KERN Journal Business
Vol. 2, No.1
Local growers feed Frito-Lay plant Page 6
Value-added agriculture issue
Value-added ag bolsters industry By Andrew Pederson
s a bank that has been lending to agribusiness for more than 100 years, Rabobank has witnessed many of the industry’s ebbs and flows. This past year, when meeting with farmers, ranchers, processors and other agriculturalists around the state, we’ve continued to express optimism about California agriculture in general and the Central Valley specifically. While certain sectors of the industry continue to struggle, Rabobank maintains that California is a great place to farm. The overall viability of agriculture in the state is strong. As we move forward, it’s important that all of us in agriculture – from the farmer to the banker—look for opportunities where our industry can improve and become more efficient with resources. “Value-added agriculture” plays an integral role in this quest as we identify how to take crops that have existed for hundreds of years and utilize them in ways that add value and strengthen bottom lines. By expanding value-added agriculture in areas, such as Kern County, we can continue to ensure strong and prosperous regions, where jobs are abundant and communities thrive. We can provide the nation and world with wholesome, sustainable food. Inside this edition of the Kern Business Journal, readers will find articles providing a general outlook for Kern County’s many value-added agriculture endeavors. Turn to page 15 for Rabobank’s detailed review of specific agriculture sectors. — Andrew Pederson is Rabobank’s senior vice president, regional agribusiness manager for Kern County.
Kern Business Journal P.O. Bin 440 Bakersfield, CA 93302
Photo courtesy Grimmway Farms
Carrots are harvested by Grimmway Farms from a field near Bakersfield, Calif.
Bakersfield among nation’s ‘Best-Performing’
he Bakersfield-Delano metropolitan area is ranked 19th on the Milken Institute’s annual index of “Best-Performing Cities,” which measures the growth of jobs, wages and technology output of the nation’s 200 large metropolitan areas and 179 smaller metros over a five-year span. Bakersfield jumped 28 positions from its place on last year’s index. In the major metro category, Bakersfield-Delano was
Presorted Standard U.S. Postage PAID Bakersfield, CA Permit No. 758
17th in wage and salary growth from 2009 to 2010, and fifth in tech output expansion for the period ending in 2011. “Bakersfield is benefiting from rising oil production and increased investment in alternative energy, which has diversified the area’s energy industry and created highskilled, better-paying jobs,” the institute reported in January. “The agriculture sector, food production in particular, has been lifted by higher
INSIDE Business-at-a-glance..................................3 Husband’s Nuts are big ..........................10 Nutty festival planned..............................10 Ice cream plant world’s largest.................14 Paramount Cuties....................................16 Pistachios are ‘king’................................17 International Fruit Genetics .....................18 Sun World’s branding...............................20
commodity values, while firm prices for crude oil have helped to keep the local energy sector healthy,” wrote researchers, who noted that further development of Tejon Ranch, which is home to warehousing facilities for major corporations, such as Caterpillar, IKEA and Famous Footwear, “will continue to fuel nonresidential construction, as recently illustrated by the increase in engineering jobs.” Bakersfield-Delano was the only large Central Valley metropolitan area to be rated in the list’s “top 25.” Modesto was ranked 199th, Stockton 189th, Sacramento 182nd, Visalia-Porterville 168th and Merced 119th. Fresno was not included in the Milken study released in January. — Kern Business Journal
KCCD operates ag center.........................22 Bolthouse targets innovation....................26 Grimmway’s creative carrots.....................27 Murray Farms is ‘value-added’..................28 Wineries give Tehachapi flavor .................29 Ostrich meat catching on.........................30 Small bugs, big business.........................40 Culhane: Part-time workers......................41 In the Oil Patch.......................................43
KERN BUSINESS JOURNAL
KERN Journal Business
Showcasing Kern County business and industry Vol. 2, No.1 February/March 2013 Kern Business Journal is published by The Bakersfield Californian. Copies of the bi-monthly journal are available from The Bakersfield Californian, Kern Economic Development Corp. and Greater Bakersfield Chamber of Commerce. Publisher Ginger Moorhouse President/CEO Richard Beene Senior Vice President Revenue and Marketing John Wells Editor Dianne Hardisty Kern Business Journal Sales Mira Patel Art Director Glenn Hammett To submit a story email@example.com To advertise and subscribe Mira Patel 661-395-7586 firstname.lastname@example.org Follow on Facebook Facebook.com/ KernBusinessJournal Follow on Twitter @kernbiz
KERN BUSINESS JOURNAL
Innovative growers, producers adding billions in value to region’s agriculture
alue-added agriculture isn’t exactly a household phrase, but you will find it in almost every kitchen you enter these days. And you can thank Kern County growers and food processors for the “value-added agriculture” innovations that are making our lives and menus more interesting, convenient and healthier. A carrot is a carrot. Right? Well, what’s up doc in the carrot business these days are products called “baby carrots,” that are shaped into bite-sizes; sliced carrots that resemble Ruffles potato chips; and vitamin-packed juices and dressings. There seems to be no end to the transformation of a vegetable that can be eaten raw or cooked into a delicious dessert or side dish. And Bolthouse Farms and Grimmway Farms are two Kern County food giants locked into an innovation race to prove the carrot’s increasing worth. And consider the lowly nut. In Kern County, those would be mostly almonds and pistachios. Slice ’em, dice ’em, pound ’em into flour. It’s Dianne Hardisty all done in Kern County – one of the world’s top almond and pistachio growing and exporting counties. But Kern County’s list of “top crops” does not stop there. The region is a top producer of table grapes and potatoes, which are eaten around the globe. This issue of the Kern Business Journal showcases the accomplishments of Kern County’s large corporations, such as Paramount, Grimmway, Bolthouse and Sun World, as well as mom-and-pop busi-
nesses that are adding billions of dollars in value to already valuable local crops. “Agriculture has long been at the heart of Kern County’s economy,” noted Richard Chapman, president and CEO of the Kern Economic Development Corp. “Recently, new emphasis has been placed on the potential economic benefits of ‘value-added’ agriculture for Kern County.” “The value of Kern County agricultural production has more than doubled from $2.3 billion in 2001 to $5.4 billion in 2011, not counting food manufacturing, where employment increased 62 percent,” noted professor Mark Evans, who chairs the Economics Department at Cal State Bakersfield. “Agriculture creates more than 50,000 farming and manufacturing jobs in Kern County. According to a U.S. Bureau of Labor Statistics, 19 percent of employees in crop production are in management, business and financial occupations. In food manufacturing, 5 percent of jobs are in these occupations,” Evans said. The bi-monthly Kern Business Journal is a product of the Specialty Publication Division of The Bakersfield Californian, with the cooperation of the Kern Economic Development Corp., the Greater Bakersfield Chamber of Commerce and the County of Kern. Future editions will showcases Kern County’s other robust industries: Health Care, April; Aerospace/Aviation, June; Energy (Oil and Gas), August; and Commercial Real Estate, October; and Water, December. To submit a news article or suggest a story, email email@example.com. — Dianne Hardisty is the editor of the Kern Business Journal.
Richard Chapman said Richardson will present a critical analysis of California’s current business climate and highlight Kern County’s advantages. Chapman noted that New Mexico and Kern County have similar economies, which include energy, mining, aerospace and tourism. Last summer, Richardson served as a consultant for the Mojave Air and Space Port in eastern Kern County. The March 20 economic summit will be held at the Doubletree by Hilton from 7 a.m. to noon. For more information and to register to attend, go to www.kedc.com. --Kern Business Journal
Photo courtesy of Tejon Ranch
A bird’s eye view is given of Caterpillar Inc.’s new distribution facility in the Tejon Ranch Commercial Center.
Caterpillar Inc. facility officially opens in Tejon Ranch Center Caterpillar Inc. held a ceremony in January officially opening its 46-acre, $50 million parts distribution facility in the Tejon Ranch Commerce Center, along Interstate 5, at the foot of the Grapevine. The 400,000-squarefoot warehouse accepted its first product delivery in August and sent out its first shipment in October. The project is part of Caterpillar’s plans for a $2 billion global upgrade of its parts and distribution network, which includes closing smaller facilities. The warehouse will serve dealers in California, Arizona, Nevada and New Mexico. --Kern Business Journal
Airport activity reflecting Kern’s economic recovery If activity at Kern County’s Meadows Field Airport is any gauge of the region’s economic recovery, Airports Director Jack Gotcher has reason to be optimistic. Gotcher reported enplanements at the county’s international airport in 2012 increased roughly 6.6 percent over the previous year. Rental car data, which was available only through the end of November, increased 11.9 percent over the same period. “Parking lot data shows that we had more
revenue with fewer cars, probably indicating passengers were staying for longer trips,” Gotcher said, adding that parking revenue in 2012 was “up 9.1 percent over 2011, and about 32.6 percent over 2009, our worst year.” In 2012, the total number of people getting on and off commercial flights at Meadows Field was 271,046. In 2011, the total was 254,200. In 2007-08, before the Great Recession hit, the total was more than 300,000. Gotcher said he is optimistic that the improving numbers indicate Kern County’s economy is on the mend. --Kern Business Journal
Bill Richardson headlines Kern March econmic summit Former New Mexico Gov. Bill Richardson will be the keynote speaker at this year’s Kern County Economic Summit. A former Democratic candidate for president, Richardson has served as a congressman, a U.S. ambassador to the United Nations and energy secretary under former Democratic President Bill Clinton. Richardson captured headlines in January when he accompanied Google’s Eric Schmidt to North Korea to discuss missile activity, detained American Kenneth Bae and Internet openness. Kern Economic Development Corp. CEO
Bakersfield home ‘recovery’ noted Bakersfield’s home market appears to be in “full recovery mode” thanks to a tighter supply and fewer foreclosures, according to the Crabtree Report. The median price of a home sold in Bakersfield in December — $160,000 — was almost 7 percent higher than November’s level, and nearly one-fifth greater than December 2011’s median of $134,950, appraiser Gary Crabtree reported. In the second quarter of 2006, the city’s median home sale price peaked at $293,000. Having fewer homes on the market contributed to the market’s “amazing” strength, Crabtree wrote in a note accompanying his preliminary December report. He observed that 515 homes were actively listed in December — about 14 percent less than were sold in November, or 44 percent fewer than December 2011’s total. Meanwhile, only 247 Bakersfield homes were foreclosed in December. That’s 38 percent less than in December 2011. Crabtree called these and other December data “very good news” that supports the need for new home construction and the jobs such activity brings. It also suggests that “the market has nowhere to go but up.” --Kern Business Journal
Rail cars hauling Bakken crude to oil-rich Kern County The shale-oil boom in the Bakken formation in and around North Dakota is being felt even
in oil-rich Kern County. Tanker rail cars are hauling discounted shale-oil crude to refineries throughout the country, including refineries in California and Kern County. With construction of sufficient pipeline capacity to deliver the Midwest oil a distant hope, a “pipeline” of rail cars is clicking along the nation’s main routes, including those that run through Bakersfield. Bloomberg News reported in January that Warren Buffett and Carl Icahn are reaping the benefits. Buffett’s Union Tank Car is working at full capacity and Icahn’s American Railcar Industries has a backlog through 2014. Trinity Industries, the biggest rail car producer, began converting wind-tower factories last year to help meet demand for train cars that can transport the petroleum product. Rail carloads of crude tripled last year to more than 200,000. Matt Rose, CEO at Fort Worth-based BNSF Railway, reported that his railroad moved more than 500,000 barrels of oil a day last year and would reach 700,000 barrels a day in 2013. BNSF is also owned by Buffett’s Berkshire Hathaway. --Bloomberg News and Kern Business Journal
Photo by Felix Adamo
Oil tanker cars line the tracks in the Bakersfield switching yard.
KERN BUSINESS JOURNAL
Kern County’s rich agriculture base makes value-added ag a natural fit By Richard Chapman
ern County plays a major role in providing the state and nation’s food supply. In 2011, the county ranked third in the U.S. in terms of agricultural production. The $5.36 billion in production value is a substantial 13 percent increase over the previous year. Over 55,000 people--20 percvent of the total workforce--are employed in the largest industry sector in Kern County. Agriculture has long been at the heart of Kern County’s economy; recently, new emphasis has been placed on the potential economic benefits of “value-added” agriculture for Kern County. Value-added agriculture is the transformation of agriculture products to a higher value for the ultimate consumer. Within the last few years a remarkable industry transformation has occurred as Kern County has added and expanded its high-tech production facilities. In fact, many similarities exist with Kern’s other behemoth industry — oil — as technology improvements and corporate acquisitions
Top U.S. ag counties for production Rank Value 1 Fresno $6.9B 2 Tulare $5.6B 3 $5.4B Kern 4 Monterey $3.9B 5 Stanislaus $3.1B Data extracted from individual County Agricultural Crop Reports, 2011
helped increase productivity of regional operations. Some of the best-known examples of value-added agriculture are already deeply-rooted in Kern County. “Baby carrots” were first developed in Kern County, for example. Carrot juice processors, which utilize locally-grown carrots, call Kern County home, as does Frito-Lay and Dreyer’s, which process and package locally-harvested potatoes and dairy products, respectively at their Kern County facilities. Locally-produced products like POM Wonderful Pomegranate Juice, Wonderful Pistachios, Bunny-Luv Baby Carrots,
Acres harvested by commodity group Vegetable 75,130
— Richard Chapman is president/CEO of Kern Economic Development Corporation
Kern’s top 10 commodities in millions
(Total harvested acres - 874,559) Nursery 2,121
and Cuties California Mandarins are well-known national brands. In the past five years, over half a billion dollars has been invested locally in value-added agriculture expansion projects. Here are some successes from 2012: • Paramount Citrus, a division of Roll Global, spent about $200 million to build a 640,000- square-foot plant for its popular “Cuties” brand of clementine mandarin oranges. Company officials say it is the largest citrus packing plant of its kind in the world. • Califia Farms, founded in 2010 by the CEO of Odwalla, opened a 60,000- square-foot juice and nut-milk production facility in unincorporated Kern. • Sunny Gem and Primex Farms completed multi-million dollar expansion projects of nut production facilities. • Bolthouse Farms was purchased by the Fortune 500 firm Campbell Soup Company for $1.6 billion. The future looks bright in 2013 as local industry continues to successfully transition from strictly harvesting-related activities to enhanced production methods to marketing practices. Kern County is fast becoming the epicenter for agricultural innovation and entrepreneurship.
Fruit and nut 385,319
Kern County Agricultural Crop Report, 2011
Kern County Agricultural Crop Report, 2011
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KERN BUSINESS JOURNAL
KERN BUSINESS JOURNAL
Frito-Lay’s Kern plant meets increasing demand
Photo courtesy of Brian Kirschenmann
Kern County potato grower Brian Kirschenmann watches his potatoes being sorted at an Asian processing plant.
