John and Wendy Tanata never said their kids had to eat their vegetables—they just had to grow them.
Beginning with a few pumpkins in 1989, the Tanatas transformed their small dairy and row-crop farm into a high-profit vegetable operation.
"If the kids wanted to farm, we would either have to run hard over thousands of rented acres or do something different," John Tanata says. "We chose something different."
Today, Vine Valley Farms near Stewart, Minn., supports four families on fewer than 1,200 acres. Along with the area's typical field corn and soybeans, the Tanatas grow winter squash, zucchini, green beans, cabbage, peppers, beets, onions and, of course, they still grow pumpkins.
Despite a steep learning curve, the Tanatas now maintain a 30% return on every vegetable they grow.
Local Is In. The Tanatas have hitched their cart to the "local food" movement, selling produce six months of the year to wholesalers in the Twin Cities who supply both retail and foodservice.
More urban consumers now seek local food for a variety of reasons: better taste, support of small-scale economies and even climate change—locally grown food leaves a smaller carbon footprint.
A self-described "people person," Tanata has built relationships with wholesalers. Early on, it was easy, he says. He'd make an appointment with a wholesaler, walk in and put a crate of his best vegetables on the desk and seal the deal with a handshake.
"Today, everything has to be more documented and scrutinized because of the food scares," he says. "No one wants a lawsuit."
"The Tanatas do a great job of marketing themselves to the big wholesalers as a locally owned fam-ily business," says Rick Christiansen, an agribusiness principal with LarsonAllen, a CPA firm, who works with Vine Valley Farms.
Family Affair. People management begins at home, and this farm will successfully transition to the second generation because John and Wendy empower their sons, Christiansen says.
"I give my sons a lot of rope to manage their departments," Tanata says. "I'm not going to be here forever, and they are going to have to run this business on their own."
Every Tanata family member supported by the farm has a defined role (daughters Jamie and Sara work off the farm). Eldest son Joshua has a degree in horticulture; he runs the packing shed, quality control and preparation for shipping. Middle son Adam has an agronomy degree; he is in charge of field operations and harvest crew management. Youngest son Anthony recently graduated with a business degree and helps with books and logistics.
Wendy works in payroll and bookkeeping, but also keeps an eye on quality: "When packaging our produce, I tell everyone to think like a woman walking into the grocery store: What would she like to see?"
John does all of the selling, which requires phone work and relationship building. He tries to stay clear of long-term contracts. "If the zucchini crop is short in Michigan and it moves up $5 in price, I want to capture the $5 move," John says.
He admits it took a while to become comfortable working without a contract. "The first time I walked into our cooler and saw 30 pallets of produce sitting there without a home, it was stressful," he says. "Over time, you learn to live on the edge."
Recently, for example, the family had 800 boxes of cucumbers in the cooler without a destination. So Tanata worked the phones and sold everything by the next morning.
Selling into a Downturn. The biggest challenge for Vine Valley Farms right now is how to grow in the current weak economic climate.
Ironically, the business is having a good year, which Tanata credits to market diversity. In the past, foodservice posted higher sales than retail, he says. This year, however, retail is leading because people aren't eating out as much.
"One reason our business is so successful is that we sell to both sides of the food chain," Tanata explains. "People have to eat, so we are going to get them as a customer on one side or the other."
Tanata believes his selling point will continue to be the fact that Vine Valley is a sustainable, one-stop shop for locally grown vegetables. But he is keeping an eye open for new marketing opportunities. "We aren't afraid of reinventing
ourselves again," he says.
Managing Migrant Labor
The heart and soul of Vine Valley Farms is the harvesting crew, made up of at least 30 migrant workers who move from southern Texas north through the growing season. The operation does not use the government's H-2A program because of the many fees, hurdles and red tape, John Tanata says.
The Tanatas have worked hard to understand the migrant culture and provide a good working environment. Because temporary housing for employees was hard to find in their rural area, the Tanatas bought an old motel on the edge of town and transformed it into housing. "That was the best decision we ever made," Tanata says. "The laborers appreciate the accommodations, and I just ask a couple of dollars a person per week to cover insurance, utilities and taxes for the season."
Showing respect and paying a fair wage help develop trust, Tanata says. That has allowed Vine Valley to fill its labor needs through word of mouth.
Top Producer, December 2009