Rags to Riches: How Cull Fruit Can Reap Better Margins Than Perfect Fruit
This year has been one like no other. Every industry has had its challenges that have required pivoting in order to continue serving their clients. Harvesters and orchardists are no exception.
The Problem
Growing fruit is extremely labor-intensive and requires complete reliance on the harvest quality. Due to environmental factors, the fruit is at the mercy of what Mother Nature decides. A typical fruit grower will care for their fruit until harvest, have it picked, and then sold at farmers’ markets as well as export internationally at global prices. Returns on these yields have been trending downwards, causing pressure on the farmer as it continually drives a wedge into their bottom line.
Fruit has a short window of time of being utilizable before it is considered waste. Once it is beyond usage, it costs the grower due to no direct revenue from the efforts put into producing the product. Additionally, the amount of organic waste it creates can become a hassle, attracting unwanted animal guests as well as incurring costs for removal.
The season proved an exhausting dance between scorching hot days and downpours, which deeply affect the fruit quality and maturation process. Expectations in the market remain the same while the yields that make the cut become slimmer and slimmer.
As described in an article outlining the struggles faced by growers, “When you get a couple days of excessive heat, the fruit tree shuts down to preserve itself and that impacts the maturity of the fruit. We don’t get the consistency of size our market buyers are looking for and that becomes an issue,” (Gerding, 2018).
Harvesters faced with lessening yields are receiving less for what they produce. Their costs of growing and upkeep of the land however are unchanging and maintaining break-even status or lower will not sustain the grower long term. So how can a producer recoup more of their costs to remain sustainable?
Breathing Life Into Culled Fruit (And it's Margins!)
Increase the fruit’s shelf life? And how does one do this?
Create pasteurized juice!
Juicing involves pressing fruit that may be labeled as culls or imperfect. This fruit was never the level of quality to reach supermarket shelves but that’s what makes it perfect for juicing!
Fruit that is destined for the supermarket or farmers market is sold as-is for cents on the weight while once processed into juice can have some hefty profits attached. This farm-to-table approach gives fruit producers a wider range of consumer products they can offer as well as increase their distribution channels. Pasteurization allows the juice to be shelf stable without the need of refrigeration so it is set for transport. This opens up many different business opportunities for a farmer that used to only be able to sell at their local farmers’ market!
Cideries with heirloom apples have reported an average of receiving $0.43 cents per pound which do help to offset the cost of producing these types of apples. However, if there was a way to increase the margins of the fruit you were growing, would you be interested?
Well, yes! Most people would want to know that!
Juicing fruit is a practice that takes effort but is well worth its weight. An average estimate of fresh pressed juice is found to sell approximately at $6.10 USD per gallon.
Tell Me How
So how would you go from a fruit producer to a fruit processor? Two ways.
You could have your fruit processed onsite with a third party contractor. The upfront costs would be paying for the service of creating juice, depending on how much fruit you have. Then the juice would be sold back to you at wholesale prices. Now that you have that product, you can mark up as needed as sell as a farm to table solution.
The second option involves a full pivot in terms of your business. This would mean investing in fruit processing equipment so you can create juice on your own terms. This would also allow you to produce a variety of juices dependent on the types of fruit harvest you have. Spring could be cherry juice while the fall may yield fresh apple cider.
The upfront investment isn’t small but the returns are swift and fruitful! For example, a Single Belt Press KEB 500 is a commercial-grade solution that has the capacity to process up to 2400 lbs of produce an hour. That’s a lot of fruit! In terms of juice, you could expect approximately up to 750 L/hr of fresh-pressed juice. Using those market prices that were discussed earlier, a gallon of this juice would be priced at around $6.10 USD (R. Trovato, personal communication, January 2021). Now you’ve got yourself about 200 gallons of juice to offer to your market!
In terms of scaling up, if you were to press 100 hours, that would yield 75,000 L of juice or 19,800 gallons. This can lead to our next section, pressing opportunities!
Pressing Opportunities
This could show itself in terms of opportunities for your business and new markets. For example, a client of ours is a cold press juice supplier out of Seattle. This company is in high demand in the health and wellness market. With their investment in Kreuzmayr equipment, “the purchase of the belt press has allowed us to realize another level of business expansion to a private label.”
What does this look like for them? Private juice companies have been reaching out to them to contract their proprietary juice labor because pressing with a belt press makes more financial sense due to decreased labor and increased yields. In their words, “we use the bejeezus out of it!”. Talk to our team today about how we can do the same for your operation.
Bibliography
Gerding, B. (2018, February 13). Difficult year for Okanagan fruit growers. Retrieved November 10, 2020, from https://www.pentictonwesternnews.com/news/difficult-year-for-okanagan-fruit-growers/
Matassa-Fung, D. (2020, August 9). Okanagan facing shortage of agricultural workers. Globalnews.ca. https://globalnews.ca/news/7261231/okanagan-shortage-agricultural-workers/amp/.
Trovato, R. Interview. By Madison Sawka. January 13, 2021.