Risky, but rewarding
By Stephen Ray
rito-Lay has been a proud part of the Kern County community for nearly three decades. The Kern facility opened in 1986 as a 160,000-square-foot state-of-the art site showcasing innovative technology and new approaches in teamwork to help Frito-Lay continue to meet the growing demand for its iconic snacks — from Lay’s potato chips to Fritos corn chips to Tostitos tortilla chips. Kern offered several advantages that made it the perfect location for FritoLay’s newest plant: Frito-Lay has long prided itself on making its snacks with real, high-quality farm-grown ingredients. Kern offered proximity to exceptional farmers, as well as strong railway and interstate freeway systems to transport raw materials to the plant and deliver finished snacks quickly to market. It guarantees our customers and consumers the freshest, highest-quality snacks possible. Strong support from local government and a talent pool that could meet our hiring needs also made Kern the ideal location for the plant. In fact, Frito-Lay received nearly 14,000 applications for 400 positions when the Kern facility first opened. A lot has changed for Frito-Lay since its opening. The facility has undergone two significant expansions, growing to 400,000 square feet and now including 10 manufacturing lines, more than 70 packaging machines, a fleet center and a warehouse. The facility now makes nearly three times as many snacks annually as it did in 1986, thanks to the dedication and commitment of nearly 600 employees. Frito-Lay added new snacks to its lineup over the years, including Baked! Lay’s in 1995, Rold Gold pretzels in 1996 and Tostitos Scoops in 2001. Yet the same qualities that first attracted Frito-Lay to Kern remain just as critical to the company’s continued success and make Frito-Lay Kern one of the $13-billion snack maker’s premier facilities nationwide. Local growers Buttonwillow Land and Cattle Co. and Kirschenmann Farms are Continued on page 7
Exporting potatoes to Asia By Jason Davenport and Brian Kirschenmann
rossing a street in Vietnam’s Ho Chi Minh City is a risky experience that most foreign pedestrians try to avoid. But despite the risks, on a recent trip, Jason Davenport and Brian Kirschenmann boldly maneuvered through oncoming, non-stop traffic without flinching. If you flinch, drivers sense your hesitation and you will never get across. The “traffic experience” is similar to the “business experience” of shipping potatoes for chip processing from Kern County to Asia. Over the past eight years, the two local growers have tried not to flinch as they have embarked on their risky business journey. The Asian market for U.S. fresh and chipping potatoes has been growing substantially in recent years. The consumer demand has increased nearly 20 percent per year in many Asian countries. Combine this strong Asian demand with limited access to locally grown potatoes, a weak U.S. dollar, and the existence of infrastructure and logistics systems capable of shipping U.S. potatoes to Asia and you have created a global market for Kern County potatoes. Traveling to Asia to assess the arrivals of their potatoes is necessary for the growers to fully appreciate the complexity of shipping to markets so far away. Each shipment of potatoes takes nearly 30 days to arrive at Asian destinations. When the same potatoes are sent to domestic processors, it takes only one or two days to reach the U.S. destination. During the 30-day transit to Asia, numerous challenges may be experienced: Chipping potatoes can rot because they must be shipped at warmer temperatures than fresh, general-use potatoes. Chipping potatoes must be able to fry with desirable color and low sugars. Too much sugar will fry dark and result in a potato chip that appears to be burnt. Potato shipments might contain a pest that poses a phytosanitary risk to the destination country. Foreign customs officials will deny entry to these potatoes. As a result, entire containers of cargo have been dumped in Asian landfills, or shipped back to the U.S. When this happens, growers experience the sharp pain of loss that is similar to being struck by a car in Ho Chi Minh City. But is the risk of setbacks worth the rewards of shipping Kern County potatoes to Asia? With the right audacity, crossing a dangerous street can actually be a lot of fun and even an exhilarating challenge. Likewise, shipping hundreds of containers of potatoes to Asia requires you to be bold. You have to look forward without flinching. You must be deter-
Californian file photo
Brian Kirschenmann is one of the local growers helping FritoLay meet increasing demand for potato snacks.
mined to reach the other side of the street safe and unharmed. You must understand and accept the risks. With the proximity of Kern County to the Port of Los Angeles, Brian Kirschenmann of Kirschenmann Farms and Jason Davenport of Allied Potato have utilized their key location and knowledge of growing potatoes to develop critical partnerships with customers abroad. These partnerships have helped develop process improvements that can be credited for increasing demand for U.S. potatoes in Asia and stabilizing the quality of the potatoes upon their arrival. This improved quality is satisfying the rising Asian middle class consumers’ taste for chipping potatoes. Investments in farming technologies have increased the likelihood that potatoes will arrive in good condition. Investments in logistics and infrastructure will be needed to ensure that the Asian markets will continue to expand. Better roads, larger ports – and maybe even a few stoplights and crosswalks on city streets – will help advance opportunities for U.S. growers to ship their commodities to Asia. — Brian Kirschenmann of Kirschenmann Farms and Jason Davenport of Allied Potato export potatoes from Bakersfield, Calif., and Pasco, Wash., for a continuous yearround supply of export grade potatoes for chip processing.
KERN BUSINESS JOURNAL
Photo courtesy of Frito-Lay
Potatoes pass along a conveyor belt in Frito-Layâ€™s Kern plant.
Photo courtesy of Frito-Lay
Local growers supply potatoes for snacks produced at Frito-Layâ€™s Kern plant, west of Bakersfield.
Continued from page 6 strong partners, providing fresh crops that help Frito-Lay meet its high-quality standards and continually growing demand. Frito-Layâ€™s standards for the potatoes used to make its snacks are among the highest in the food industry. These growers ensure our ingredients are planted, grown and harvested with the utmost attention to detail and quality. Employees have also helped make Frito-Lay Kern one of the leading sites among the companyâ€™s nearly 30 manufacturing facilities across the U.S. Their commitment to continually learning and applying new skills, ability to adapt to change and dedication to making the highest-quality, best-tasting snacks for our consumers enable Frito-Lay to
continue to thrive and grow. Over the years, they have helped earn prestigious awards from the company, industry groups and the government for commitment to safety, environmental sustainability, diversity and inclusion, and business excellence. Team membersâ€™ dedication and commitment also extend to the community, where they have volunteered countless hours, raised valuable funds and donated Frito-Lay snacks to local not-for-profit organizations, including the American Cancer Societyâ€™s Relay for Life, Toys for Tots, The Great American Cleanup in Bakersfield, outreach events at local schools and more. Over the last 25 years, the site has donated more than $1 million to the United Way, in turn sup-
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porting local not-for-profit agencies. As part of PepsiCo, resource conservation and other environmental sustainability efforts are also a key priority at Frito-Lay Kern. Team members are engaged in these efforts day-in and day-out. Co-generation technology allows FritoLay to produce its own electricity, while also creating steam that can be used to power manufacturing needs. Frito-Lay has its own waste treatment technology, meaning it does not have to use the municipal sewer system. FritoLay is committed to being a â€œzero-landfillâ€? site, meaning almost every piece of waste generated at the plant is reused or recycled. For example, Frito-Lay sends potato peelings and cornhusks to livestock farms for use as feed. Clearly, the remarkable people and attributes of Kern County have been keys to Frito-Layâ€™s success. The company looks forward to continuing its outstanding partnership with Kern and building an even brighter future together. â€” Stephen Ray is the manufacturing director of FritoLayâ€™s Kern facility. He was assisted in writing this article by Nick Calciano, warehouse manager, and Greg Offutt, safety manager.
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KERN BUSINESS JOURNAL
Buttonwillow ranch celebrates 150th anniversary By Catherine Merlo
t took 150 years to earn it, 18 months to plan it, and one day to revel in it. The 150th anniversary celebration of the Tracy Ranch of Buttonwillow, Calif., held last April, marked a rare sesquicentennial milestone among the state’s 81,000 farms and ranches. For the Tracy clan, the event helped validate the struggles of five generations to keep the ranch afloat. Now a thriving, diversified farming operation spanning 9,000 acres in Kern County, Tracy Ranch has come a long way since Ferdinand Tracy homesteaded here in 1862. Today’s family owners clearly relish their pioneering history and hard-won holdings. But they’re also well aware that success and survival in 21st century California is as fraught with uncertainty as it was when the first four generations were struggling to sustain their agricultural endeavors. “The ranch is a lot of responsibility,” says Michael Frey, a fifth-generation family member and ranch partner. “Times are good now, but they haven’t always been. And it could all collapse tomorrow if we lost our water. Everything we have is on the line at all times. We do what we can to manage that risk.” These days, the ranch’s approach to survival largely hinges on crop diversification. Under its modern name, Buttonwillow Land & Cattle Co., the partnership grows almonds, pistachios, potatoes, carrots, corn, alfalfa, wheat and cotton. No more than 20 percent of its acreage is planted to any one crop anymore. That’s a far cry from the livestock grazing that dominated the early years of Tracy Ranch, or even the mid-1970s when 70 percent of its acreage was planted to cotton. Today, cotton – hit hard by soaring production costs -- accounts for less than 10 percent of the operation’s rotation. The ranch also partners on two cattle feed lots with a combined capacity of 55,000 head in the Texas Panhandle. In addition, it’s ventured into commercial real estate, with full or part ownership in office buildings in Bakersfield and an ocean-side hotel in Pismo Beach, Calif. Almonds and pistachios have emerged as the ranch’s profitable leaders. First planted in 1996 by unanimous decision of the partners, the almonds took four years to mature before they reached their first commercial harvest. This year – seven years after they were planted — the youngest pistachios will produce their first marketable crop. The two nut crops occupy the biggest share of the ranch’s cropland at 1,400 acres each. The potatoes are grown on contract for Frito-Lay and In-and-Out Burger, a popular fast-food chain in the western U.S. FritoLay’s Kern County plant sits less than a mile from Buttonwillow Land & Cattle Co.’s potato fields. “You don’t hit a home run when you grow on contract, but you do get a consistent, solid performance,” Frey says. “Today, we grow enough potatoes to keep that plant supplied for two months straight.” The carrots are marketed to Kern County’s Grimmway Farms, as well as Bolthouse Farms, which was recently purchased by Campbell Soup Co. Behind the crop diversification are 10 family-related partners who oversee the enterprise. Five are fourth-generation first cousins: brothers Bill and John Tracy, brothers Wes and J.B. Selvidge, and Larry Frey (Mike’s father). Now in their 60s and early 70s, they’ve been partners since 1971, when they returned to the ranch fresh out of college and formed Buttonwillow Land & Cattle Co.
Photo courtesy of Catherine Merlo
Mike Frey holds potatoes in one of his ranch’s fields during a recent harvest.
Photo courtesy of Catherine Merlo
Photo courtesy of Catherine Merlo
Equipment harvests potatoes at the Buttonwillow Land and Cattle Co.
The other five partners are fifth-generaEarlier generations of the Tracy famtion members Mike and Jack Frey, Todd and ily would probably recognize the old home Rob Tracy and Jason Selvidge. All 10 partplace near Buttonwillow, where Ferdinand ners live on the ranch or within a 25-minute Tracy’s original homesteading shack, the drive. Each has his own 19th century barn and the area of oversight. The group tall eucalyptus trees they meets once a month to displanted still stand. But in cuss ranch operations. Votes other ways, the Tracy Ranch are taken only on major of the 21st century could issues. hardly be more different. While the other ranch There are more crops on partners focus on growing more acres, a potato packand harvesting the crops and ing shed, computers, and acquiring and maintaining tractors that use GPS-guidequipment, Frey handles the ance systems. Crops grow operation’s financial side. Up on laser-leveled land and orat 5:30 every morning, he chards rely on sophisticated — Todd Tracy follows global commodity drip irrigation systems. markets on four computer But challenges remain, screens in his ranch office and is tied closely with none as worrisome as the future of the to his mobile phone. He’s in charge of hedg- ranch’s water supply. “It’s the same problem ing the ranch’s commodities, which also for anybody farming in California,” Frey means watching the oil market. “The ranch says. Underground pumping and surface spends $1 million a year on fuel,” he says. deliveries from the California Aqueduct He also works with bankers and attorneys on irrigate the ranch, but the reliability of that contracts and leases, and manages the health water remains vulnerable to drought, enviinsurance for the ranch and its nearly 50 full- ronmental demands and legal rulings. Ranch time employees. partners Todd Tracy and Jason Selvidge stay
“Farming in California gets harder and harder,. The ranch saw lean times years and years ago, and it made it through. I think we’ll make it, too.”
Fourth generation partners Todd Tracy, left, and Mike Frey stand in front of the ranch’s original 19th century barn.
close to the water situation by serving on local water district boards. Other challenges include the stringent state and federal regulations that govern water and air quality, food safety and labor management, keeping the ranch under a relentless microscope. “Farming in California gets harder and harder,” acknowledges fifth-generation member Todd Tracy, who oversees the pistachios, among other crops. “The ranch saw lean times years and years ago, and it made it through. I think we’ll make it, too.” Frey, who spearheaded the ranch’s 150th celebration, thinks the ranch’s real trump card for survival lies in the family itself. “Our family rallies around each other when adversity happens,” he says. Only time will tell what the future holds for Tracy Ranch, Frey adds. “Every generation of our family has brought something new to the table and built it from the previous generation,” he says. “It’s fun to imagine what might be next.” — Bakersfield-based writer Catherine Merlo is Dairy Today’s western and online editor. A version of this article appeared in the December 2012 edition of Farm Journal Media’s Top Producer magazine.
KERN BUSINESS JOURNAL
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KERN BUSINESS JOURNAL
Her husband’s nuts have become ‘big business’ By Jennifer Rogers-Etcheverry
t’s hard to believe that this year will mark the 10th anniversary of my business, which originated from a discussion about the family budget. In December 2002, my husband, an almond farmer, began to unleash his annual “money talk.” Having heard it so many times before, I stood up and said, “You always say it is going to get better and it never does. What do I have to do? Sell your nuts for you?” As the family sat around laughing at the idea, my brother said, “Hey you should sell them and you should call it ‘My Husband’s Nuts’.” Over the past 10 years, I have shared that story many times, particularly when people ask me how I came up with such a name for my business. And I am amazed by how many other farmers’ wives have told me that they have experienced the same “money talk” and thought about selling their husband’s nuts, as well. Many people believe my husband helped me get started. But it was quite the opposite. Although he has always been supportive, he was a bit skeptical in the beginning. He even insisted that his name not be attached to any piece of paper relating to the business’ incorporation. No problem, I said. After deciding to move forward with the idea of selling his almonds, and being denied a small business loan, I turned to the next most important man in my life, my dad. Together we came up with a budget that we soon surpassed, created a label and found
Photo by Jessica Frey
Jennifer Rogers-Etcheverry sells nuts grown by her husband, Mark.
Photo by Jessica Frey
The lonely tractor is framed by almond trees in full bloom.
a company who is “the best” at seasoning almonds. (Don’t ask me who that company is because, even today, I still won’t share that secret.) Knowing nothing about nutrition labels and UPC codes, I dove in and started learning. There’s no book available that explains how to sell your husband’s nuts. I began knocking on the doors of local businesses and found them to be welcoming. Within our second year, the local newspaper, The Bakersfield Californian, published an article about my business, which expanded my company’s reach beyond the city’s limits. Soon we were being featured on ABC’s “The View,” which gave us national
recognition. Today our products are found across the country. Three years ago, after meeting Random Acts of Kindness founder Dr. Chuck Wall, I was introduced to the world of public speaking. I have shared my story with business schools, clubs, farm bureaus and other organizations. It has been a blessing and something I never would have imagined 10 years ago. My Husband’s Nuts does not have a consistent market place, which allows us to enter not only grocery stores, but also such locations as hotel lobbies, boutiques, mini markets, high-end kitchen stores and wineries.
I am often asked what my biggest achievement has been so far. I would have to say it has been shipping our products overseas to our troops, who send me amazing photos in return. We post the photos on our website, www.myhusbandsnuts.com. For many businesses, 10 years is a long time. But I believe that we are only just getting started. This business has given me the amazing opportunity to stay home with my children, while supplementing the family income. My youngest child will be graduating high school this spring. My oldest is attending college and working towards an agriculture-business degree. With many new and exciting ideas on the burner it will be fun to see where we will be in another 10 years! — Jennifer Rogers-Etcheverry is the founder of My Husband’s Nuts.
Kern County celebrates its ‘nutty’ industry By Beth Brookhart Pandol
ern County grows over 250 crops. But when the organizers of a major agricultural festival considered all the choices to celebrate, the nuts won. The idea for the 2013 Kern County Nut Festival, scheduled for June 14-15 at the Kern County Museum, was a natural. Kern County grows almost 152,000 acres of almonds, over 65,000 acres of pistachios and 832 acres of walnuts. Kern is consistently ranked at or near the top in California in almond and pistachio production. Almonds were the number-two agricultural commodity in Kern County for 2011. Focusing on the versatile and healthy culinary aspects of nuts, the main day of the festival on June 15, from 10 a.m. to 7 p.m., will feature a wide variety of foods — from salads to desserts — sold by local restaurants, caterers, vendors and non-profit groups. A host of “nutty” activities and entertainment is also planned for children and adults. The festival will begin on June 14, with an adults-only Nutty Night of Nonsense, a wild and wacky evening of foods, cocktails, comedy, magic, mayhem and nonsense. (All rated PG-13.) “The Kern County Nut Festival promises to have an enormous benefit on Kern County tourism and local business that only a regional event of this type can bring,” said Roger Perez, executive director of the Kern County Museum. The long-range plan is for the Kern County Nut Festival to eventually rival other
big California commodity festivals, such as the Gilroy Garlic Festival. In 2012, the Gilroy festival awarded $325,000 to 175 nonprofits from its proceeds, and has distributed almost $10 million over 34 years. The 2011 figure for the Stockton Asparagus Festival was over $5.5 million. Festival co-chairwoman Sheryl Barbich notes that assembling the right people and businesses as sponsors, participants and committee members is critical to creating a successful event. About 100 community members are on the Nut Festival’s organizing committee. They include representatives from Boys and Girls Club, Kern First Five, Kern County Superintendent of Schools, Kern County Farm Bureau, Premier Almonds, Paramount Farming, Mercy and Memorial Hospitals - Dignity Health, Jim Black Construction, Famoso Nut, BARC, Pacific Ag, Dewalt Corp., Bakersfield Police Department, and many more. Kern County businesses have embraced the festival by becoming sponsors with over
$150,000 raised by late 2012. Top tier sponsors include The Bakersfield Californian Foundation, Famoso Nut, Paramount Farming Co. and Mercy and Memorial Hospitals - Dignity Health. “This project aligns with the Dignity Health mission to enhance the lives of those living in Kern County through a targeted focus on wellness and healthy lifestyles,” explained Robin Mangarin-Scott, Dignity Health’s strategic marketing director. “The nutritional benefits of nuts will be a big part of the event, as well as the chance to educate the public on diet and healthy living.” One of the key lessons adopted from other agricultural festivals was to let nonprofit groups and local businesses make money. There will be no charge to participate as a food seller or activity manager. Nonprofit organizations can earn money by selling a nutty food or operating a nutty game or activity. The Kern County Museum will take 20 percent of the revenue, leaving 80 percent for the nonprofit. For-profit restaurants, ca-
terers and food sellers can retain 75 percent of their take, with the museum receiving 25 percent. In addition to events and activities, such as the Boys and Girls Club’s “Club Nut,” a trendy area for teens that features music and foods, the Boy Scouts’ pedal tractor obstacle course, and the Volunteer Center’s nutty bingo event, the festival will include top-notch vendors of packaged nut foods, cooking products, jewelry, arts, crafts and other items. But above all else, the festival will be about the food. Local chefs and cooks have been testing and tasting recipes for months, just to find the right dish to sell at the festival. For example, Alex Gomez, head of food service for Bakersfield College, said he has been experimenting with an almond chicken sandwich made with local carrots and fresh baked bread. “It is important to promote valley agriculture, bring people to our area to see what is grown here and enjoy different offerings created with these products. And, it’s good to have culinary students who are training to be chefs get involved and to learn about the local agriculture,” Gomez said. Tickets for the Kern County Nut Festival and Nutty Night of Nonsense will be available at the Kern County Museum, 3801 Chester Ave., or online at Vallitix. Call 661-868-8411 for more information or visit www.kcnutfest.com. — Beth Brookhart Pandol is a member of the Kern County Museum Board and co-chairwoman of the Kern County Nut Festival.
