld until Michigan's blueberry harvest was completed in October. The companies were simply responding to the year-round demand from food retailers for berries. Not only did they want a reliable supply, they wanted to be assured that the fruit met quality, food safety, and electronic record-keeping requirements. According to John Shelford, named Global Berry's president, "Our view of the future was that we could not afford to provide all these services as individual companies. And we didn't have the supply."

With more than 25 years of experience in produce, Shelford was well suited for his new position, having worked for both MBG and Hortifrut. A graduate of Cornell University, where he earned an undergraduate degree and MBA, Shelford served as a district manager for MBG from 1976 to 1983 and then was named general manager of MBG from 1983 to 1994, during which time annual revenues grew from $10 million to $40 million. After a stint as director of berry marketing for Gargiulo, Inc., he became president of Hortifrut, a position he held for four years before taking over Global Berry.

Because of their seasonal compatibility, MBG and Hortifrut were natural partners. Under the terms of their agreement, both parties retained their status as separate companies, but all of Hortifrut's importing, distribution, and sales functions were absorbed by Global Berry. MBG continued to market its own processing fruit while contracting fresh sales to Global Berry. The products would also be labeled under each company's existing labels. The new entity set up its headquarters in Naples, Florida. Staffed by a combination of Hortifrut and MBG personnel, sales offices were located in Dallas, Texas; Tampa, Florida; and Grand Junction, Michigan. Global Berry's stated goal was to become the world's top supplier of fresh blueberries, blackberries, golden raspberries, raspberries, and red currants. The company was also interested in becoming a year-round supplier of strawberries, by far the most popular item in the berry category and a key to future growth.

Global Berry enjoyed a successful launch. After a year in business, Shelford told the publication Grocery Headquarters, "Our produce buyers like the way we do business; they like having the ability to develop a relationship with one person as their berry source. Plans for the future are to service customers the best way possible. We're convinced that execution is more important than strategy sometimes. A lot of people have great strategies, but great strategies poorly executed are not as good as consistent strategies executed well."

In 2002, Hortifrut took steps to dramatically increase blueberry production over the next several years. The plan was to add new plantations so that the company could produce more than three million trays from 1,000 hactares of land. While this was an important development for Global Berry, it was overshadowed in significance in September 2002, when it was announced that Naturipe Berry Growers would become an equal partner in the joint venture. As a result of adding Naturipe strawberries, Global Berry was in a position, in the words of Shelford, "to offer a year-round of supply of the entire berry category." According to Hortifrut's Moller, Global Berry "will now be capable of providing promotional volumes with creative cross promotional opportunities so that we may better serve our customers." The importance of strawberries was reflected in the group's 2002 sales numbers for berries in America. Strawberries accounted for $939.7 million in volume, followed by blueberries with $141 million, raspberries with $80.9 million, and blackberries with $21.2 million. The future for Global Fruit also appeared promising because of consumers' greater awareness of the health benefits of incorporating berries into their daily diet, supermarkets' creating permanent "Berry Patch" sections in their produce departments, the development of new varieties of berries able to survive in a variety of climates (thus allowing for greater availability of berries year-round), and innovations in shipping that provided reliable "cold chain" management to insure that a highly perishable product like berries could be reliably delivered at the highest quality. In order to better serve retailers and focus the company's marketing efforts, Global Berry began to move all of its products to the Naturipe brand in 2003.

Principal Competitors: Chiquita Brands International, Inc.; Dole Food Company, Inc.; Fyffes plc.

Chronology

• Key Dates:
• 1917: Central California Berry Grower Association is formed.
• 1922: Central California Berry Grower Association adopts the Naturipe trademark for its strawberries.
• 1936: Michigan Blueberry Growers Association is formed.
• 1980: Hortifrut, S.A. is established in Chile.
• 2000: MBG and Hortifrut create Global Berry Farms.
• 2002: Naturipe Berry Growers becomes a partner of Global Berry.