The Carrot Kings : Bakersfield Triumvirate Is Tops in the Field
Carrots are on the move all around here, uprooted by gigantic, self-propelled harvesters that travel faster than a man can walk and enable three workers to pick 75 tons--roughly a million individual carrots--in one hour.
Trucked to packing sheds, the carrots become a bobbing sea of orange in a maze of conveyor belts, coolers, scrubbers, slicers, sizers, peelers and baggers. Less than 24 hours after being wrenched from the ground, they’re ready to hit the road.
“Don’t you get sick of carrots?” Bob Grimm of Grimmway Farms is asked as he looks down at the slow-moving ribbons of orange that crisscross his plant in every conceivable direction and at every possible angle. “I don’t have time to think about it,” he replies.
Indeed. The carrot’s time has arrived--and with it Bob Grimm, his brother Rod (they are known locally as “the Brothers Grimm”) and two other major growers that form the crop’s Big Three, a not-so-chummy fraternity around Bakersfield.
Once considered small potatoes in the supermarket produce section, carrots barely held their own against more exotic fare. They were grown and shipped by hundreds of small operators largely unschooled in the kind of marketing and self-promotion pioneered by California raisins and Florida oranges.
“They were just there--kind of flat, if you know what I mean,” says Ed Odron, a produce vice president at Lucky Stores.
The drab image faded when growers came up with the wildly popular--if misnamed--fresh “baby carrot,” a two-to-three-inch, pre-peeled section from a bigger carrot that consumers could not get enough of.
In just a few years, these mini-carrots have achieved a popularity that speaks volumes about lifestyle and dietary changes in America.
They are convenient, they’ll last for weeks and they’re low in fat and calories. A stream of credible medical studies has linked beta carotene--the pigment that makes carrots orange--to the prevention of heart disease, strokes and some forms of cancer. Today’s carrots are bred to have twice the beta carotene of a decade ago.
All this has jacked up nationwide demand for the carrot in its various forms by 40% since 1985, even as costly efforts to tap into the exploding market have knocked scores of competitors out of the “carrot deal,” as growers call this corner of agriculture.
That has left the Big Three to dominate the deal. Together, Grimmway Farms, Mike Yurosek & Sons and the biggest of all, Bolthouse Farms--family operators all--shipped 80% of California’s carrots and accounted for half the record $338-million U.S. carrot market last year.
“I would say we have an oligopolistic industry,” acknowledges Dave Yurosek, who has taken over Yurosek & Sons from his father Mike, now retired.
Overall, California’s growers and shippers supplied a total of 62% of the burgeoning U.S. market last year--up from 50% in 1980.
But the state’s long drought and competition elsewhere have made that growth track a scramble. California farmers have expanded acreage by two-thirds, acquired large fleets of harvesters and thrown up expensive new automated packing sheds.
Even big corporations have been unable to keep up in this arena. Dole Food Co. lags well behind the Big Three, and Grimmway recently paid a reported $8 million to buy the carrot arm of Shell Oil Co.'s Belridge Farms, a major farming operation that the oil company got with its $3.65-billion purchase of Belridge Oil Co. in 1979.
Carrots aren’t rocket science, necessarily. But they do demand attention to fast-paced marketing developments, along with quick action on such technological wrinkles as machine vision, which spots bad carrots and blasts them off the conveyor belts with laser-like shots of air.
It is all very expensive.
“That’s why everybody and their grandmother isn’t in the business,” says Bob Grimm, who bought his machine-vision system last year with $400,000 in borrowed money. “If we tried to get in it today, we couldn’t. But that system will pay for itself in two years. We used to have 150 people doing that work.”
The Grimms, who grew corn and carrots as teen-agers in Anaheim and sold them from roadside stands, arrived in Di Giorgio, near Bakersfield, in 1981. They are the newcomers. The Yuroseks got into the carrot deal in 1939, down in Santa Clarita, and later moved to nearby Lamont. Bill Bolthouse, another lifelong carrot man, moved his carrot enterprise to Bakersfield from Michigan in 1973.
Kern County has replaced the Imperial Valley as the state’s top carrot region, but the three mega-growers produce carrots from strategically chosen fields in both areas, as well as regions farther north. They also buy from about 150 small growers in the state.
The harvests are timed to cover all 12 months, and the acreage is planned to exploit the especially profitable times of the year when other carrot states--mainly Michigan, Florida and Texas--are out of business.
The Big Three’s dominance mirrors what has happened in several other segments of California agriculture--a narrowing of competition that some people fear tempts price fixing.
Not so, Bolthouse says: “It’s illegal. We don’t do that.”
Besides, this does not appear to be a terribly amiable trio, especially since the espionage case.
When Bolthouse designed and built a carrot-harvesting machine about seven years ago, he says, Yurosek & Sons flew an engineer out from Michigan who spent weeks “sneaking around” at night and on foggy winter weekends, sketching and measuring the enormous--but, alas, unpatented--machine as it stood idle in the Bolthouse fields.