KERN BUSINESS JOURNAL
KERN BUSINESS JOURNAL
KERN BUSINESS JOURNAL
February/ March chamber events
wo Bakersfield-based chambers of commerce organizations have scheduled member and community events during the months of February and March.
Greater Bakersfield Chamber of Commerce Feb. 12 — “Board Development for Non-Profits,” from 11:30 a.m. to 1 p.m. at the chamber offices. Speaker: Steve Sanders, Kern County Superintendent of Schools. $30 chamber members; $60 non-members; boxed lunch included. Feb. 27 — “Social Media Therapy,” from noon to 1 p.m. at the chamber offices. $30 chamber member; $60 non-members; bring your own lunch, drinks provided. March 12 — “Grant Management Tools” seminar, from 11:30 a.m. to 1 p.m. Speaker: Sara Futrell Baron, Kern County Superintendent of Schools. $30 chamber members; $60 non-members; includes a boxed lunch. March 14 — Small Business Networking Breakfast: “How you can do business with large companies,” from 7:30 to 9:30 a.m. at the chamber offices. $25 chamber member; $50 non-members; includes a continental breakfast. March 20 — Economic Summit, from 7 a.m. to noon, at The DoubleTree by Hilton. For more information, contact Sally Ann Selby at 862-5150. March 27 — “Social Media Therapy,” from noon to 1 p.m. at the chamber offices. $30 chamber members; $60 non-member; bring your own lunch, drinks provided. March 28 — Business Showcase from 5 to 7:30 p.m. at the Bakersfield Marriott. Call the Chamber of Commerce at 327-4421 for a booth space application and availability. Admission $5. For additional information about these events, go to the chamber’s website www.bakersfieldchamber.org.
Kern County Hispanic Chamber of Commerce Feb. 13 — Business Networking Mixer hosted by Brown Armstrong CPAs from 5:30 to 7:30 p.m. at Metro Gallery, 1604 19th St., Bakersfield March 13 — Business Networking Mixer hosted by the Bakersfield Country Club and HA Sala from 5:30 to 7:30 p.m. at the Bakersfield Country Club. For more information about the Kern County Hispanic Chamber of Commerce and events, go to the website www.KCHCC.org.
KERN BUSINESS JOURNAL
Bakersfield ice cream plant enjoying ‘sweet success’ By Dianne Hardisty
Dreyer’s, Nestle and Carnation names. In 2005, Dreyer’s, which now is Nestle’s U.S. ice cream subsidiary, invested another $100 million in the Bakersfield plant. The expansion more than doubled its size and added ice cream lines that could churn out 70 million gallons a year, or about 7 percent of the nation’s annual ice cream production. Still believed to be one of the world’s largest ice cream plants, the Bakersfield facility was named Food Engineering
hen the Carnation ice cream plant opened in Bakersfield in 1988, it was lauded as the world’s largest. But some industry observers and competitors called it a boondoggle, a bloated white elephant that could glut the ice cream market. Conceding the plant might be a “technical success,” they predicted it was doomed to be a “business failure.” Upon the plant’s opening, Arthur Blanding, a rival plant designer, told The New York Times, “I think they paid perhaps $40 million too much for what they got.” Contending the innovative and automated Bakersfield plant “did not automate enough,” Blanding said, “I suspect that it will turn out to be marginally profitable and you will see it for sale in eight years.” Carnation and its parent company, Swiss-based Nestle S.A., were betting their investment of $80 million to build a state-of-the-art ice cream plant in Bakersfield would shake up the competitive balance in the huge American ice cream market, particularly the niche for novelty frozen desserts. At the time, Carnation was Californian file photo rated third, behind Dreyer’s A tray of cones is placed on a Drumstick conveyor line at the Dreyer’s ice cream facility Grand Ice Cream Inc. and Kraft in Bakersfield. Inc., the maker of Breyers and Sealtest ice creams. The plant Carnation built on 47 acres of land along District magazine’s “Food Plant of the Year” in 2006. Boulevard in southwest Bakersfield featured high-tech assembly The Bakersfield Californian reported in December that the lines that could easily and quickly add new products and adjust plant now produces desserts with the following labels: Dreyer’s production. It also featured an employee “team” concept that Grand Ice Cream; Dreyer’s Slow Churned Ice Cream; Dreyer’s allowed the plant to be operated with fewer workers and less Slow Churned Yogurt; Dreyer’s Sherbet; Nestle Drumsticks supervision. Cones; Skinny Cow Bars, Cones and Cups; Dreyer’s Smoothie The new plant was a commitment by Carnation to stay and Bars; Dreyer’s Fruit Bars; Dreyer’s Orange and Cream Bars; compete in the volatile world ice cream business, which was no Nestle Tollhouse Cookie Sandwiches; Dreyer’s/Edy’s 3-gallon longer comprised of regional companies. Rather the industry had (for restaurants and parlors); Carnation Sandwiches; Pushups; evolved into dominance by large corporations. and Dreyer’s Dibs. That was nearly 25 years ago. Mergers and acquisitions have reshaped the ice cream industry. And the Bakersfield plant is — Dianne Hardisty is the editor of the still going strong, now churning out products that feature the Kern Business Journal.
Webinars scheduled to help start-up companies By Kelly Bearden
he Small Business Development Center at Cal State Bakersfield will host a series of business webinars every other Wednesday during 2013 during the lunch hour from 12:05 to 1 p.m. The webinars are free to business owners and residents in Kern, Inyo and Mono counties. Others must pay a $39 fee to participate. Webinars are a quick and convenient way to obtain information on a variety of business management topics over the Internet. They are accessed via a computer with an Internet connection. The webinars will also be offered in remote locations throughout the three-county area, where participants can gather and view the information on large screens. Check the SBDC website www.csub.edu/sbdc for updated locations. Business webinars will focus on the following topics: Feb. 6 — The initial webinar will focus on crowdfunding and will be presented by Kelly Bearden. Crowdfunding is a popular strategic approach to funding business projects through the support of a large number of people donating to specific projects via the Internet.
Feb. 20 – “Start or Grow Your Business,” by Angel Cottrell. The webinar will provide ideas, and legal, marketing and financial tools for growing a small business. March 6 – “Your Home Cottage Food Business,” by Kelly Bearden. New California law permits certain food businesses to operate out of a home, rather than a commercial kitchen. March 20 – “Creatively Funding Small Businesses,” by Jay Thompson. The webinar will suggest ways to raise money to grow or start a business. The Small Business Development Center at Cal State Bakersfield is an off-campus program that offers no-cost, high quality business consulting, as well as topical business webinars, classes and conferences. Space is limited to participate in the webinars. For a complete listing and to register online, go to www.csub.edu/sbdc. For additional information, contact the center at 654-2856 or email firstname.lastname@example.org. — Kelly Bearden is the director of the Small Business Development Center at Cal State Bakersfield.
KERN BUSINESS JOURNAL
â€˜Guarded optimismâ€™ for Kern agriculture in 2013 verall, agriculture in Kern County experienced another strong and profitable year in 2012 in crops specific to the region, with some sectors still struggling to gain stability. This has led to guarded optimism for 2013.
as stockers were sent to feedlots earlier than in past years. Cattle prices are expected to rise to record levels this year, as the herd is reduced and the fed cattle pipeline is cleared. Grazing conditions improved with early rains this season. If feed conditions do not improve in the U.S. overall, livestock operators will find it necessary to reduce production levels.
Fruits, Nuts and Vegetables
Milk prices are stabilizing after several challenges in 2012, including severe temperatures and high feed costs that impaired production conditions. Many operators, especially those without their own feed crop production and/or other crop diversification, suffered notable losses in 2012. Dairy herds in California were already being culled, before feed costs skyrocketed with the Midwest drought. Hay prices have only fallen modestly. Overall margins are expected to improve in the latter half of 2013, as the U.S. herd is reduced, assuming export and domestic demand remain strong and feed crop conditions improve worldwide.
Vegetable prices improved in the summer of 2012 as producers reduced plantings in response to poor prices during the first half of the year, and reduced production in the Midwest and East due to the drought. Fruit prices were stronger this past year, benefiting those producers who did not suffer significantly from the hail and freezing conditions last spring. Despite slowing economies locally and abroad, nut sales are expected to remain strong in 2013, due, in part, to robust exports. The 2012 almond harvest went smoothly, with a good quality crop. The only drawback was high heat in September, which lowered production estimates from 2.1 billion pounds to 1.8-1.9 billion, due to moisture loss. The 2012 pistachio crop is expected to be the largest in history, despite some downgrades in estimates. The cold temperatures this winter have been good for most trees, but citrus producers are struggling with
By Andrew Pederson
Other Livestock Poultry producers have reduced production and continue to be negatively impacted by the high feed costs. Beef prices declined from their highs in 2012,
freezing temperatures. It is likely that crops will have similar damage levels as last year.
Wine and Wine Grapes California wine grape growers will benefit from much higher prices this year, as wine sales improve and yields appear good during 2012. The weather problems in the wine grape crops on the coast in 2010 and 2011 have sharply reduced inventories. Plantings of new vineyards in California continue to increase. Wineries report significant reductions in their finished inventories, though consumers are resisting a full return to the higher retail prices wineries enjoyed before the recession.
Field Crops Hay and cotton producers are enjoying good prices above historical averages, although they are not as high as they were in 2011. Corn and other grain crops will do very well this year due to the continuing severe drought conditions across the Midwest.
Weather and Water Temperatures finally moderated late last fall providing relief to people and livestock. Harvest conditions were ideal, absent of any significant rains. Most
reservoirs are at historic averages or better, despite the poor precipitation levels early last year. This is good news going into the new water year, in case it proves to be dry again.
Labor Many producers reported limited shortages of labor in California. Fruit and vegetable producers are apprehensive about future labor availability due to the improving economy in Mexico and possible federal regulatory changes requiring stricter worker documentation. At Rabobank, N.A. we have access to the International Food & Agribusiness Research and Advisory (FAR) group, a global team of more than 80 analysts who monitor and evaluate global market events that affect agriculture worldwide. These analysts are internationally respected experts in everything from protein to produce, inputs to oilseeds, and their knowledge is shared regularly with Rabobank, N.A. customers. â€” Andrew Pederson is Rabobankâ€™s senior vice president, regional agribusiness manager for Kern County. Rabobank assumes no liability for any incurred financial losses or gains made from any actions taken as a result of suggestions taken from the predictions made within this article.
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KERN BUSINESS JOURNAL
Paramount’s Get Crackin’ campaign fuels pistachio demand chios has cracked the top 10 in the salty snack category. Now in its fourth season, the iconic Wonderful Pistachios Get Crackin’ commercials – by highlighting how each character cracks open a pistachio in their own unique way – continue to appeal to a wide range of consumers from children to adults. The latest crop of commercials includes:
By Andy Anzaldo
he U.S. is the largest producer of pistachios in the world. California produces 98 percent of the nation’s crop, and Kern is the state’s top-producing county of the heart-healthy nut. In fall 2012, Kern County harvested an estimated 70,000 acres of pistachio orchards, which produced 260 million pounds, with an estimated value of more than $520 million. With about 30,000 acres of pistachios in California, Paramount Farms – the world’s largest vertically integrated grower and processor of pistachios – makes up about 25 percent of the state’s acreage. In addition, about 600 producers grow pistachios for Paramount under contract. Paramount processes and markets pistachios for more than 120 Kern County growers. These nuts all make their way to one of the company’s four processing locations, two of which are in Kern County’s Lost Hills area. With so many pistachio orchards in the county, and even more predicted plantings in the years to come, pistachio growers – and especially Paramount Farms – have a vested interest in steadily increasing demand to meet the consistently increasing supply. Paramount Farms has taken an innovative approach to answering that call. A few years ago, the company introduced the world to its irreverent “Get Crackin’” advertising and marketing campaign – a multi-faceted
Photo by Casey Christie
Paramount Farms’ Andy Anzaldo walks through a pistachio orchard during the harvest.
effort to brand and promote a commodity at levels the industry had never before seen. Paramount Farms has spent $100 million over the last three years to reach consumers through the campaign. This year, Paramount launched version 4.0 of its Get Crackin’ commercials, including $25 million spent on television ads alone which air on several major networks during programs such as “Dancing with the Stars,”
“Good Morning America,” “Late Show with David Letterman,” “The Tonight Show with Jay Leno” and “Monday Night Football.” The results to date have been nothing short of spectacular. Pistachios have surged as one of America’s favorite healthy snacks, with sales spiking by more than 40 percent of overall snack nuts, outpacing almonds, peanuts, cashews and mixed nuts by a 3:1 margin. In fact, for the first time ever, Wonderful Pista-
• The Village People, who “do it like macho men” • Brobee (the green fuzzy star of Yo Gabba Gabba!), who “does it cuz they’re yummy” • Victor and Sparky from Disney’s Frankenweenie, who “do it Franken-style” • The Secret Service, who “gets fired for doing it” • Twitter, that “does it with 140 characters” • Google, that “does it 73,600 ways” • Snoop Lion (formerly Snoop Dogg), who “does it habitually” • Manny Pacquiao, who “does it with a knockout punch” The Get Crackin’ commercials have been extremely popular. They have received more than 12 million YouTube views. You can see the Wonderful Pistachios commercials online at www.youtube.com/ wonderfulpistachios. — Andy Anzaldo is the general manager of grower relations for Paramount Farms.
Paramount Citrus builds world’s largest packinghouse for its tiny ‘Cuties’ By David Krause
his past November, Paramount Citrus celebrated the grand opening of its new citrus packinghouse in Delano, which is home to the company’s sweet, seedless, E-Z peel Cuties California Mandarins. The facility measures in at more than 640,000 square feet – the equivalent of 11 football fields under roof – making it the world’s largest citrus packinghouse. The Cuties Plant was built to keep up with the demand for the small fruit that has taken the U.S. citrus market by storm. Last season, Paramount Citrus and its partners packed and shipped 60 million boxes of Cuties. That number is expected to reach 90 million this year; and in less than five years, shipments are expected to reach 140 million boxes. The Cuties Plant is state-of-the-art and reinforces the company’s commitment to innovation, operational excellence and clean technology. Nearly every aspect of the facility is industry leading: Clean Technology: Half of the power used at the Cuties Plant will come from “green energy” generation. The Cuties Plant’s roof is home to a 2.7 MW solar
plant which will generate 15 percent of the power for the Cuties Plant, making it one of the largest customerowned rooftop solar plants in the U.S. Additionally, a 1.6 MW fuel cell, which produces electricity from natural gas with no combustion, will supply a further 35 percent of the power required to run the Cuties® Plant. Innovative Operations: The Cuties Plant features presort lines from Compac for the sizing and grading of its fruit – one of which measures in at 310 feet, making it the longest electronic grader and sizer in the world. Food Safety Excellence: The Cuties Plant was constructed using 100 percent precast concrete panels, which not only allowed the building to be constructed more quickly – construction took two years and was completed in time for this fall’s harvest – but also provide the best food safety conditions. There are no voids or ledges, making the ceiling and walls easy to clean. Beyond the size and capabilities, the Cuties Plant will also generate increased economic development for the Delano area, bringing with it more than 500 new jobs to Kern County. — David Krause is the president of Paramount Citrus.
Photo courtesy of Paramount Citrus
A bird’s eye view is provided of Paramount’s recently-opened Cuties processing plant in Delano.
