Multi-generation management drives apple enterprise forward
Byron Borton entered the second-floor conference room overlooking his family’s Yakima Valley, Wash., apple orchards one recent afternoon and headed for a cardboard display packed with fruit. The chief visionary officer of Borton Fruit grabbed an apple and took a bite. The skin snapped, emitting that satisfying crunch.
“It’s bullet-proof,” explained Byron, who fell in love with the grapefruit-size Koru apple while on a due diligence tour across New Zealand. His hunt to find the best apple-eating experience for the next generation of consumers led him to the Southern Hemisphere, where popular apples such as the Gala, Jazz, Braeburn and Envy originated. “It just doesn’t decay that fast,” Byron says of the Koru. He once left one in his fridge for two months, and it came out perfectly crispy.
The Bortons might grow apples, but their 104-year-old operation, one of the largest apple orchards in the U.S., mirrors large row-crop farms in striking ways: leadership from a multi-generation management team, technological investments and unswerving attention to agronomic fundamentals. At the same time, the
Bortons represent what row-crop production might become in the future—highly vertically integrated, attentive to consumer forecasting years early and committed to expansion. The fact Borton Fruit has been continuously owned by the same family since inception gives them a flexibility they say is critical. They operate 6,000 acres of apples as well as some pears and cherries in the nation’s No. 1 apple-producing state, where the average orchard size is 100 acres.
“We feel that we can be a very good company that has good volume and is one of the most completely vertically integrated,” says Eric Borton, vice president of international sales and marketing.
The forward focus of the Bortons reflects trends in the national produce industry, which enjoys the halo effect of healthy food alongside the razor’s edge of changing demand.
“We continue to see an emphasis on quality and the right varieties. Taste is king. That’s very, very important,” says Kathy Means, vice president of industry relations for the Produce Marketing Association.
Multi-Generation Success. A productive orchard should yield fruit up to 30 years. As a result, growers in the industry—valued at $2.85 billion in 2014 apple production alone—play a high-stakes game of market intelligence.
Farmers who miscalculate the apple varieties consumers will want at the grocery store can quickly find themselves bleeding market share, so careful transition from one generation to the next is crucial to ensure continuity of supply.
“We have to adapt quickly to those opportunities in front of us,” says Andy Birley, director of warehouse operations and the son-in-law of co-owner John Borton. That’s especially true when cost of production per acre is up to $12,000.
One afternoon this past July, the sun beat down on the valley as Byron drove past rows of V-trellises that organize fruit-saturated trees. He rattled off varieties he believes will shrink in popularity, including Red Delicious, Golden Delicious, Jonagold and Macintosh.
Byron and his cousin, Eric, think about the future a lot. The two will take over the business from Byron’s father, Bill, who is director of farming, and Eric’s father, John, who as director of business operations oversees packing and shipping.
Bill acknowledges that while he and John have had disagreements over the years, clear division of labor allows each partner to be an expert.
At sales meetings, Bill presents an update on the quality of fruit in the field and production expectations, while John shares information on retailer needs and packing capacity.
“We started at about 200 acres, and I still have a small-farm mentality,” Bill says. Three years in the U.S. Army reserves in Alaska during the Vietnam War made him realize the values he enjoyed as a boy were ones he wanted to pass on to his children. “The young guys understand a lot better the scope of things.”
Similarly, John says he has learned that farm-business partnership requires collaboration and attention to one’s own area of specialty.
“We complement each other, and because we expanded, each one of us had been so consumed and busy in our own area that we’ve had a lot of trust and faith in each other to make decisions,” John says.
Technological Investments. From the orchards where Bill is most at home to the packing plant where John thrives, technological investment is everywhere.
In the field, overhead cooling and irrigation systems prevent sunburn losses in summer and frost formation in winter. Metal V-trellises organize trees that are 12 ft. tall and capable of producing a lot of fruit in a reachable space.
Indoors, color-coded computer monitors track how long retailers’ semi-trucks have been on site. The operation aims to load every semi within an hour.
Along the packing line, a conveyor-belt system holds individual apples in cups, which then drop fruit into corresponding boxes determined by a computerized sorter based on color and size. After a fire destroyed the Borton Fruit packing line in 1979, John and Bill doubled down to invest in new technology throughout the 1980s, purchasing the nation’s first computerized sorter. And aisle after aisle of cold-storage rooms capable of holding tens of millions of pounds of apples keep fruit in hibernation at a temperature just above freezing until shipping.