“Yurosek stole all the technology from us,” Bolthouse says matter-of-factly. “One of my employees was in cahoots with him. We didn’t really know it until it was too late and we saw his machine. I said, ‘Holy smokes, this thing is a clone. Nut for nut, bolt for bolt!’ ”
Replies Yurosek: “He’s more dramatic than I am. We had a lot of ideas and went out and confirmed it on his machine.” Asked if he would call this a friendly competition, Yurosek pauses and says, “I’m going to say yes. “
In any case, continues Bolthouse, “Now they all have them. That really allowed Yurosek and Grimmway to catch up with us, and it’s been a key element in this consolidation.”
Indeed, at $380,000 per harvester--the Big Three have at least 20 of the 18-ton contraptions plying their carrot fields up and down the state--a lot of growers dropped out of the deal.
And many who didn’t pull out over the harvesters have folded their tents since, unable to scrape up the ante for the newest game in carrot town--the reputed baby variety.
In the late 1980s, a New Jersey firm called DNA Plant Technology had started peddling three-ounce bags of celery and carrot sticks--bred for extra crunchiness--as snacks for the health-conscious.
This competition inclined Yurosek to heed his wife after a three-hour carrot-peeling marathon in the family kitchen.
“Can’t you do something about this?” she demanded.
Yurosek thought ready snacking might be a use for his “culls"--the split or broken carrots that normally ended up as frozen sticks or livestock feed.
So he adapted a manufacturing system long used to process carrots before they’re precooked and frozen:
Each carrot is cut into three or four sections of 2 to 3 inches. The sections are then tapered and peeled in a revolving drum with a sandpaper-like action, resulting in items that look just like little carrots--and are perceived as such by most consumers, according to Lucky’s Ed Odron.
Sales of the fresh crunchies took off about three years ago, and Bolthouse and Grimm followed suit with big investments in new equipment. Grimm says he has spent $15 million to produce the baby carrots.
Now, the three czars grow carrots specifically for this purpose, planting seeds at twice the usual density to limit the thickness of the roots and harvesting them about 10 to 20 days earlier than normal.
But they’re still not baby carrots.
(“Don’t tell anyone that!” jokes Odron.)
Only Grimmway Farms--noting that the cooked, frozen versions have been called “whole baby carrots” for many years--actually labels its packages as baby carrots.
Not about to be out-dueled again, Bolthouse registered the name “Short Cuts,” giving him exclusive use of what is arguably the best label.
“It’s like Jell-O to gelatin, and they’re the gelatin,” he laughs.
Bolthouse adds that it is at best misleading to call the little carrots “babies” as Grimmway does, though Bolthouse also labels his packing boxes “Baby-Cut Carrots.” “I don’t know why the state hasn’t slapped his wrists,” Bolthouse wonders aloud.
“That sounds like Bill,” Grimm replies.
Actually, nobody would want a true baby carrot, according to Vince Rubatzky, a horticulturist at UC Davis. Sugars don’t start to develop until the later growth stages in vegetables such as the carrot.
“These are manufactured babies,” Rubatzky says.
Nonexistent five years ago, the little chubs now account for about 20% of California’s carrot output--and at least 40% of carrot revenue. A one-pound bag of fresh babies will command $1.29 or more, triple the retail price of a bag of regular carrots.
And the baby carrot’s salad days have only just begun.
The carrot moguls, chased by their smaller competitors here and elsewhere, are racing to introduce little three-ounce bags of babies for school lunches and office snacks. They also are trying to place them with fast-food restaurants, baseball concessionaires and airlines.
Yurosek says his baby carrots soon will represent half his production. And all three insist that the gains have not come at the expense of regular, full-size carrots.
How far can the moguls go? Apparently, there are limits.
Too many carrots can turn the skin orange. Ranchers cut back on carrot feed for their cattle some years back after a restaurant chain complained of orange fat on its steaks, according to Grimm.
Another challenge is that not every market is ready for the carrot mania that has swept America. The California Fresh Carrot Advisory Board tried without much success to take on the Japanese market a couple of years ago. It received such a cold reception that the Big Three are still unhappy.
The carrots were left on the docks for several weeks--"long enough for them to lose their snap,” says Bolthouse, a blunt-spoken sort. “You can’t do business with those people.”
UC’s Rubatzky says California sent the wrong kind of carrots. The Japanese don’t eat fresh carrots and prefer theirs with a reddish tint and a thicker profile, “three times our size, which they slice and cook,” he says.
“We sent them our Bugs Bunny carrots,” Rubatzky explains.
Still, there are other markets to conquer. And this is a root with legs.
“I don’t think it’s a Hula-Hoop. I think it’s here to stay,” says produce executive Odron.
“I pull up to a stoplight the other morning and there’s a woman in the next car, and I see her put in her mouth a baby carrot,” he recounts. “I think: ‘Oh my God, look at that.’ I feel like rolling down my window and giving her a high five. This is hot stuff for us produce people, you know. You can just see this thing explode.”
What’s Up, Doc?
California is the center of the America’s carrot industry, accounting for 62% of U.S. production in 1992, in terms of the prices paid to growers. Most of the growing is clustered around Bakersfield.
1992 Grower Revenues (In millions of dollars):
United States: $338 million
California: $209 million
Source: U.S. Department of Agriculture