KERN BUSINESS JOURNAL
California, Kern County: Giants in world pistachio industry By Richard Motoian
he story of the U.S. pistachio industry is one of unparalleled success. From its first commercial crop in 1976, the pistachio industry has gone from barely providing enough nuts for the domestic market to exporting a majority of its crop to countries around the world. Considering the pistachio industry is relatively new in the U.S., the growth is remarkable. If the current projections prove correct — and demand is successfully created ahead of production — American pistachios will establish their place in agricultural history. With the record-breaking harvest of more than 555 million pounds in 2012, pistachios are once again the fourth largest exported commodity in California. The entire domestic pistachio industry recently exceeded $1 billion in farm-gate value (the value paid to growers). The farm-gate value of the 2012 pistachio crop is conservatively estimated at $1.1 billion. This represents a 25 percent increase over the 2011 value of $897 million. The U.S., with its 950 growers, is number one in global commercial production, producing 42 percent of the world’s total supply of pistachios. Two hundred fifty thousand acres of pistachios are planted in California, Arizona and New Mexico, and approximately 40 percent of those acres are non-bearing. When those non-bearing acres start producing — projected to be somewhere between the years 2018 and 2020 — pistachio production will reach 1 billion pounds, with 99 percent of that production being produced in California. Consequently, American pistachios are an increasingly important element of California’s economy. Additionally, pistachios are an alternate year bearing crop (the harvest is heavier by alternating years): • 2012 was an “on year” with crop of 550 million pounds (a record). • 2011 was an “off year” yielding 447 million pounds (a record for an off-year). • 2010 was an “on year” yielding 528 million pounds (a record), and due to the large crop, pistachios were the 10th largest commodity in California.
Ninety percent of California’s production is grown in the San Joaquin Valley – from Bakersfield to Merced. Kern County leads production in California. In 2011, its 62,831 bearing acres produced 196.7 million pounds of pistachios. This represented 44 percent of the total state pistachio production. The top five producing counties in California are: Kern; Fresno (Madera and Fresno alternating their positions year to year); Madera; Tulare; and Kings. According to an economic impact report commissioned by American Pistachio Growers and conducted by Dr. Dennis Tootelian, a Sacramento State University professor of economics, California pistachio growers spend nearly $409.1 million annually in the state, averaging more than $1.1 million each day of the year. This spending impact creates a ripple effect that spurs job growth in other industries and reinvests millions into California’s economy: $672.3 million in business activity • Pistachio growers create more than $672.3 million in overall business activity in California, which amounts to more than $1.8 million each day of the year. • 5,820 jobs and $221.1 million in labor income. Pistachio grower expenditures create an economic ripple effect that generates more than 5,820 jobs each year in farming and non-farming sectors. • The labor income generated by these jobs is projected to be more than $221.1 million annually. This covers wages and salaries for new employees, as well as expanded income for those already working in the industry. $24 million in business taxes • More than $24 million annually in additional taxes will be created from the increased business activity caused by California’s pistachio growers, equating to $65,880 each day of the year. • Depending on how these business tax funds are used, they can help pay for state and local programs that further benefit all Californians. — Richard Matoian is the executive director of American Pistachio Growers.
KERN BUSINESS JOURNAL
What? A grape that tastes like cotton candy? By John Mack
aybe it was at the county fair, or perhaps it was when the circus hit town that you got your first sweet taste of cotton candy as a child. As adults, most of us grew out of the desire to munch the puffy, sticky stuff. But what if that unique cotton candy flavor could be plucked from a fresh bunch of plump California grapes? Cotton Candy grapes are one of a wide array of proprietary grape varietals developed and patented by International Fruit
Photo courtesy of International Fruit Genetics
Among the specialty grapes developed by International Fruit Genetics is a grape called Cotton Candy.
Genetics (IFG), one of the world’s largest fruit-breeding operations. The select group of growers and marketers licensed by IFG combine cutting-edge scientific techniques with business and marketing acumen to create some of the world’s best-tasting table grapes and stone fruits, such as cherries. IFG was founded in 2000 by the Stoller family, owners of Sunridge Nursery in Bakersfield, and Jack Pandol, owner of Grapery. World renowned plant breeder, Dr. David Cain, was hired as the breeder and general manager at the founding. Headquartered in the heart of Kern County, IFG works with fruit growers across the globe — from South America to South Africa, from Italy to Australia. The company is dedicated to making world-class varieties of table grapes and other fruits, including cherries. IFG also offers its licensed growers and marketers the security of a worldwide patent protection program. From ‘commodity’ to ‘value added’ For many years, the fresh fruit industry, in general, and the table grape business in particular, has been mostly a commodity, price-driven proposition. IFG strives to alter that scenario, so that the business evolves into one that is flavor driven. IFG breeds primarily for taste, without compromising what grocery retailers are looking for in terms of size, color and shelf life. That’s the real “value added” that IFG brings to the table: the know-how to develop grapes that deliver real “wow!” flavor every time. It’s important to note that IFG does not utilize genetic modification (GMO) in any of its breeding practices. Rather, the company uses advanced crossbreeding techniques, ex-
Photo courtesy of International Fruit Genetics
A worker in the laboratory of International Fruit Genetics helps the Kern County innovator develop varieties of grapes.
Photo courtesy of International Fruit Genetics
International Fruit Genetics was founded by (left to right) Jack Pandol, Craig Stoller, Dr. David Cain and Glen Stoller.
perimenting with countless “crosses,” to develop grapes that offer quality characteristics, such as seedlessness, crisp texture, thin skin, low acidity and, above all, premium flavor. In addition, IFG focuses on breeding varieties that require less labor during the growing process, which is very important to growers around the world. Growing for flavor is a complicated process that involves several considerations, such as knowing when the sugar content of a grape is exactly right. Harvest crews have to be retrained to know just when to pick the grapes for maximum sweetness, and quality control people roam the fields carrying refractometers to precisely measure the sugar content of the fruit. “Sugar content is not the same thing as flavor, but it’s a great indicator of flavor,” says Jack Pandol Jr., owner of Grapery and an IFG founder. “When we’re out in the field, we look for the color and level of maturity that indicate when the flavor should be right. Then we test sugar content to be sure. It’s all about getting grapes with the absolute best taste.” For IFG, a major part of breeding for flavor involves its relationship with the University of Arkansas, which has been conducting a grape breeding program for more than a half century. The university collaborates with IFG, crossbreeding varieties that are native to the U.S. with the traditional table grapes grown in California. That’s how the Cotton Candy grape came about, as well as other distinctive varietals. Others, such as the elongated black seedless grape, Sweet Sapphire, and the crispy red seedless, Sweet Celebration, were bred using parents collected from many regions of the world, such as Afghanistan, Iran and Europe. IFG currently is testing several new unique varieties that will be released to
growers over the next several years. These range from unique flavors and shapes to more standard varieties that are improvements to existing, commercial varieties. Breeding for flavor Flavor, of course, is a subjective quality. It is not as easy to measure as such traits as color and texture. Grocery retailers look for grapes that have a bright color, and are rock hard to resist breakage. Unfortunately, taste is often a secondary consideration. IFG’s licensees are working to change that attitude, creating brand identity programs, and investing in superior packaging and sophisticated marketing programs to develop consumer demand for a higher-quality, better-tasting table grape. To ensure that the bar on quality and flavor remains high, IFG has a unique worldwide licensing program that prevents overproduction. Acreage restrictions are strictly enforced with licensees around the globe. Do those Cotton Candy grapes really taste like the county fair confection we all loved as kids? Those who have tried them answer, “Yes!” A limited run of grapes was test-marketed in the United Kingdom, with the Sainsbury grocery chain, and results far exceed expectations, according to Pandol. When it comes to fresh produce, European consumers are generally more flavor-oriented than their American counterparts. You may also wonder where you can obtain some of these remarkable Cotton Candy grapes in the U.S. You’ll have to be a bit patient. The commercial introduction of the product should hit supermarket produce aisles this summer. — John Mack of Design Mark & Associates has written this article for International Fruit Genetics.
Photo courtesy of International Fruit Genetics
A greenhouse at International Fruit Genetics is filled with specialty vines awaiting planting.
KERN BUSINESS JOURNAL
California table grape volume continues to grow By Jeff Klitz
ern County is in the heart of the most productive table grape region in the U.S. California’s table grape industry is made up of around 500 operations, mostly third or forth generation family farms, that produce 99 percent of the table grapes grown commercially in the U.S. The major table grape growing areas in California include the 200-mile-long San Joaquin Valley and the state’s southernmost growing region, the Coachella Valley. Grapes from California are available to consumers around the world from May through January. Table grape volume in California has continued to increase through the decades, reaching nearly 100 million box units in recent years. In 2011, a total of 97.8 million box units of California table grapes were shipped, making it the fifth consecutive season where volume exceeded 90 million. A majority of the table grapes in California are produced in counties within the San Joaquin Valley, including Kern County. The estimate for the 2012 crop – which was still being shipped as this article was being written — is just over 100 million boxes, slightly above the prior record of just over 99 million boxes. According to the 2011 Kern County Agricultural Crop Report, the total agricultural crop value in Kern County was $5.3 billion in 2011. Grapes (wine, table and raisin)
were ranked among the top three commodities in 2010 and 2011. Table grapes represent about half of the total grape acreage in Kern County. In 2011, Kern County had over 40,000 total acres of table grapes, with a crop value of $545 million. As a whole, the 2011 season for California table grapes had a record-high crop value of $1.41 billion, 3 percent more than the previous record seen in 2009. The total crop value of California table grapes has continued to increase in recent years and has exceeded $1 billion each season since 2004. In the U.S., over 2.5 billion pounds of table
grapes (including imports) were consumed in 2011, with a per capita consumption of more than eight pounds. Between May and December 2011, 75 percent of the table grapes consumed in the U.S. were from California. The main competitive origins for California table grapes in the U.S. are Chile, Mexico, Peru and Brazil. Research over the years has consistently shown that primary grocery shoppers in the U.S. prefer California grapes. In 2010, 99 percent of U.S. consumers in a nationwide survey said they prefer grapes from California over imports when the price is the same. Grapes from California are also a popular fruit outside the U.S. Approximately 40 percent of the California table grape crop is exported to more than 60 countries around the world. The top five export markets in 2011 were Canada, Mexico, China region (including Hong Kong), Indonesia and the Central America region. From 2007 to 2011, exports of California table grapes to Mexico and offshore markets (excluding Canada) increased by nearly 50 percent in value. — Jeff Klitz is the communications coordinator and research analyst for the California Table Grape Commission. Established more than 40 years ago, the commission is the promotional and research arm of the California table grape industry.
KERN BUSINESS JOURNAL
Sun World builds demand with ‘branding’ program By Natalie Erlendson
benefitting from the approach. “What we know about the target grape ost shoppers today choose where consumer is that she is very brand loyal when it to spend their grocery dolcomes to shopping. When she finds a brand she lars based on the quality of the likes, she sticks with it and she’s willing to pay produce department. One Kern a little more for quality. We’re seeing these purCounty grape supplier believes it holds the key chase behaviors translate to the grape category, to differentiating retailers’ produce departas well,” Robertson said. ments: proprietary grape varieties. For the past three years, the company has Sun World International operates one of the partnered with top national supermarket retaillongest standing variety development programs ers to execute branded grape category proknown for its introduction of seedless watergrams. The programs consists of retail divisions melon in the 1970s, as well as a number of treeexclusively carrying Sun World’s branded grape fruit and grape varieties grown today across six offerings for the domestic grape season, with continents. the goal of creating brand visibility, and sales Proprietary fruit varieties, with superior and volume growth. The program has been a eating characteristics, higher production yields success with participating divisions experiencPhoto courtesy of Sun World and desirable harvest windows, are developed ing up to double digit sales dollar and volume through a traditional cross-hybridization or growth. Grapes are harvested from a Kern County vineyard by Sun World. breeding process similar to that used by Aus“Produce is beginning to become less about fer, the quality standards do not, which means the difference trian Monk Gregor Mendel in the famous pea commodities and more about brands, similar to shoppers is virtually indistinguishable. plant experiments. to what you see in the Consumer Packaged Goods sector,” “Extended seasonality on a premium quality grape is a The number of breeding programs in the produce indussaid Robertson. “But as an industry, we’re just scratching the distinct benefit to retailers on the lookout for opportunities try is growing, as producers and retailers of grapes, berries, surface of the power of brand marketing.” to capitalize on repeat sales,” said Gordon Robertson, Sun apples, celery and everything in between look for the next Sun World is making sure that their branded grape World senior vice president of sales and marketing. best variety to delight shoppers and drive sales growth. portfolio is well established for when branded produce It also gives Sun World and their customers an advantage is the new normal. The company just wrapped up its first Sun World’s variety development model is particularly in creating a loyal consumer fan base for their proprietary unique. In addition to breeding new varieties, the company commercial harvest of AUTUMNCRISP brand grapes – an products. To help convey the positive attributes of their variheavily invests in these varieties as a grower and allows incredibly large, crisp green seedless grape, with a subtle eties, the company has created a branded marketing program Muscat finish. The grape harvests late season, when there is licensed production internationally. While most grape varieties are available from a single growing region for just a complete with branded packaging, in-store merchandising currently a gap for a strong performing variety. materials, shopper ad photography and selling stories, and couple weeks out of the year, this global network creates an Critical praise has been overwhelmingly positive and online web pages dedicated to each of the varieties. extended calendar of availability. demand going into next season is strong. The company will More and more retailers are taking Sun World’s advice In the United States, consumers can get MIDNIGHT also release a late-season black seedless grape with a similar to “make our brands your own,” advertising the products BEAUTY brand grapes — a proprietary black seedless harvest window and has a number of varietal innovations in by brand name, such as SCARLOTTA SEEDLESS brand grape available from the Coachella and San Joaquin Valleys the pipeline for the future. grapes, instead of using generic references like Red Seedof California, Mexico, Brazil and Chile — for a total of — Natalie Erlendson is the marketing manager for less Grapes, further reinforcing brand messages. Sales are eight months out of the year. While the growing regions difSun World International.
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KERN BUSINESS JOURNAL
The right choice for good health Your experience...
Choosing your doctor
With some health plans...
Kaiser Permanente is uniquely structured to give you everything you need–all together in one easy-to-use package. See how having the right partner can make all the difference... With Kaiser Permanente...*
Pick from a list of names, often based on nothing more than if he or she accepts your insurance.
We help walk you through the process of becoming a new member, including choosing a doctor who’s right for you. You can even view all our doctors’ profiles online.
Call. Get placed on hold. Call back. Seeing your doctor starts to seem like trying to win a radio contest.
Schedule or cancel routine appointments with your doctor - by phone, online, or from your mobile device.
Your doctor flips through a file full of papers, asking things you’ve already answered or can’t remember.
Your doctor, backed by a secure, innovative electronic health record system, is up to speed and ready to take care of you.
You drive all over town to take lab tests, get X-rays, or fill prescriptions. You’ve spent half your day in the car.
At all our Kern County locations, your doctor, lab services, X-rays, and pharmacy are under the same roof, so you can save time and do more in one visit.
Show up with your fingers crossed that your primary care doctor faxed or mailed your records.
When you arrive, your specialist will have your health information right at his or her fingertips, making your care virtually seamless.
Remembering your doctor’s instructions
Take lots of notes during your visit, listen carefully and trust your memory later.
You get a printed summary report at the end of each visit. You can also view details of your visits online whenever you want, including most test results.
Asking routine questions without a visit
Call your doctor’s office. Leave a message. Hope you don’t miss the return phone call.
Email your doctor’s office, and get a reply normally within 48 hours.
Making an appointment
During your visit
Getting other services
Visiting a specialist
Along with getting excellent care, as a Kaiser Permanente member, you have access to lots of preventive health resources like classes, wellness coaching, and more. (Some classes may require a fee.) To learn all about the many benefits of membership, visit kp.org/thrive or call 661-334-2005. *These features are available when you receive care at Kaiser Permanente facilities.
KERN BUSINESS JOURNAL
USDA’s former Shafter research facility gets new life By Tom Burke
coalition of private, government and education partners is turning an abandoned Shafter research facility into a boon for agriculture companies, while potentially saving consumers millions of dollars a year. San Joaquin Valley Quality Cotton Growers Association, Kern County and the Kern Community College District are making the Shafter Agriculture Research Station available to agriculture firms to conduct crop-based and other agriculture research. The 80-acre facility encompasses green houses, laboratory space, test plot land, an experimental cotton gin and a machine fabrication shop ready to welcome agriculture businesses’ seasonal, short-term or longrange research projects. The U.S. Department of Agriculture managed the station for several decades until budget cuts caused the federal government to pull out its personnel last year. Now, the facility is a thriving local agribusiness asset, according to Greg Palla, executive vice president and general manager of San Joaquin Valley Quality Cotton Growers Association. Agriculture research is critical in today’s economy. Palla notes that research improves crop production, plant health and viability, and reduces consumer product costs. Referencing cotton as an example of how consumers save money through research, Palla said that cotton research has resulted in a 33 percent increase in cotton growers’
Photo courtesy of the Kern Community College District
Operation of the former U.S.D.A. agricultural research center has been taken over by the Kern Community College District.
productivity over the past 30 years. One byproduct of cotton production is cotton seed, which is a feed source for dairy cattle. According to Palla, the increased supply of locally produced cotton seed has allowed the cost of cattle feed to remain relatively lower, which contributes to consumer savings on the cost of milk. “While milk prices have risen on a nominal basis, that cost adjusted for inflation shows that milk costs have actually decreased by $1.74 per gallon,” said Palla. “Thus, the increase in efficiencies in providing cattle feed at a reasonable cost helps Kern County consumers save $35 million per year for milk alone. That’s the power of research.”
