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Keep Apples in the Family

November 2, 2011
By: Ed Clark, Top Producer Business and Issues Editor
Keep Apples in the Family
Winter damage took its toll on Minnetonka Orchards, so Craig, Michele, Lowell and Phyllis Schaper are planting replacement apple trees.  
 
 

This orchard hones in on profit centers to grow for the next generation

Given the number of innovative changes Minnetonka Orchards has undergone since its inception in 1976, it comes as no surprise that the Schaper family is putting together a creative plan

to keep the orchard in the family.

Lowell and Phyllis Schaper have pruned and trimmed their business plan like they have their thousands of apple trees in Minnetrista, Minn. The result is a fruitful and long-term plan that will benefit the next generation that owns the orchard.

Business Evolution. The Schapers brought the property in 1971 and spent five years figuring out what to do with it. They considered other enterprises, including subdividing it for housing tracts. "But we realized that we didn’t want to look down on other houses," Lowell says.

They tried growing hay, but discarded that idea because they had no livestock. They finally decided that growing apples would be the best use of the land. To fund the purchase of the trees, the Schapers used their own savings and income from Lowell’s job as a commercial pilot. "It started out as a hobby and sort of got out of control," he says.

From 1976 to 1982, Lowell had two full-time jobs: the orchard and being a pilot for Braniff Airlines. The latter ended when Braniff went bankrupt, though he flew for other airlines until the late 1990s.

Initially, Minnetonka Orchards’ growth was modest, planting several hundred trees per year and starting with the McIntosh, Cortland, Haralson, Paula Red, Honeygold and Regent varieties.

It hasn’t always been easy, and sometimes the Schapers contemplated getting out of the apple

business altogether. "In the early ’80s, we had a severe winter and lost a lot of trees," Lowell says. "But we made the decision to replant. We had invested so much at that point. It kind of pulls you in."

Refining Profit Centers. Throughout the years, the orchard has radically changed, from one that just grows apples to one that emphasizes fun and has up to 5,000 visitors per day on weekends from the neighboring 2.5 million–person metropolitan area. The Schapers learned that about half of the visitors, who pay a $4 entry fee, want to pick their own fruit. They now charge $18 per peck for pick-your-own, which comes to about $1.80 per pound.

But apple picking is only one of the Schapers’ profit centers. They also have a 5,000-sq.-ft. tent for weddings, hold hayrides and sell donuts, hot dogs, locally grown maple syrup and a variety of apple products such as caramel apples, cider, apple pies and apple crisp.

Lowell estimates that at present, apples provide 25% of Minnetonka Orchards’ profits. The other major profit centers are weddings, the retail barn, school tours and sales of pumpkins (which the orchard does not grow).

One reason the Schapers are so innovative in developing new profit centers is that they want to bring more family members into the operation. The plan by is to transfer shares of their multi-thousand-tree apple orchard bit by bit.

"We will sell some to our son Craig and daughter-in-law Michele, and gift some, but we want to be fair to two other sons and a daughter who are not as interested in the business," Lowell says. "We are working with our attorney to gift some shares."

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FEATURED IN: Top Producer - November 2011

 
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