That innovation—coupled with rich volcanic soils, plentiful water and more than 300 days of sunshine—has supported the success of producers such as the Bortons, says Todd Fryover, president of the Washington Apple Commission.
Supply Chain Control. This highly vertical organization is common in the produce business, and more integration of the production chain is likely for large row-crop producers in the future, experts say.
“Farming has been getting more concentrated as long as there’s been a Census of Agriculture,” says Danny Klinefelter, ag economist at Texas A&M University. “Part is due to bigger equipment and more modern and automated technology; part because of better and more specialized business management teams; part because of the cost of regulatory compliance; and part because of consumer demand for more traceability.”
Row-crop producers are more familiar with other forms of vertical coordination, says Mike Boland, an agricultural economist at the University of Minnesota.
Under marketing contracts, farmers grow corn or soybeans based on the terms of a contract with an elevator.
In the future, row-crop producers might experience additional partners involved in that coordination such as retailers because of the influence of chain captains—major companies such as Whole Foods and Wal-Mart that seek niche products such as hormone-free beef.
“They’re dictating what they want on their label claims,’” Boland says.
Consumer Forecasting. For years, major retailers such as Wal-Mart and Safeway have increasingly relied on the Borton Fruit brand and other orchards like theirs to provide fresh produce year-round. Consumers want food that is produced with transparency, and that focus is especially acute as the federal government gives more attention to making the food chain more transparent, sustainable and perceived as safe. Final rules stemming from the Food Safety Modernization Act—which the Food and Drug Administration (FDA) has called the “most sweeping reform of our food safety laws in more than 70 years”—took effect at the end of 2015 and are prompting producers of fruit, livestock and more to make changes. The Bortons are among those ramping up traceability efforts.
Row-crop farmers often produce crops for livestock feed and ethanol, so they aren’t as likely to feel the effects of the food safety act as producers whose crops go directly for human consumption. Yet the implication for food producers is that regulators are more serious than ever about maintaining and enforcing a food supply perceived as safe.
“Anyone cutting corners will go out of business,” Means cautions.
At Borton Fruit, a new packing plant under construction about an hour roundtrip from headquarters will feature automated palletizing of apple bins that frees up more human team members to focus on quality control and food-safety reviews.
The team also is exploring technology that would allow each apple to be scanned electronically, pulling up information about its roots, genetic history and production path.
The Bortons have seen the writing on the wall. It’s why Byron and Eric are staking their future on apples such the Koru and the Rockit, a plum-size variety packaged in threes in a recyclable plastic tube.
Thoughtful planning against a backdrop of volatility is a reality all farmers know well. For the Bortons, that approach provides a framework for trying new things. The nation’s youngest consumers will eventually become their leading customers, and they aim to be ready.
Team Means Everything
Team member Francisco Figueroa is part of a workforce of more than 1,000 people. Borton Fruit invests in regular training for employees. Photo: Keith Effler
As the next generation of leaders at Borton Fruit, Byron and Eric Borton aren’t strangers to the complexities of running a business. To them, though, one factor that makes their jobs easier is the quality of the team the operation has assembled.
“You cannot get past the struggles, challenges and headaches without quality people,” Byron says. “They are the ones battling every day, doing great work and putting out fires. Not only will they work the long hours and take bullets for the company, many of them have seen it all. At Borton Fruit, we have several people who have been with the company for over 30 years. It’s their depth of knowledge and experience that really helps guide my strategic decisions within the company.”
In the field, Borton Fruit has 16 full-time crew leaders. Each guides a team of 30 members who pick, prune and hand-thin trees throughout the year. In all, the operation has more than 1,000 employees, the majority of whom are full-time workers. That means leadership must identify management talent early and cultivate them to lead teams of employees over a period of several years.
“A lot of guys look good on paper, but until they actually live it for three to five years, you’re paying to have them trained,” Byron says. “Just like planting an orchard, it’s a really long-term investment.”
That emphasis on quality has been driven by advance planning intended to secure consistent leadership, Eric points out. “The goal is to hire employees who are with us for a really long time,” he says.