Cotton research used to be the primary research at the station, but now that the collaborative is running the show, the facility is wide open to help anyone in the agriculture industry. “Under our new management approach, we’ve converted the station’s use from solely cotton research to include potentially all sectors of agriculture, especially crop production,” Palla said. Research tenants may choose from a variety of components to aid in their on-site research, including up to 60 acres of experimental plot land; nearly 7,000 square feet of greenhouse space; and 10,000 square feet of laboratory space. The facilities include appropriate scien-
tific equipment, production and harvesting machinery, and specialized fabrication tools. Michele Bresso, Kern Community College District’s associate vice chancellor of governmental and external relations, explained that the onsite equipment is owned by the college district. “Through the federal government transfer process, Kern Community College District took possession of the equipment from the U.S.D.A. specifically so that it could remain on site at the Shafter Agriculture Research Station for use by future research tenants,” Bresso explained, adding that the district also is creating a student internship/ work experience opportunity to provide agriculture, biology and chemistry students a chance to assist tenants with their agriculture research projects. “It’s a win-win-win for agriculture companies, our students and our community,” she said. Student research assistance may benefit some of the research tenants that have indicated their intention to conduct work at the site in 2013. Those tenants will include the University of California and scientists from out-of-state universities, as well as private companies. The facility is scaled and structured to accommodate many research tenants. To learn more about the Shafter Agriculture Research Station or to discuss renting the facilities, contact Greg Palla at 661-3772490, or by email at email@example.com. — Tom Burke is the Kern Community College District’s chief financial officer.
KERN BUSINESS JOURNAL
BUSINESS PROFILE: Paul Trent, Trent Systems
IT ‘smart choices’ give companies competitive edge
“flexible approach” to investing. Press down cautiously on the IT spending peddle, while keeping a wary eye on the economic road ahead. If revenues are greater than expected, increase spending. If the economy softens, cut back.
akersfield-based Trent Systems provides customer-centric PC and network support to public agencies, private companies and individuals. Founder Paul Trent sat down with the Kern Business Journal recently and discussed his consulting firm and issues facing area companies regarding the use, maintenance and purchase of information technology. Trent Systems is located at 4043 Stockdale Highway. Staff can be contacted by calling 617-2795 or through the company’s website www.trentsystems.net.
What steps should be taken before technology investments are made?
Trent Systems works with clients to help them analyze their business objectives. Before a company spends one dime on technology, the owner and managers should understand what they need to accomplish. Technology investment basically falls into three categories: needed to operate; needed to grow; and, research and development. Most companies will place the highest priority on spending in the “needed to operate” category. But the other categories cannot be ignored if a company wishes to grow and be competitive. A balance must be established within a reasonable budget.
What types of companies use your services?
Trent Systems is geared to providing small- and medium-sized businesses the advantages enjoyed by large corporations that have internal IT staffs. Some of Trent Systems’ clients include Hathaway LLC, Precision Pharmacy and Southwest Contractors. What sets you apart from other IT consulting firms?
Where do “mobile devices” fit into
Photo by John Harte a company’s technology investing? We help our clients think strategically and develop IT solutions that As the capabilities of mobile Paul Trent of Trent Systems has helped shape the information technology infrastructures of some of the benefit their businesses, rather than devices – smart phones, tablets, etc. Southern San Joaquin Valley’s leading business organizations. our technical egos. We incorporate – advance, companies are integrating our client’s vision, needs, budget and these devices into their IT systems and a chief technology officer. Instead, they hire Trent Systems concerns into solutions that provide reliable and “smart” everyday operations. A majority of respondents surveyed reto be their “virtual CTO.” We offer “desktop management,” information technology systems. Company owners and man- which is an onsite, or remote 24/7 state-of-the-art help desk cently by the Corporate Executive Board said they planned to agers have told us that we provide a perspective that many significantly increase spending on mobile devices in 2013. An that provides hardware, software and networking support. thought only an internal IT department could provide. “Server management” ensures that a company’s critical serv- increasingly popular trend among employees is called BYOD – bring your own device to work. The obvious benefit to comers are monitored and maintained. “Network management” How does Trent Systems provide its services? keeps a company’s network infrastructure running at optimal panies is cost-savings. Employees are buying devices that the Services are provided in several ways that meet clients’ company would have to buy. But there can be drawbacks. performance. “Onsite support” occurs when remote help needs. We don’t have a one-size-fits-all approach. Most is not enough. Trent Systems’ experts go to the jobsite to small- and medium-sized companies cannot afford to hire assist. “Consulting services” are provided to help companies What are those drawbacks? Drawbacks can include conflicts between employees develop strategies to meet present and future IT needs. who can afford to buy expensive devices and those who Big Buys can’t, as well as potential violations of labor laws resulting What common technology failure do you see? Is your organization planning any major upgrades or purchases in the next 12 months? from workers always being “connected” to their jobs. Most Some companies do not recognize the impact technolYes 70 No significant are security and privacy issues. What happens ogy failures can have on their operations and on their bottom Don’t know to sensitive company information downloaded onto mobile lines. What happens if the server goes down? What happens 60 devices? Can employers demand to “inspect” or “wipe” when industry-specific software stops working? What hapclean employees’ private devices? Before a Trent Systems pens when a natural disaster, such as earthquake, strikes? 50 client implements a BYOD program, we work with HR and These failures must be anticipated and responses planned. other advisers to help craft a written policy that protects the 40 company and its information. Is this a good time to invest in new technology? A “good” time is when it is the right time for your com30 What lessons did you and your clients learn from Hurpany; when needs justify expenditures. Recent surveys reveal ricane Sandy? U.S. companies are more optimistic about the economic re20 Be prepared! We help clients develop backup systems, covery and plan to spend more money in 2013 on technology. storing critical data off site and having plans to transfer serComputerworld magazine’s Forecast 2013 survey revealed 10 vices to remote locations. Even the simplest mom-and-pop that 43 percent of company respondents reported an increase in their IT budgets. And 64 percent reported they plan to make business relies increasingly on computers and data-sharing 0 systems just to operate. A storm, fire or earthquake strikes a major IT purchase or upgrade in the next 12 months. When 2010 2011 2012 2013 without warning. Will you be ready? Can your business respondents were asked to name the single most important Year survive if your technology goes down and data is lost? Comtechnology project they would undertake in 2013, the top two Data from 2013 Forecast Survey (Base: 334; June 2012) 2012 Survey, 2011 and 2010 Survey. Source - ComputerWorld panies must develop emergency plans and regularly update responses were virtualization and the cloud, both of which them. promised to reduce operating costs. I advise clients to take a
Bouncing Back What changes do you expect in your organization’s IT budget in the next 12 months?
Increase Decrease Remain the same
50 40 30 20 10 0
Year Data from 2013 Forecast Survey (Base: 334; June 2012) 2012 Survey, 2011 and 2010 Survey and 2009 Survey. Source - ComputerWorld
Photo courtesy of Getty Images
New York’s historic boardwalk washed away in last fall’s Hurricane Sandy. East Coast businesses that were able to quickly resume operation had data backup systems.
KERN BUSINESS JOURNAL
Pictured left to right: Anker Fanoe, Colleen Bauer, Andrew Pederson, and Garry Richardson
Rabobank, N.A. – Committed to Kern County Let’s grow together
KERN BUSINESS JOURNAL
A History in Agriculture and A Future in Kern County. Rabobank, N.A. has deep roots in agriculture, and ag remains a core focus as the bank continues to grow in California. Rabobank was founded in 1898 by farmers who pooled their savings to provide loans to their neighbors and communities. The company has grown substantially over the past 110 years, but hasn’t lost track of what’s most important to its customers: a commitment to long-term relationships. The rich agricultural heritage of Rabobank, coupled with unrivaled market knowledge and the capital to grow seamlessly with customers, makes Rabobank, N.A. the premiere lender across the board in the agricultural industry. This devotion to customers extends into the Rabobank retail banking side as well. Rabobank, N.A. received the J.D. Power and Associates award for “Highest Customer Satisfaction with Retail Banking in California, Two Years in a Row.” “We know we’re committed to our customers for the long term,” said Anker Fanoe, Rabobank, N.A. regional president. “However, it’s very humbling to receive this ranking for the second year in a row because it shows that our customers recognize and appreciate our commitment as well.” In Kern County, Rabobank, N.A. has a dedicated agribusiness team. This local, experienced team of lenders not only understands the unique challenges and opportunities of Kern County agriculture, they also are an integral part of the community. They’re invested beyond paperwork, spreadsheets and financial statements – they want Kern County agriculture to thrive because it means the community benefits as well. “Rabobank has integrated seamlessly into Bakersfield and Kern County because folks here are as committed to agriculture as they are to their community,” said Fanoe. “As an organization, our focus is also on ag and community; it’s part of who we are and that is evidenced daily in how we conduct business.” One of the key sources of knowledge and insight Rabobank, N.A. is able to offer clients is the research from the world-renowned Rabobank International Food and Agribusiness Research & Advisory (FAR) group. This group is comprised of more than 80 analysts and economists around the world who constantly watch and analyze global market events that affect agriculture. This global perspective offers Rabobank customers the ability to understand what the agricultural industry is experiencing on a global scale, and how this information can allow them to make more informed business decisions. Rabobank, N.A. is part of the Rabobank Group, the highest-rated privately owned bank in the world. This gives Rabobank, N.A. customers the security of a strong foundation and access to capital when it’s most important. When clients are ready to grow, Rabobank can accommodate their lending needs, and the bank is positioned to partner with large, complex operations. “From the field to the fridge, it’s important to have a financial partner who understands agriculture and will be around for the long haul,” said Fanoe.
Rabobank, N.A. Member FDIC www.rabobankamerica.com
Rabobank, N.A. received the highest numerical score among retail banks in California in the proprietary J.D. Power and Associates 2011-2012 Retail Banking Satisfaction StudiesSM. 2012 study based on 51,498 total responses measuring nine providers in California and measures opinions of consumers with their primary banking provider. Proprietary study results are based on experiences and perceptions of consumers surveyed January-February, 2012. Your experiences may vary. Visit jdpower.com.
KERN BUSINESS JOURNAL
Agencies help growers maneuver through export maze By Glen Roberts
xporting agricultural products is a nuanced endeavor. Exporters face a myriad of required forms. A “phytosantitary certificate” or a “certificate of free sale” are two examples. If a product is shipped on a pallet, or in cardboard, it may need to be fumigated prior to export. Buyers may need to apply for an “import license.” Labels may need to be modified before a product is imported into a country. The list of potential requirements is long. The U.S. Commercial Service, International Trade Administration, U.S. Department of Commerce can help growers and producers maneuver through the agriculture exporting maze. As the director of two Central Valley offices, in Bakersfield and Fresno, I am asked every day: Where do I go for assistance? What programs are available for my products? Who can help? In past years, the U.S. Department of Agriculture and its Foreign Agriculture Service (FAS) were regarded as an agricultural exporter’s primary source of assistance. The Foreign Agriculture Service continues to provide a wealth of information, particularly with its repository of online information. But this requires exporters to work with the service’s overseas posts to obtain much of its information. The service does not have domestic offices. Agricultural exporting actually crosses the jurisdictional lines of both the U.S. Department of Agriculture and the U.S. Commercial Service. Both departments can provide much needed assistance. How this can work: Recently I have been assisting local farming operations by communicating directly with my colleagues in overseas posts, including at U.S. embassies and consulates. These overseas colleagues then communicate within their posts with the local FAS officer. This can help expedite the resolution of exporting issues. An increasing number of farming operations now are exporting directly and as closely as possible to endusers to maximize profits. As they seek to identify potential markets for their agricultural products, they can be assisted by establishing a close working relationship with the local U.S. Commercial Service office.
Photo by Alex Horvath/The Californian
Bolthouse Farms technologist Jason Bernardo mixes salad dressing ingredients in Bolthouse Farms’ new Innovation Center.
Bolthouse, consumers together become ‘Force of Nature’ By Karen White
olthouse Farms has almost 100 years of farming expertise. Starting in 1915, the Bolthouse family started commercial vegetable farming in Western Michigan. It was in 1972 that Bolthouse began operations in Bakersfield, Calif., enjoying the benefits of the sun, soil and climate to help meet growing demands for carrots year round. Throughout the years, Bolthouse Farms’ product portfolio has expanded to include super premium juices and smoothies, and salad dressings that are manufactured at the company’s state-of-the-art bottling facility in Bakersfield. Innovation is a key driver at Bolthouse Farms, whose primary mission is inspiring “the fresh revolution.” This involves partnering with consumers on their journey to be healthy by providing healthy, innovative beverage and food products. Consumers know that they should be making healthier food choices, but doing so isn’t always easy. We believe that everyone deserves healthy, accessible, available and affordable food.
Bolthouse Farms has combined its nearly century of farming expertise with creativity and innovation. The results: high quality products made as much of fresh thinking as of fresh ingredients. Building from the success of its 100% Carrot Juice product, the company recently introduced a new Orange + Carrot Juice Now, which packs 300 percent more antioxidant vitamin A than regular orange juice. For on-the-go consumers, Bolthouse Farms provides a line of high protein drinks that are delicious and affordable. Available in mango, chocolate, blended coffee and vanilla, the line contains 16 grams of protein for each 8-ounce serving. Looking for a grab-and-go breakfast option? Bolthouse Farms has designed two new parfait smoothies — strawberry and peach -— offering nutritious meal replacement options. A single-serve bottle of smoothie includes 10 grams of protein, along with 2.5 grams of fiber and 15 percent of the required daily value of calcium. Bolthouse Farms also offers a line of premium refrigerated salad dressings that contains at least 55 percent fewer calories and 75 percent less fat than leading brands. The
— Glen Roberts is the director of the U.S. Commercial Service offices in Bakersfield and Fresno www.export.gov/ Fresno
Photo courtesy of Bolthouse Farms
A worker irrigates a Bolthouse Farms field in Kern County.
Photo courtesy of Bolthouse Farms
Bolthouse Farms sells a variety of products, including these salad dressings, under its company name.
yogurt-based dressings are gluten-free, contain no artificial flavors and no preservatives, and have 45 or fewer calories per serving. The company’s vinaigrette dressings are made with extra virgin olive oil, in addition to flaxseed oil and canola oil. Not only do these dressings complement salads, but they also make a low-fat, full-flavor marinade and snack dip. The dressing line allows consumers the benefit of eating healthy, without compromising taste and flavor. At Bolthouse, it is important that the products are not just good for consumers. It is also important how they are manufactured. A key driver in Bolthouse Farms’ corporate social responsibility commitment is to focus on sustainability, the treatment of the land, and how Bolthouse Farms partners with its growers and suppliers. The goal is to provide ingredients for Bolthouse Farms’ products that are grown, processed and delivered in the most sustainable fashion. As farmers, Bolthouse has always had that relationship with the land. To have a productive asset over time, Bolthouse understands you can’t over-farm land; you must consider sourcing and land practices. Bolthouse is state-of-the-art in terms of sustainability practices. Bolthouse Farms is here to help consumers eat a little better, get a little more active and ultimately have the vibrant life. Together, we can be a Force of Nature. — Karen White is Bolthouse Farms’ community and branded affairs manager.
KERN BUSINESS JOURNAL
Photo courtesy of Grimmway Farms
Carrots are processed in Grimmway Farms’ large facility south of Bakersfield.
