Church Brothers: 'Innovation is seeing what is needed'
Washed and sliced salad in a bag is an example of disrupting innovation. Before one of the Church Brothers from California conquered it, people bought whole heads of lettuce with soil between the leaves. Doing things differently, or innovating, is in the Church Brothers' family DNA.
Innovating business from field to fork
The Church Brothers have been a big part of leading changes in how leafy greens go to market. For example in the early 1980s they pioneered the form, fill and seal machine, which made it possible to sell washed, ready-to-eat salad.
In addition, the Church Brothers also innovated the way their business is organised into a vertically integrated operation: from field to product delivery. 'To meet the needs of our customers we have to operate on a big scale,' says Brian Church, Vice President Agriculture Operations. Our customers want to offer their chefs and consumers a wide assortment of vegetables twelve months a year and seven days a week. If you are a small farmer, you can't say: 'I'm afraid we won't have that in the next few weeks, we've had bad weather.' The large retailers and foodservice distributors want a guarantee that they can rely on our products at all times. To maintain control of everything that happens to a vegetable before it reaches our customer: cultivation, harvesting, storage, refrigeration, packaging, transportation – we want to have influence over every link of that value chain.'
‘We want to have influence over every link of the value chain.'
Controlling the value chain
Retailers expect consistent quality and pricing all year round for fresh produce. 'Seasonality is disappearing', Church says. 'You can buy strawberries for example, year round. We have to be able to guarantee the right quality, on-time delivery and the right prices. Innovation is not always about the big technological changes. The point is to see what is needed and reflect this. You have to try new things to differentiate yourself, and in order to survive.'
A range of businesses are vertically integrated under the Church Brothers' umbrella including growing, harvesting, processing, cooling, sales, marketing and logistics. 'From genetics to farming to commodity shipping to processing and retail and food services, our insight into information and data collecting has been completely changed by modern technology,' Church says. 'More and more data are becoming available – and we are using these.'
Predicting future demand
'We are getting more, improved insights into the demand forecasting process and flexible production methods', Church says. 'There is less waste now because supply and demand are connected via computing models. Waste is expensive. For example: when there is a storm coming on the East coast, we know there will be a plunge in demand. During the last big storm in New York, people stayed home. We can anticipate this and adjust our harvest plans. Predicting future demand and syncing it with production helps us be more cost-effective.'
Past the blur
Rabobank strives to encourage the integration of business in the entire food and agri sector. The bank was thus involved in the approach that the Church family has taken at an early stage. Hakan Erdinc, Area Manager for Rabobank California says: 'We didn't have full visibility of the supply chain. When you are only handling one company within the supply chain, it's hard to tell whether it's a profitable business or not. There are simply too many factors you're not aware of and can't see. For the bank, the visibility gets kind of blurred.'
This is why Rabobank sat down with several companies including Church Brothers LLC., CV Harvesting and First Street Cooling in 2012. 'What we wanted was to understand the supply chain in its entirety', says Erdinc. 'We wanted them to connect all the dots in order to get a clear picture of where the value drivers were and who gets what. A few years later, we are financing the whole supply chain instead of just one link. We understand their operations a lot better now.'
Church Brothers offers a wide variety of products, ranging from direct-field pack vegetables and leafy greens to processed salad blends that are ready-to-eat such as spring mix, kales, iceberg, romaine and arugula. Church Brothers has developed proprietary items such as heirloom red spinach and wasabi arugula. To keep their customers supplied year round, they farm 30,000 to 35,000 crop acres annually in the California regions of Salinas Valley, Huron, Oxnard, Imperial Valley, and also in Yuma, Arizona and Central Mexico.