U.S. Businessman in Chile Works From the Ground Up : Crops: He hopes to become a major cranberry producer--maybe even No. 1. He also wants to sell his product where few people now thirst for it.
California businessman Warren Simmons is betting big on cranberries. He’s investing millions of dollars to plant 1,000 acres of cranberries in this nation, where the fruit has never been produced commercially.
Simmons hopes to become a major cranberry producer--maybe even No. 1 in the world. He also hopes that juice from his crop can be sold in Europe or Asia--where hardly anyone now thirsts for the product.
Can it be done? That depends on many things, including bugs and bumblebees.
Simmons, 66, is the first to admit he is taking a plunge. He is not a farmer, much less a juice-maker or a mass-marketer. But he does have some impressive business successes behind him, plus some considerable capital to gamble. And he believes in bumblebees.
“If I start talking about bumblebees, I talk all day,” he says as he begins a tour through some of the farmland he is developing near Valdivia, in southern Chile.
A former airline pilot, Simmons started the Tia Maria restaurant chain in the early 1970s, then developed San Francisco’s Pier 39 commercial complex. With his son, Scooter, he founded Chevys Mexican Restaurants, which had 37 outlets when they sold out to Pepsico’s Taco Bell Corp. in 1992.
It was at Chevys that Simmons first focused on cranberries. He ordered fresh cranberries for making margarita cocktails but, as he recalls it, Ocean Spray Cranberries Inc. was unable to fill the order because of shortages.
After visiting Chile to explore the possibility of producing wine grapes here, he decided that cranberries could be more profitable.
American demand for cranberries is strong, while North American land suitable for growing them is in short supply. When the fruit was mainly used for sauces and jellies, there was plenty to go around. But Ocean Spray’s successful promotion of cranberry juice has expanded the market enormously.
The perennial cranberry vine, which spreads low over the ground in a tangle of thin runners and shoots, thrives in boggy, acidic soils. Those conditions are found mainly in Wisconsin, Massachusetts and New Jersey. But American legislation to preserve natural wetlands has severely curtailed expansion of cranberry bogs.
Cranberries also are grown in “upland” fields that are specially adapted with irrigation and sprinkling systems. This type of cultivation has been successful in Washington and Oregon, but increasingly strict limitations on the diversion of river waters are making expansion of cranberry lands difficult there too.
Canada has been contributing 7% or so of the supply of cranberries in recent years, but Canadian environmental restrictions also limit new planting. Meanwhile, popular belief in the medicinal value of cranberry juice, especially against urinary tract infections, has helped keep American demand growing.
In the past few years, agricultural researchers have found that cranberry plants grow well in southern Chile, which has a cool, rainy climate similar to that of the Pacific Northwest. So far, no one has produced cranberries here for export, but Simmons plans to begin doing so in 1996.
As for those bumblebees: One problem cranberry growers face is pollination. Honeybees often fail to show up for work on rainy or overcast days. But bumblebees, Simmons says, work rain or shine; using them to pollinate cranberries can increase fruit yields by 28%.
He plans to put in flower beds--borage, cat mint, bee plant--around his cranberry beds to attract bumblebees. When the cranberries are in bloom, the flowers will be cut, leaving only cranberry blossoms for the bumblebees.
“We will bring in a bumblebee expert and we will propagate our own colonies,” Simmons says. “To get a 28% higher yield, I’ll do anything.”
That clearly is Simmons’ style: Do what it takes, cost what it may. He already has hired Elden Stang, a horticulture professor from the University of Wisconsin, as technical adviser for his company here, called Cran Chile.
Stang, one of a handful of top American experts on cranberries, took a year’s leave of absence from the university last July to work with Simmons in Chile. Stang’s wife, Judy, supervises a laboratory where tiny pieces of cranberry plant are propagated in a gelatin-like medium of vitamins, minerals, growth hormones and sugar.
The laboratory shoots then grow roots in a greenhouse, where they are redivided. The lab and greenhouse are producing over 6 million plants a month, Stang says, making the micro-propagation operation one of the largest in the world.
Cranberries do not reproduce from seeds. In the United States, new plants are grown from vine cuttings, but strict Chilean regulations for importing plants made it impossible to bring in enough cuttings for a project like Cran Chile. So Stang, 54, helped Simmons set up the center for micro-propagation with technology that had never been used for reproducing cranberry plants on a large scale. “The man had amazing faith to do this,” Stang says.
One advantage to micro-propagation instead of imported cuttings is that diseases common to cranberries in North America are kept out. “We’ve seen no diseases,” Stang says. Cran Chile planting began in October and continues at a rate of about five acres a day. Touring three farms where work is taking place, Simmons stops where bulldozers, backhoes and tractors prepare sunken planting beds the size of football fields. The beds are side by side with roadways in between.
Most cranberry crops in the United States are harvested by flooding the growing beds with water. The berries float to the surface, where they are more easily gathered in. Simmons will harvest his crops from mobile bridges that span the planting beds to avoid any harmful pressure on the plants, he says. “The biggest thing is to save stress on the beds.”
Cranberry vines take four to five years to mature. The average for cranberry yields in the United States is 160 to 180 barrels an acre (a barrel is 100 pounds). Some land in Oregon has yielded more than 600 barrels an acre.
By the year 2001, when he has 1,000 acres of mature vines in production, Simmons hopes to be harvesting 300 barrels of cranberries per acre. That would be a total of 300,000 barrels, more than any single producer now harvests. “Our weather, we hope, duplicates Bandon, Oregon,” he said. “They have the highest yield of anywhere in the world.”
Simmons does not say how much he is investing. But the Chilean financial newspaper Estrategia estimates pre-production investment for cranberries in Chile at up to $16,000 per acre--$16 million for 1,000 acres.
Simmons says he hopes to find a juice-maker to turn his berries into concentrate. If no one is interested, he said, he will invest in a juice plant himself.
But he says he needs to contract with a large marketing organization to sell the juice. He says he has approached several companies. “I didn’t even get an answer to my letters,” he complains, but his optimism seems undaunted.
“The Germans like a tart drink,” he says. “I think they would like cranberry juice. I think Germany is the ideal market.”
He says he is reluctant to put his cranberries on the American market, because the additional availability might depress prices, but he will do so if he can’t sell them in Europe or Asia.
At least one other company is planning to grow cranberries for export in southern Chile. Partners in the venture include Americans Thomas Kehler, Don Mowat and Jon Lindbergh, son of the late aviation pioneer Charles Lindbergh.
Simmons admits his is a big bet, one he could lose. “There’s just a chance there’s a bug down here that thrives on cranberries,” he says. “If some bug eats all my cranberries, I’ll shrug my shoulders and walk away. But if I make money on it, I want to keep growing.”