‘Plain’ carrots become powerhouse food choice By Bob Borda
hat is a value-added carrot? It is a whole vegetable that has been further processed through a washing, peeling and cutting process, and conveniently packaged as a ready-to-consume fresh carrot. Today, value-added carrots dominate the category by offering consumers many occasionbased, ready-to-eat choices. Since its inception in the early 1990s, value-added carrot production has revolutionized the carrot category. Today, value-added carrots (baby, petites, matchsticks, chips and individual baby carrot snacks) account for 56 percent of all carrots sold at retail, while accounting for 71 percent of the revenue generated in this category. Through this value-creation process, carrots are the second highest revenue-producing fixed-weight vegetable, next to potatoes, in the produce department. (This statistic does not include bagged salads.) The demand from today’s consumers keeps Grimmway Farms focused on innovation. One of our greatest assets is time. Most families are extremely busy, with two working parents. Children’s after-school activities consume a good portion of the afternoon and early evening, thus creating very little time for families to prepare nutritious meals. Grimmway has developed solutions to provide healthy snack and easily prepared meal concepts for active families and individuals who want convenient, nutritious choices. Our individual-serve 3-ounce baby carrot bags are perfect for individuals and families on the go. This product is typically available in multipacks that contain four individual bags secured by a band. The product is available in most retail outlets, and is the perfect size for kids’ lunches, afternoon office snacks and sporting events. The Grimmway Farms matchstick carrots, which are also called shredded carrots, provide value-added nutrient and color to salads and wraps, and add a flavorful complement to food. They can be found in most supermarkets. Carrot chips resemble Ruffles potato chips and are cut from large-diameter carrots. These biased crinkle-cut carrots are ideal as hors d’oeuvres for dipping. Sweet, slim baby cut carrots are sold in
Grimmway’s Premium Microwaveable Petite Carrot packs. This product features the slender cut, two-inch baby cut carrots. It is packed into a microwaveable film, creating a product that can be used as a snack carrot, or as a side dish complement to an entree. As consumers continue to search for new and different carrot items, Grimmway’s innovation team is developing product concepts that serve functional fits and that appeal to consumers’ sophisticated palates. Grimmway recently launched two forms of carrots with distinctly different functions: Carrot Dippers are individually packaged baby carrots with a single-serve ranch dressing cup inserted into the bag for an all occasion “grab ’n go” snack. Simply Delicious Carrot Creations are easy-to-prepare side dishes made with fresh, petite carrots, accented by either roasted garlic and savory herb flavor, or honey, brown sugar and cinnamon flavor. Both contain a buttery dollop that becomes a sauce when heated. To encourage consumers to experience the benefits of a wholesome, well-balanced diet that includes baby carrots, Grimmway Farms has created specially-marked packages featuring a “Biggest Loser” sweepstakes. Through December 2013, consumers can enter the sweepstakes for the chance to win one of three week-long stays for two at The Biggest Loser Resort, along with hundreds of other fitness-inspired prizes, including the official Biggest Loser cookbooks and DVD series. “The Biggest Loser” and Grimmway Farms’ relationship builds on established evidence that low-calorie, vitamin-rich vegetables, such as baby carrots, are a nutritious component of a healthy weight-loss plan. Baby carrots are fat- and cholesterolfree, low in calories—only 30 calories per serving—a good source of dietary fiber, and a nutritional powerhouse, providing more than 15 vitamins, minerals, and phytonutrients that are essential for good health. Carrots are an excellent source of betacarotene, which the human body converts into vitamin A. Just one serving of baby carrots (about nine medium baby carrots) provides more than 200 percent of the recommended daily value for vitamin A. — Bob Borda is Grimmway Farms’ vice president of marketing.
KERN BUSINESS JOURNAL
Air District program replaces polluting tractors By Janelle Schneider
orking in agriculture presents many challenges beyond replacing equipment. And replacing a tractor primarily to reduce emissions can sometimes be outside the realm of economic possibility. But the San Joaquin Valley Air Pollution Control District and the valley’s agricultural community have forged a successful, long-term partnership, which includes a grant program that assists agricultural operators in changing out older equipment for newer, cleaner models. Forty-seven Kern County farmers have participated in the second round of funding of an ag equipment-replacement program. Since the program began in 2010, 98 tractors in the county have been replaced. Applications for this funding cycle, which began in October, are still being taken. “The response we receive to this program continues to be overwhelming, which speaks to the need for this funding,” said Samir Sheikh, the district’s grants director. The Agricultural Tractor/Mobile Equipment Replacement Program replaces in-use, off-road ag equipment, including wheel loaders, balers, combines, graders and tractors, and other equipment. During the program’s first cycle, more than $22 million was awarded throughout the air basin. This fiscal year, $20 million is budgeted and 662 applications have been received district-wide. Officials anticipate similar funding in the upcoming fiscal year, which begins in July 2013. “Grants are averaging about 50 percent of the cost of a new tractor. The funding limit is 80 percent,” Sheikh said. The average grant amount is $30,000. The program is funded through state motor vehicle fees, the Carl Moyer Program and the federal Diesel Emission Reduction Act. “As long as there is a need to support valley ag operators with funds to help clean up our air, the Air District will continue to offer programs such as this,” Sheikh said. For more information about this program and to stay informed of all grant and incentive programs, visit www.valleyairdistrict
Who is eligible? • Engaged in agricultural operations (as defined by the state Air Resources Board). • Operate annually 75 percent within California and 50 percent within the valley air basin. • Domiciled within the air basin. • Equipment is in-use and operational. • Have horsepower rating of 25 or greater. • Have an uncontrolled (tier 0) or tier 1 engine. • Have not received funding from any other local, state or federal program. New tractor must have a current model year emissions engine (tier 3, 4 or cleaner) and serve the same function as the tractor it replaced.
— Janelle Schneider is an air quality public information representative with the San Joaquin Valley Air Pollution Control District.
Photo courtesy of The Californian
Royal Rainier cheeries are sorted and packed at Murray Family Farms.
Value-added becomes Murray Family Farms focus By Steve Murray
urray Family Farms has found its niche in value-added agriculture, prospering in a segment of the tough agricultural industry. Steve and Vickie Murray have grown their enterprise into a premier Kern County agricultural entertainment destination. Value-added activities, such as U-pick, farmers markets, freeway fruit stands, bakery, restaurant, preserves and on-thefarm activities generate more dollars per acre than conventional agriculture. That added income is offset by increased inefficiencies and the need for more capital, management and labor. By nature, the products that the farm grows are agricultural commodities. Murray Family Farms takes these raw commodities and increases their intrinsic value. This is done through branding, direct sales, processed foods, agricultural tourism and education. What started out as a diversity strategy to offset the volatile risks of growing cherries has become 50 percent of the company’s annual revenue. Cherry harvest income comes one day per year from the packing house. Value-added income meets the cash flow needs for the rest of the year. The Big Red Barn at Highway 58 and General Beale and the Old Tomato Weigh Station at Interstate 5 and Copus Road are the company’s two agricultural entertainment venues. Murray Family Farms continues to invest hundreds of thousands of dollars building pole barns to provide shade, improving parking, drilling new domestic wells, installing a bounce pillow, hay wagons, corn cannons, duck races, children’s attractions, landscaping, changing permanent crops, and planting seasonal row crops. Picking local fruit that is fresh and ripe increases value. There is no comparison to the dry, flavorless fruit found at big box retail stores. Customers are willing to pay more for fresh, ripe local fruit. Customers come to the farm markets year round to shop for produce, prepared foods, preserves, pies and fruit smoothies. Children flock to the petting zoo, wagon rides, cattle train, mazes, picnic area, and the opportunity to pick and eat fruit. “Fond memories grown ripe here” is Murray Family Farm’s official slogan. In addition, the Murray family and their employees spread out, traveling to 28 certified farmers’ markets during the peak cherry and berry season. A paradigm shift has been detected, where families with young children are taking the time to connect with the food that they eat. Kern County leads the nation in obesity, diabetes, heart attacks and other life style diseases. These illnesses can be prevented through outdoor activities and the consumption of more fresh produce. More than 10,000 school children visit the farm annually, learning the value of eating more flavor- and color-rich fruits and vegetables.
Photo courtesy of Murray Family Farms
Vickie and Steve Murray
The benefits to the local economy are significant. Located in the Lamont-Arvin area, Murray Family Farms provides year-round employment to an economically disadvantage region. Dollars are collected from export and domestic customers, coastal cities and interstate travelers, and paid to the local labor force. Value-added agriculture provides 10 times more employment per acre than conventional agriculture. While most agricultural employment is seasonal and repetitive in nature, these full- and parttime jobs offer training in customer service, use of cash registers, public speaking, entertainment, education, crowd control, clerical, culinary arts and intensive dynamic horticulture. Value-added agriculture for the Murrays started back in 1989 with the trade of their home in Bakersfield for a farm house and vineyard, north and east of Arvin. Some of the grapes were removed to plant cherries. The cherries were popular at farmers’ markets and received higher prices. The joy of working with the public at certified farmers’ markets led to the establishment of the fruit stands and farms. Surplus fruit falling on the ground led to U-pick, more farmers’ markets, the bakery and the restaurant to capture value, producing pies and preserves. Slow October sales led to pumpkins and the October Fun Fest. The success of the October festival led to other festivals – Bluegrass and cherry, Easter egg hunt, and November pole barn movie night. Permits are now being finalized to add beer and wine tasting, and install Chevron gas pumps at the farm. — Steve Murray is the owner of Murray Family Farms.
KERN BUSINESS JOURNAL
Tehachapi vineyard is a ‘Cinderella story’ By Bob Souza
atty and Bob Souza never meant to win the awards hanging on the bottles in the Souza Family Vineyards’ Tehachapi tasting room. After moving from the San Fernando Valley to the Kern County mountain community in 1990, they set out to grow some grapes, a humble enough prospect in itself. What followed was a surprise to everyone with their first crush in 2005. They entered their Primitivo Zinfandel in The San Francisco Chronicle’s competition, the largest competition of American wines in the world, and earned a silver medal. Given that they truly had no experience in growing, this was indeed a remarkable achievement and the rest — as they say — is history. Rather than being satisfied with achieving just a one-hit wonder, they have entered four more times and won three more medals. This experience has taught them to “never say never.” In the four years since they opened their tasting room, they have had guests from over 30 states and 25 countries, from Europe to South America, Africa, and the former Soviet Union. They credit the amount of support they have received from the community and people in the industry for much of their success. Patty will tell you how honored and privileged they feel being the first commercial vineyard in this historic agricultural valley and how excited they are to see more growers following in their footsteps. Theirs is truly a Cinderella story, especially given the fact that they had virtually no experience or background in wine growing, or production when they began. They are optimistic looking forward. At least another half dozen fellow adventurers have already planted and some have even harvested. So they see this area growing rather steadily. In fact, they wish they had started sooner. As agro-tourism grows in the
John R. Schuler/Prospect Design Studio
Grapes surround the tasting room at the Souza Family Vineyards in Tehachapi.
Cummings Valley area, they see nothing but a bright future. There is a sign over the door of the Souza Family Vineyards tasting room that says it all: “Tuscany in Tehachapi.” Is this area the new Napa? Certainly time will tell, but to the Souzas, the answer appears to be yes. The tasting room at the Souza Family Vineyards at 26877 Cummings Valley Road is open on Fridays, Saturdays and Sundays, from 11 a.m. to 6 p.m. On any weekend, visitors will be made to feel like long-lost relatives, which is pretty much how everyone is treated. A warm friendly atmosphere and cordial staff imparts this “family visit feeling.” — Bob Souza and his wife, Patty, own Souza Family Vineyards in Tehachapi.
John R. Schuler/Prospect Design Studio
Grapes are picked at the Souza Family Vineyards in Tehachapi.
Wine industry fuels Tehachapi tourism By Chuck Mccollough
he New York Times headlined an article, “Wine takes over a town, prosperity follows.” The article described the widespread economic benefits to Walla Walla, Wash., resulting from its burgeoning wine industry. This scenario has played out in areas all over the country and is now the goal of an increasing number of wine growers in the greater Tehachapi area. Following in the footsteps of Bob and Patty Souza’s pioneering establishment of Souza Family Vineyard, with its beautiful tasting room and award-winning wines, Chuck McCollough started Triassic Legacy Vineyards and Tasting Room. With 7.1 acres planted in Zinfandel, Syrah and Viognier, it is the largest of the five commercial vineyards in the area. The 1,380-square-foot tasting room, with covered patios on four sides, provides a wine tasting venue, with views of Cummings Valley and the surrounding mountains. The tasting room is open year-round
Photo courtesy of the Triassic Legacy Vineyards
Visitors enjoy tasting at the Triassic Legacy Vineyards in Tehachapi.
from 11 a.m. to 6 p.m. on Friday, Saturday and Sunday. Three other vineyards with plans for tasting rooms have been started in the area, which certified viticulturist Ralph
Carter has proclaimed to be superior to Napa Valley. In support of his belief, he prepared a thorough petition to the U.S. Treasury Department requesting approval of the Tehachapi area as an “American
Viticulture Area.” Approval of the petition is awaiting the planting of a total of 80 acres of vines, after which growers will be allowed to put “Tehachapi” on their labels, instead of “California.” It seems to be widely accepted in the community that the wine industry will be the engine powering the development of Tehachapi as a major tourist destination. As this occurs, there will be economic benefits not only to businesses in Tehachapi, but also throughout Kern County, as visitors from more distant areas come to experience wine tasting in a beautiful new location away from heat, smog and crowds. Triassic Legacy’s harvest on Sept. 26, 2012 yielded 9.38 tons of grapes, which are now fermented and aging in the barrels. It is expected this harvest will yield about 6,750 bottles of wine. As the vines mature and open areas are planted, larger harvests are promised. — Chuck McCollough is the founder of Triassic Legacy Vineyards in Tehachapi.
KERN BUSINESS JOURNAL
Tehachapi ostrich ranch becomes industry leader By Debbie Williams
alph the Ostrich stares at visitors, interested but wary. His head—towering 7 feet above the ground—bobs gently at the end of his long, thick, pin-feathered neck. He blinks stupidly. “Is he flirting with me?” I asked Joel Brust, who was watching the exchange. “No,” Brust replied with a smirk. In fact, Ralph, an African Black Cross ostrich, doesn’t have the mental capacity to flirt. The 16-year-old tips the scales at around 350 pounds. His bulging eyes— about the size of ping-pong balls—exceed the circumference of his brain. By stark contract, Joel Brust, owner of Indian Point Ostrich Ranch in Tehachapi, barely summits 5 feet and, as evidenced by his success and national renown in the ostrich farming industry, far exceeds Ralph in the intellect department. “We’re the oldest and probably the largest ostrich operation in the West,” Brust said, as we stroll around his 80-acre ranch, nestled against craggy hills outside of Tehachapi. Despite a rocky road for the ostrich-meat industry and the more recent economic recession, Indian Point Ostrich Ranch has not only survived, but has shown consistent growth for the past eight years. As other ostrich farmers have come and gone, Brust has preserved his margins by demanding
product consistency; educating consumers; and eliminating brokers, who he blames for the 1990s ostrich-meat market crash. “In the early days of ostrich farming, a frenzy of buyers were lured into the market by unscrupulous middlemen promising a quick buck,” Brust explained. The era witnessed the selling of partnerships and other complex financial instruments to absentee investors looking for quick, high returns. With little market base and insufficient stock, the industry collapsed. Brust rode the wave, focused on developing superior breeding stock, aligned himself with other serious ranchers, and took advantage of prices during the fallout, all the while concentrating on educating consumers about the healthy attributes of low-fat ostrich meat. Brust has kept his focus primarily on the meat industry; he’s even developed a proprietary ostrich-steak, cut at carefully selected USDA meatpacking facilities. Brust has learned to introduce the meat at higher-end restaurants, then provide product to consumers through local grocery chains. Thanks in no small part to Brust’s diligence, there’s a growing demand for and knowledge about ostrich products nationally. “I left the high-tech world of computers at the top of my game,” Brust explained. “I wanted out and I wanted to farm. I did my research on traditional livestock—cows, pigs, chickens—and I looked into non-tradi-
Photo courtesy of the Indian Point Ostrich Ranch
Joel Brust holds an ostrich chick.
tional stock, like alpacas and potbelly pigs. In terms of potential and the bottom line, ostriches won.” “Take a whiff,” Brust said, waving his arm against the mountain backdrop. “What do you smell?” The answer was fresh Tehachapi mountain air. Ostrich waste produces no odor. “The ostrich pens don’t even
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need to be cleaned; their waste is so pure, it turns to dust in a few days and blows away.” Other farming advantages include the opportunity for high-density farming. An undeveloped half-acre comfortably houses two females and a male breeder bird, compared to around two grazing acres per bovine or sheep. Ostrich breed a lot earlier and more often than mammalian livestock, as well. A female ostrich is capable of producing eggs by the ages of 2 and 3 years, and thereafter can lay 50 eggs a year. About 95 percent of the processed bird is usable: meat yield is approximately 65 to 80 pounds per bird; feathers are used for dusters and costumes; fat becomes cosmetic oil; and the hide—about a 14-square-foot yield per bird—is coveted in the leather industry. Ratites—a group of flightless birds that include emus, rheas and kiwis—produce red meat that is lower in cholesterol, calories and fat than chicken or turkey. Also high in protein and iron, ostrich meat is recommended as a leading protein source from the American Heart Association, the American Diabetic Association and the American Cancer Association. “Today, Americans are willing to pay a premium price to eat natural, healthy, nutritious foods,” said Brust. “To achieve our potential, ostrich farmers must cut overhead and expenses that large beef growers routinely accept, move production and processing close to our customer base, and get the profits back to the ranchers,” said Brust. “This model will assure that more growers will look at ostrich as a family legacy operation.” — Debbie Williams is writing on behalf of Indian Point Ostrich Ranch, www.indianpointranch.com.
