2 Oxnard Produce Companies Team Up in Seed-to-Shelf Venture

Fresh Prep Inc., an Oxnard produce-processing operation, cranks out about 80,000 pounds of fresh-cut mixed salad, carrot sticks, celery sticks and other fruit and vegetable products daily.

That may sound like a bunch of produce, but Raymond Lech, president of Fresh Prep, said his 50 employees and 20 processing machines are capable of handling about five times that amount.

With that in mind, Lech has sold half of his operation to Boskovich Farms, an Oxnard-based grower with 17,000 acres of vegetables. Boskovich Farms grows lettuce, broccoli, celery, cauliflower, carrots and other produce in California, Arizona and Mexico.

Both sides anticipate that the transaction will greatly increase their presence in the rapidly growing fresh-cut segment of the produce industry.

“They are going to give us a good marketing and distribution arm, handling the marketing of the product in state and out of state,” said Lech, who founded Fresh Prep in 1986. “We will really be able to go ahead and increase our sales.”

Joe Boskovich, vice president of Boskovich Farms, said his 81-year-old business now will be able to focus on what it does best--growing--and leave most of the processing to Fresh Prep. Boskovich Farms has contracted with Fresh Prep to process some of its produce and has been doing some of its own processing.

“We have a spinach operation in Oxnard, and we’ve been doing some with other vegetables, but nothing compared to what Fresh Prep does,” Boskovich said. “The beauty of it is, Fresh Prep already has a current customer market rather than us having to get into the business ourselves.”

Fresh Prep wholesales its products, under its own label and under the labels of its client growers, to fast-food restaurants, schools and other institutions in California. Lech said he hopes to increase sales both nationally and internationally and would like to begin selling to supermarkets. He said the new partnership should enable him to reach those goals.

Both Boskovich and Lech said the partnership also will give them more control over their products.

“Now we are going to have control from seed, to growing, to packing, to selling as a finished product,” Lech said. “I have not had control of my raw product, and it made me realize that partnering up with a grower would be a good idea.”

The Fresh Prep-Boskovich Farms venture illustrates a trend in the fresh-cut produce business, said Ken Hodge, editor of the Yakima, Wash.-based trade publication “Fresh Cut.”

“Partnerships are where it’s at these days,” Hodge said. “People are leveraging their positions by becoming partners with other people who have market advantages that complement their own skills and abilities.”

Hodge said the estimated retail value of U.S. produce in 1995 was $60.4 billion. About $8.5 billion, or 14% of that, came from the fresh-cut segment of the industry. In 1994, he said, the overall value was $58.4 billion, with fresh-cut produce accounting for $5.2 billion, or about 9%.

According to the Virginia-based International Fresh-Cut Produce Assn., the industry estimates that in 1999, fresh-cut produce will represent $19 billion, or nearly 26%, of a predicted $73.9-billion produce industry.

“I’ve heard the growth [of fresh-cut produce] described as explosive,” Hodge said. “It’s the concept of convenience, coupled with freshness and the healthful nature of fruits and vegetables that has been kind of a winning combination. People have been doing this for 50 years, but it’s just in the recent past that things have started to peak.”