KERN BUSINESS JOURNAL
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Growing, selling Tehachapi’s apples is seasonal tradition By Dianne Hardisty
rowing apples in Tehachapi is a family industry. The small businesses that grow and sell the region’s apples are run by families. Their customers are families that make picking and eating Tehachapi apples an annual entertainment event. On plots of land that range from a couple of acres to 10 acres or more, orchards sprout thousands of apple trees. A fall harvest, which spans an average of six weeks, yields boxes of apple varieties that bear names such as Jonathan, Jonagold, Golden Delicious, Red Delicious and Gala. Alice Knaus has lived in Tehachapi since 1966 and has sold her apples from her 8-acre Knaus Ranch since 1970. She has watched generations of families flock to her mountain community in September and October to breathe the fresh air and spend the day picking apples. They come mostly from Bakersfield, Lancaster, Ridgecrest and Southern California cities. “At first, the people who came here did a lot of canning,” said Knaus, reflecting on her nearly half century of apple growing. “Now we see more families that come just to pick some fruit and have some family fun doing it.” Knaus, who operates her seasonal ranch with the help of her children and friends, makes more than 900 trees available for her U-pick customers, many of whom return year after year for the traditional harvest. During harvest weeks, Margaret Dries operates a small store on Easy Street that sells the Red Delicious and Golden Delicious apples her mother, Louise Cain, grows on a nearby 2-acre ranch. On the acreage around the store, Dries grows an assortment of vegetables and lavender. In addition to apples and vegetables, Dries sells lavender products, including lotions, oils and bath salts.
There are about a dozen apple growers in Tehachapi. They define what it means to “add value” to agriculture. Apples leave the community in a variety of forms – boxed as whole fruit, as well as in cider, butters, crisps, strudels and mouth-watering pies. And when the last fruit is picked from the trees and visitors strain to catch a glimpse of Tehachapi in their rearview mirrors as they head home, most of the farmers hang “gone fishing” signs on their gates. They turn off their lights for a year. Their fields will bustle again when the fruit hangs heavy on their trees.
Californian file photo
A box of freshly picked McIntosh apples.
First-time apple season visitors can get the lay of the land by searching the Internet for one of several “apple maps,” or by calling the Greater Tehachapi Chamber of Commerce. — Dianne Hardisty is the editor of the Kern Business Journal.
John R. Schuler/Prospect Design Studio
Apples, ready to pick in one of the many Tehachapi groves, attract visitors to the mountain community.
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KERN BUSINESS JOURNAL
KERN BUSINESS JOURNAL
Don’t ask customer if you don’t want to listen By Maureen Buscher-Dang
China is top market for California almonds
China has emerged as the No. 1 market for California almonds, the state’s largest food export. China and Hong Kong imported 236 million pounds of California almonds in 201112, according to the Almond Board of California. That’s a nearly 100 percent increase over the past three years and far outdistanced second-place Spain, which took in 157 million pounds of California almonds in the same period. Other countries in the “top 10” were India (119 million pounds), Germany (117 million), United Arab Emirates (94 million), Japan (62 million), Turkey (59 million), Canada (48 million), Italy (45 million) and South Korea (45 million). California’s 2012 almond crop, estimated to be about 1.9 billion pounds, is marketed to all 50 states and more than 90 foreign countries. Kern County is one of California’s top producing counties. --Kern Business Journal
ecently I bought a new car. It was a pleasant experience. The salesman was knowledgeable and courteous. And I believe I was given a fair deal. At the conclusion of the transaction, the salesman explained I would be receiving – via email – a customer satisfaction survey. He further explained that he would face some undefined “consequences” if I did not rate him at the very top of the scale. Anything less would be considered a “failing” grade. Sure enough, in a few days, I received a questionnaire – apparently from the car manufacturer – asking me to rate the service I had received at the dealership, with several questions directed specifically at the salesman. I dutifully rated the dealership and the salesman at the top of the scale. No way was I going to be blamed for “consequences.” So what did the manufacturer really learn from my “feedback?” What was the goal of the customer satisfaction survey? From the instructions I had received, only positive comments were welcomed. If the goal was Buscher-Dang to receive “honest” feedback that could be used to improve service and improve customer loyalty, the survey failed miserably. It seems nearly everywhere you go and everything you do, you face a customer survey. How did I like the hotel? Did I enjoy the flight? When I left a store restroom, I was asked to push a “yes” or “no” button to indicate if the facility was clean enough. This summer, Empathica, an international customer experience management consulting firm, surveyed 6,500 customers of U.S. companies. The good news is that 85 percent said they are willing to give their feedback to companies, despite being bombarded with
survey requests. The bad news is that only 46 percent believe companies actually use their feedback to improve their service or products. In this highly competitive marketplace, it is understandable that companies are obsessing on customer satisfaction surveys. But I tell my clients who ask me to help them organize and administer surveys: Don’t ask for feedback if you aren’t interested in listening and taking action based on the results. What do you call a customer who is ignored? A former customer. Factors to consider when designing and conducting customer surveys include: Length – Time is precious. If conducted via mail, website or by email, the survey should take between 2.5 and 3.5 minutes to complete. If conducted on a mobile device, it should take between 60 to 90 seconds to complete. Let the respondent know up-front how long the survey will take. Timing—Administer a customer survey at a convenient time and place. Asking for customer feedback at the conclusion of a tough negotiation or when a customer is trying to get out the door likely will fail. But don’t wait too long. One to five days is optimal. Thirty days is too long. Memories fade quickly. Response – Read and quickly respond to customer feedback. Let customers know how improvements will be made. Questions – Survey questions should be relevant, not overly wordy, and designed to improve customer service. Use questions that are “scalable” – that can provide a numerical or qualitative spectrum. Also include a few “open ended” questions to give respondents flexibility and the ability to be descriptive. If personal information is requested, limit the questions and make responding optional. — Maureen Buscher-Dang is a Bakersfield marketing and public relations consultant. She can be reached through her website www.buschermarketing.com.
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KERN BUSINESS JOURNAL
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KERN BUSINESS JOURNAL
KERN BUSINESS JOURNAL
Bakersfield Community Development
New city department promotes economic revival
n September, Doug McIsaac was named director of Bakersfield’s new Community Development Department, which combines the activities of the former departments of Development Services, Economic Development and Community Development. McIsaac is the former community development director of the City of Westminster, the planning director of West Covina, and a senior planner for Redondo Beach and Laguna Beach. The Kern Business Journal recently asked McIsaac to identify the opportunities and challenges he will face in his new post.
What aspects of Bakersfield’s economy have the greatest potential for growth? Bakersfield and Kern County are very fortunate to have some industries, notably energy and agriculture, that are doing well, even in the current economy. The region is not only home to the long-established petroleum industry; it is the location of emerging solar and wind energy industries. As a result, there is the opportunity to encourage the development of Bakersfield as the energy “hub” of California and the West. In addition to production occurring McIsaac in Kern County, corporations and industries that support the energy industry are located in Bakersfield. By concentrating in one location, companies can often partner together in ways that enhance their own economic well-being, as well as the growth of the local industry. The same concept also can be applied to agribusiness, which is becoming more dependent on technological and engineering advancements. Bakersfield has the opportunity to become the home for industries that help make agribusiness more efficient and productive.
The course for advancing this concept involves promotion and recruitment. Bakersfield needs to partner with organizations, such as the Kern Economic Development Corp., and industry leaders. An environment needs to be created that makes it easy and inviting for companies to locate in Bakersfield. This includes finding suitable land, buildings, infrastructure, utilities, and making sure the development process is as easy and accommodating as possible.
What interesting development projects are coming on line? The project I am most excited about is the new baseball stadium to be built for the Bakersfield Blaze. Construction is scheduled to start in early 2013, with opening in 2014. The stadium is being built on the site of the proposed “Bakersfield Commons” development, at the corner of Coffee and Brimhall roads. The stadium should be a great fit for the project that will ultimately include upscale shopping, restaurants, offices and residential units. I expect that the new ballpark will fast become another selling point to promote the economic development of Bakersfield. Sports, entertainment and culture are all important to attracting business and industry. This will be a significant advancement for Bakersfield in that regard.
How do you see your role in Bakersfield’s development? When City Manager Alan Tandy hired me for this position, he made the astute decision to create a new department -- the Community Development Department, which combines the former Development Services Department (Planning, Building and Code Enforcement) with the Economic Development and Community Development Department (redevelopment, economic development and housing). All the city’s development functions now are together in one unit. My role is to coordinate and guide these resources in a
way that will improve the quality of life and economic vitality of Bakersfield. The city already is recognized as being very business-friendly. I will build on that reputation. I also will implement software systems advancements to make the development process easier and more convenient.
What is the most challenging aspect of your job? The state’s elimination of redevelopment agencies has altered the landscape for local economic development. Prior to the dissolution of redevelopment last year, the city was receiving approximately $10.7 million annually in tax increment revenue that could be used for infrastructure improvements to support new development, or financially assist in bringing new businesses to the city. With those resources gone, the city needs to pursue economic development in more resourceful and inventive ways. The creation of the new Community Development Department will help do that. Offering a seamless, integrated, “one-stop shop” that assists with everything from finding a suitable location, addressing zoning and land-use issues, and obtaining permits and approvals can help attract business and industry to Bakersfield. But the city can’t do it all on its own. We need to work cooperatively with business and industry leaders to serve their needs and attract new companies that will help grow their industries as a whole. We also need to work with educational institutions to train and educate our workforce to provide the skills that these industries need and provide jobs for our residents. My challenge is to help bring this all together to develop an engine that is driving Bakersfield forward economically. It is an exciting challenge. Bakersfield and Kern County have much opportunity and potential waiting to be realized.
What’s up with App(s)? By Ken Carter
Ken Carter is the president of Watson Realty ERA in Bakersfield. “What’s up with App(s)?” is an occasional Kern Business Journal feature that asks Kern County business leaders to identify their favorite App(s) for mobile devices and how they use them.
or starters, I believe as a business owner, the business and personal sectors of our lives are becoming increasingly more difficult to identify and separate. Whatever helps one is similarly helpful with and adaptable to the other. My very favorite App is the device itself -- the iPhone. As a determined, “non-Apple” disciple, I was forced into a new phone and was strongly encouraged to give the iPhone a go. It was one of the very best business decisions I have made. Even though I disagree with Apple’s philosophy that Apple knows better about what the consumer needs than the consumer – “Steve Jobs,” by Walter Isaacson,” -- I have found the absolute Carter pinnacle of productivity through the iPhone platform. I won’t waste space trying to list every iPhone attribute. But a summary: broadband access for unlimited email with sufficient download capability for attached docs, spreadsheets and PDFs; web browsing; real-time GPS mapping; a fully functional scientific calculator; voice memo recorder; voice-recognition email and texting; notes section with email functionality; plus a highcaliber still and video camera, along with a full-featured 4G cell phone – all standard issue. I find myself conducting as much, if not more business from my phone, than my desktop. As for Apps themselves: The Cozi calendar. My wife found this extremely valuable App that we use daily. There is seamless integration between MS Outlook Calendar, with added features that make keeping a business and a very busy family (my wife and I share seven kids between us) not only possible, but much easier. It features shopping lists, to-do lists and journaling, in addition to a solid calendar that syncs between my phone and any other desired phone, mobile device or user. Very, very cool. The “Keeper.” This App holds all of my sensitive information (accounts, passwords, etc.) It has a built-in encryption system, with auto-destruct and online backup if desired. In the same vein, I am a big fan of the Mint.com platform, which also offers a mobile App. It powerfully syncs all bank and credit accounts between desktop and mobile devices through necessary password protection, allowing for real time balances along with alerts, updates and a number of custom monitor features for personal, as well as business banking. Watson Realty ERA’s property database, which can be found by going to WatsonRealty.com. While Watson Realty ERA doesn’t have an App per se, we do offer a mobile version of our WatsonRealty. com website that allows for easy browsing of both company and MLS inventory. If a larger search is desired, ERA Real Estate’s mobile App, Smarter Agent, is an extremely powerful and fully functional MLS search tool that allows anyone nearly-full access to real estate listed for sale with a multiple listing service (MLS) around the nation, including right here in Kern County.
KERN BUSINESS JOURNAL
Business Book Shelf
‘The Power of Habit’ provides powerful tools By Michael Russo
ustomer psychology and behavior has always fascinated me. Why do people act or not act on certain information, buy or not buy particular items? The question obviously intrigued New York Times investigative reporter Charles Duhigg, as well. The resulting answer to his curiosity is the bestselling book, “The Power of Habit.” (Random House, 2012) It is by underRusso standing habits that Starbucks trains their employees to give superior service. It also led coach Tony Dungy to Super Bowl success, allowed Proctor & Gamble to transform a dying product into a billion dollar cash cow, and guided Paul O’Neill when re-energizing Alcoa. “The Power of Habit” works on several different levels: it is well researched (as 60-plus pages of end-of-book notes will attest to); entertainingly written (a bevy of captivating stories accompany the latest findings on brain activity and human behavior); and, most of all, readily applicable to both the reader’s personal and business life. It is to this latter point that the author structures the book. Part One exam-
ines the “Habits of Individuals,” by introducing us to the concept of a “Habit Loop.” From there the reader can begin to examine why he or she has adopted certain behaviors, both good and bad. Want to stop snacking? Need to start exercising? Examine your habits and begin to transform your personal life. The same can be said for businesses. Part Two is entitled “The Habits of Successful Organizations.” Again Duhigg makes compelling arguments on why both organizations and their consumers usually behave in predictable fashion. By understanding these habits we can renovate our organization and better serve our customer. Indeed, some may go so far as to say “manipulate our customer.” One of Duhigg’s many poignant anecdotes is of a national chain store that examined customer buying habits such that it was predicting one’s pregnancy early in the second trimester. After some initial consumer trepidation, the chain revamped their marketing efforts to make their “knowledge” appear less invasive. The book concludes with the third section, “The Habit of Societies.” How does our collective “habit loop” help engineer social change? Why did Rosa Parks’ arrest in 1955 spark national upheaval when similar incidents involving other passengers earlier in the year failed
to yield even passing interest? Illuminating in its own right, the book concludes with an appendix designed to let the reader put the book’s ideas to work in their own life. In doing so, “The Power of Habit” becomes both an informative business resource and a powerful tool for personal improvement. — Michael Russo is the owner of Russo’s Books in the Marketplace shopping center in southwest Bakersfield. He also is a business instructor with the Kern High School District.
Available formats: • Google eBook $12.99 • Hardcover $28 • Compact Disc $40
Alternative fuel vehicles pose deadly risks to first responder crews By Michele Bresso
s businesses try to cut costs, go green and address state legislation encouraging the purchase of clean vehicles and equipment, we’re seeing more alternative fuel vehicles on the roads. Having more of these consumer and fleet vehicles creates an increased chance of accidents involving alternative fuel systems. Kern Community College District Clean Energy Center is training accident first responders, corporate vehicle maintenance personnel and others how to deal with the risks of the new technology. The training is free. The Clean Energy Center’s Alternative and Renewable Fuel and Vehicle Technology Program trains firefighters, police officers, paramedics, ambulance and tow truck personnel, vehicle mechanics and others how to handle the risks of explosion, deadly electric shock and other on-site hazards when alternative vehicles are involved in an accident. The risk is real, according to William Elliott, the Clean Energy Center’s lead energy efficiency and alternative fuel instructor. “If an electric vehicle is involved in a head-on collision and the main electric cable is not disconnected, it can electrify
the entire vehicle,” Elliott said. “A police providing training to first responders, who officer who leans into the car to check on are called to accidents involving alternathe occupant and completes the electric tive fuels, alternative fuel vehicles and circuit will die instantly.” advanced technology vehicles. Instruction The Alternative and Renewable also includes how to respond to emerFuel and Vehicle Technology Program is gency situations involving alternative fuel funded and administered by the California vehicles, such as disabling airbags and Employment Training Panel, in partnerdisconnecting high-voltage battery packs. ship with the California “If our training can Energy Commission, to save the life of even one support a transition from person, it’s well worth it,” petroleum-based transElliott said. portation to alternative For a municipality or and renewable fuels and company to participate clean, low-carbon vehicle in the program, payroll technologies. must be reported in — William Elliot Training is available California for all trainees. throughout California. All enrolled participants Kern Community College District Clean must be considered full-time — miniEnergy Center is providing the training mum of 35 hours per week. Participants from the southern Kern County border to must earn a set level by county minimum the California/Oregon border. Elliott said wage, maintain a perfect attendance rate, 39 fire departments have shown interest in and meet a 90-day retention period after the program, with Bakersfield, Coalinga training ends. and Humboldt fire departments already Qualified employers seeking training scheduled for training. Elliott said other for their personnel should contact Bill municipal agencies and businesses are Elliott at 661-395-4109 or email him at welcome to participate. email@example.com. The training focuses on job skills to produce and distribute new alternative — Michele Bresso is the associate fuels and to design, construct, install, vice chancellor, government and exteroperate, service and maintain new fueling nal relations, of the Kern Community infrastructure and vehicles. This covers College District.
“If our training can save the life of even one person, it’s well worth it.”
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Pick the Best BROWN ARMSTRONG Certified Public Accountants The Central Valley is one of the worldâ€™s most productive agricultural regions. Whether you grow the crops or provide the supplies and equipment that helps grow and harvest them, your business plays a vital role in the global food chain. Your business results change with the season and the weather. You need a team that knows your business and all of its variables. Brown Armstrong knows. For over 30 years, weâ€™ve provided services to nut and stone fruit growers, table grape growers, citrus growers, rice growers, various row crop growers, including specialty and organic crops, cow-calf and stocker operation ranchers, feedlots, cooperative, fruit and nut marketers, custom harvesters, seed suppliers, feed and supplement suppliers, entomology advisors, and various support providers. Our agriculture team has the knowledge and experience that few accounting firms can offer and we have the dirt on our hands to prove it.
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Insect Lore: Where bugs aren’t ‘pests’ By Dianne Hardisty
Shafter company has not only turned itsy bitsy insects into big business; it has made them tourist attractions. More than four decades ago, entomologist Carlos White, who had moved to the San Joaquin Valley from his native Illinois to work for a chemical company, founded Insect Lore. White’s “day job” was to “grow” pests so his company could research ways to kill them. White’s son, John, recently recalled that it broke his father’s heart to kill the bugs. Instead, White turned his focus on ways to keep bugs alive. He developed a secret recipe for caterpillar food that would keep insects alive so they could be shipped to homes and classrooms. That led to the creation of an international company that sells “insect kits” through hobby shops, department stores, classroom suppliers and online retailers. Sixty percent of the company’s customers are individuals, including couples intending to release butterflies at their weddings. The rest are educators. The concept is simple: Retailers sell “kits” that include viewing habitats to customers. Inside the kits are certificates that can be sent to Insect Lore and redeemed for larvae, which are shipped to the customer. The company sells kits for growing butterflies, ladybugs and praying mantises,
Eric Shumate AVP, Credit Officer
Photo courtesy of Insct Lore
Insect Lore’s Bugseum in Shafter is adorned with two-story high paintings of insects.
as well as ant farms, science books, toys and DVDs. Carlos White now is retired. John directs Insect Lore’s U.S. sales from the company’s headquarters in Shafter. John’s sister, Jennifer, directs European sales from her hometown in Cornwall, England. “We’ve experienced double digit growth nearly every year since we began doing business,” said John White, explaining that his company promotes its products through Facebook, Pinterest, Twitter and national
SVP, Credit Administrator
direct response television ads. “We are seeing a truncation of sales, due to the overwhelming success of online retailers, such as Amazon.com,” he said. “We used to sell to over 4,000 specialty retailers, but now that list is down to about 1,200. Although our sales continue to grow, we are selling to fewer and fewer businesses.” And the company’s reach has extended beyond this planet. In 1999, NASA’s Columbia Space Shuttle carried Insect Lore’s painted lady butterflies into space
AVP, Portfolio Manager
Rick Brauer VP, Manager
to determine the effects of zero gravity on metamorphosis. The result? All the butterflies successfully emerged aboard Columbia. The butterflies and their habitat have been preserved in a permanent display at the National Air and Space Museum in Washington, D.C. To accommodate the demand from youngsters, families and educators to tour Insect Lore’s Shafter headquarters, where insects are hatched and kits prepared, the company created a “Bugseum.” A workshop, museum and gift shop located at 132 S. Beech St. in Shafter, the Bugseum is plastered with two-story high paintings of ants, lady bugs and praying mantises. Inside, visitors can peek through glass to watch insects and company employees hard at work preparing kits that are destined to be shipped around the world. Soon Insect Lore will launch a new division – ButterflyGram. “We plan to send live adult butterflies in a colorful habitat via overnight delivery for immediate releasing,” explained John White. “We are positioning this concept as an alternative to receiving fresh flowers. Once the butterflies arrive, you can watch them for a few days then release them. It’s a great alternative to sending flowers for Mother’s Day, Valentine’s Day, Easter, or any occasion where one would normally think of sending a bouquet. We think this will be a massive hit for us.” — Dianne Hardisty is the editor of the Kern Business Journal.
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KERN BUSINESS JOURNAL
In the workplace
Pros, cons in having part-time work force By Holly Culhane
hen the Great Recession rolled through the U.S. economy in 2008, it triggered a flurry of business cost-cutting steps. The most dramatic were the mass layoffs that claimed millions of jobs. But less noticed was the wave of work-week hour reductions taking place. The Washington Post reported last fall that there are 8.6 million workers in the U.S. who are employed part-time “for economic reasons,” meaning they would prefer to work a full 40-hour week, but their jobs have been reduced to part-time, or they cannot find full-time jobs. This number is up from 4.5 million Americans in the same situation in late 2007. Besides paying workers less hourly salaries, in most cases, the part-time status eliminates the obligation to pay for a wide variety of employee benefits, including health insurance. The part-time trend is expected to accelerate as companies face complying with the Affordable Care Act (ACA), the federal health care reform law. Beginning in January, the law requires companies with 50 or more full-time employees to provide workers basic health care insurance, or face paying fines. Some small companies, with just over 50 workers, have begun cutting hours to roll back their full-time work forces and eliminate the need to provide health insurance. The law defines full-time as employees who work 30 or more hours per week. Even some large corporations are flirting with the idea of converting many employees to part time status to avoid the ACA insurance requirement. Beginning last February, in a test involving four markets, Darden Restaurants Inc., the owner of Olive Garden and Red Lobster, bumped some of its full-time employees down to part-time status. In December, just two days after the company announced a lower profit Culhane outlook for 2012, Darden acknowledged receiving a public backlash, and reported employee and customer satisfaction declined at restaurants where the tests took place. “What that taught us is that our restaurants perform better when we have full-time hourly employees involved,” said Bob McAdam, who heads Darden’s government and community relations. Darden has not, however, ruled out using more part-time workers in the future. What that should tell all employers – big and small – is that there are pros and cons with having a part-time work force. Staffing strategies are complex and decisions should be based on more than health insurance cost concerns. The hospitality and retail industries have long utilized part-time workers. But companies in highly competitive industries, where recruiting and retaining good employees is difficult, should cautiously consider “going part time.” Part-time pros – No need to pay for certain benefits, such as life and health insurance, as well as vacation, holiday and sick leave. Employees can be required to work more flexible work hours. Part-time cons – Having two part-time employees, instead of one full-time, increases supervisory responsibility. Top employees will stay only until jobs open at companies that pay benefits. Employee turnover and training costs are high. Recruiting top employees is difficult. Overall productivity may decrease. There is no such thing as “one size fits all” for workplaces. If part-time workers make sense for your company, utilize them. If not, stick with the full-time options. Either way, it’s important to remember that before making this decision, carefully weigh your options and examine your staffing needs. — Holly Culhane is president of the Bakersfield-based human resources consulting firm P.A.S. Associates and P.A.S. Investigations.
Kern’s wind industry gets one-year reprieve As part of the tax package passed in the “fiscal cliff ” New Year’s Day showdown, Congress extended the wind energy industry’s 2.2 cent per kilowatt tax credit for one more year. Previously, the PTC, or production tax credit, applied only to wind projects that were fully built and producing electricity. Now it goes to any wind farm that is “under construction” by the end of 2013. The one-year extension is seen as critical to making the wind industry cost-competitive with solar and natural gas. California gets about 5 percent of its electricity from wind power, while most of the rest comes from natural gas, nuclear power and hydropower. The state has set an ambitious goal of getting 33 percent of its power from renewable sources by 2020, and utilities have signed several renewable energy contracts with developers to meet that goal. The vast majority of wind turbines in California are clustered in three regions: the Altamont Pass between Livermore and Tracy, Tehachapi near Bakersfield and the San Gorgonio Pass near Palm Springs. --Kern Business Journal
KERN BUSINESS JOURNAL
County program promotes personal ‘healthy choices’ By Heidi Carter Escudero
utrition and physical activity education is provided by the Kern County Human Services Department to CalFresh participants and others eligible to receive these services through a Supplemental Assistance Program-Education (SNAPEd) grant awarded by the California Department of Social Services and the Food and Nutrition Service (FNS). This is the second year that Human Services and its partners, the Kern County Department of Public Health Services, Aging and Adult Services and Pacific Health Education Center, have participated in the program. As the cornerstone of the U.S. Department of Agriculture nutrition assistance programs, the SNAP program plays a vital role in helping to improve nutrition, particularly among low-income individuals. The goal of SNAP-Ed is to improve the likelihood that people eligible for SNAP will make healthy food choices within a limited budget and choose physically active lifestyles consistent with the current Dietary Guidelines for Americans and MyPlate. In the Healthy Choices program, the FNS-approved curriculum was used by health education assistants to educate over 2,000 participants during the first year. The Pacific Health Education Center, which provided nutrition and physical activity education, and food demonstrations, educated more than 300
participants. Human Services’ Healthy Choices website provides nutrition and physical education information, workshop schedules and a listing of farmers’ market locations and operating hours. Knowing where to buy fresh, local produce is critical for many living in areas without easy access to these healthy choices. Using local farmers’ markets also supports local farmers. Included in the program’s participant goals are: to make half of each food plate comprised of fruits and vegetables; eat whole grains; switch to fat-free or low-fat milk products; and reduce the consumption of sugary beverages. Additional goals include increasing physical activity and reducing time spent in sedentary behaviors. The project also teaches participants how to maintain appropriate calorie balances during each life stage. During this second year, nutrition and education programs will continued to be provided at Human Services offices, community centers and schools. Public Health will provide workshops in many areas throughout Kern County. Aging and Adult Services will provide workshops at senior centers and provide infomercials to inform seniors that healthy choices and physical activity can help improve their overall health. — Heidi Carter Escudero is assigned to the Kern County Human Services Department’s outreach and communications office.
University students become ‘junior’ SBDC consultants By Kelly Bearden
he Small Business Development Center at Cal State Bakersfield has started utilizing students to help local businesses grow their companies. Business students will work alongside the SBDC’s seasoned consultants to assist local small businesses. The Junior Consultant Group will include both graduate and undergraduate students. “The program will provide CSUB business students with opportunities to apply academic knowledge to assisting real businesses in real-world settings. This is a win-win proposition for the small business community and for our students,” said Dr. John Emery, dean of the School of Business and Public Administration. One of the greatest services the junior consultants will provide will be to assist local businesses in integrating technology applications into their firms. For example, a junior consultant may assist a business with QuickBooks accounting software or help design a website. Finance majors can perform detailed financial projections for budgeting or to support a loan application, while marketing students will be called on to provide social media tips. Several students are interested in helping businesses launch crowdfunding campaigns to raise capital for projects. The type of expertise the SBDC can
provide through the Junior Consultant Group will vary over time, depending on the background and time commitment of students participating in the program. “In addition to learning opportunities outside the classroom, a growing number of Business Administration faculty are collaborating with the SBDC to integrate authentic team projects into courses,” said Dr. Mark Evans, Economics Department chairman. The SBDC invites Kern County small businesses to propose a class project for an MBA course to be offered in spring quarter. Projects can involve elements, such as writing a business plan, feasibility studies, marketing plans or business turnaround suggestions. Student teams involved with course projects will work with the business for a 10-week period. Although the SBDC compensates its junior consultants, consulting services provided through the SBDC remain free of charge to local businesses. While sufficient information must be provided to satisfactorily complete student projects, confidentiality needs are honored. For additional information, email firstname.lastname@example.org., or visit the SBDC website at www.csub.edu/sbdc. — Kelly Bearden is director of the Small Business Development Center, which is located at California State University, Bakersfield.
KERN BUSINESS JOURNAL
In the Oil Patch
Auctions harm state’s economy, consumers
atherine Reheis-Boyd is the president of the Western States Petroleum Association. She is no stranger to Kern County, having lived and worked in Bakersfield for approximately 20 years. She is involved in ongoing discussions regarding the implementation of California’s “cap-and-trade program,” which is part of AB 32, the state’s far-reaching global warming law. “In the Oil Patch” is a regular Kern Business Journal feature that asks local industry leaders to comment on developments in Kern County’s oil field.
How does California’s cap-and-trade program work? Cap-and-trade establishes a ceiling, or “cap,” on greenhouse gas emissions for a relatively small number of energy users and producers. Businesses that emit more than the “cap” must either reduce their emissions or purchase emission allowances. Businesses that emit less than the cap can sell their surplus or extra allowances. With regulated businesses trading these emissions allowances among themselves, we can achieve the required total reductions. But California’s program goes a step further. Instead of issuing the necessary allowances free of charge, as originally planned, the California Air Resources Board has withheld a large number of allowances from key industries and is requiring those businesses to buy back the allowReheis-Boyd ances at periodic auctions in order to continue operating in the state. The November auction alone generated about a quarter of a billion dollars for the state and costs are expected to grow into the billions of dollars in future years. Many businesses are concerned that having to buy the allowances CARB has withheld will significantly raise energy and other costs not only for them but for consumers, and put them at a serious competitive disadvantage with their out-of-state counterparts.
How will cap-and-trade impact the economy in Kern County and California? The independent Legislative Analyst’s Office (LAO) has concluded that CARB’s deci-
sion to withhold and auction allowances will raise costs and drive businesses, jobs and tax revenues out of California to states that don’t have a similar law. The LAO also warned that regulated businesses are likely to pass those higher costs on to consumers in the form of higher prices for fuel, utilities and other goods and services, meaning virtually no business or consumer will be spared. In Kern County, home to agriculture, energy producers, transportation and many other energy-intensive businesses, those higher energy costs could jeopardize jobs and slow the region’s economic recovery. With unemployment here 20 percent above the state average, that’s a troubling prospect.
Is the current cap-and-trade auction necessary to meet California’s climate change goals? The LAO recently concluded that California can achieve the GHG emissions reductions required under AB 32 without an auction. It is the declining cap on emissions – and not the auction of allowances CARB withheld from some of the state’s largest businesses – that will achieve the necessary greenhouse gas emission reductions. Ironically, the flight of production outside of California to avoid higher costs could simply shift global warming emissions outside our borders, impairing the program’s environmental integrity. Because California is the only state with this cap-and-trade auction program, consumers here will singlehandedly bear the increased costs and the threat of higher unemployment, while failing to have any meaningful impact on global warming.
What is WSPA’s position on cap-and-trade? Like many other California industry groups, WSPA believes a well-designed cap-andtrade program can reduce greenhouse gas emissions with the least negative impact on the state’s consumers, businesses and economy. We don’t support this auction created by CARB because its main purpose appears to be generating revenue for the state, rather than reducing greenhouse gas emissions. This auction, as designed, will divert billions of dollars from our economy with no significant environmental benefit. WSPA agrees with the California Chamber of Commerce’s view that AB 32 did not give CARB the authority to withhold allowances from businesses for the purpose of raising revenue. WSPA remains committed to working with CARB, the governor and the Legislature to create a cap-and-trade program that will give California a chance to meet its climate change goals, while protecting jobs and our state’s economy.
KERN BUSINESS JOURNAL
HECA plant to make ‘green fertilizer’ When SCS Energy acquired Hydrogen Energy California (HECA) in 2011, it modified the project’s design, adding a new component – fertilizer production. The HECA plant will produce a clean source of electricity using hydrogen, which will result in lower air emissions than conventional power plants of its size, including natural gas. HECA’s new, multi-purpose design now also enables the production of about 1 million tons per year of low-carbon products (urea and urea ammonium nitrate/ UAN) for use as fertilizer. HECA will capture about 90 percent of the carbon dioxide (CO2) produced and safely store about 3 million tons per year of CO2 nearly a mile underground in geologic formations. Based on this capture rate, HECA fertilizer production will prevent the release of a significant amount of CO2 into the atmosphere. CO2 is a greenhouse gas linked to global warming. HECA’s local fertilizer production also will help keep prices down because of reduced transportation costs, and lessen the nation’s dependence on imports. Today, the U.S. struggles to produce 50 percent of its demand, which continues to increase. In California alone, fertilizer demand totaled approximately 1.3 million tons in 2010, with about one-third of its supply coming from foreign imports. Construction of the HECA plant, west of Bakersfield, is pending approvals by federal and state agencies. Information about the project and regulatory procedure can be found on the California Energy Commission website at www.energy.ca.gov/sitingcases/hydrogen_energy — SCS Energy and Kern Business Journal
231 21st Street Bakersfield, CA 93301 douglasstruckbodies.com
Cal State Bakersfield adds agribusiness program By Mark Evans
al State Bakersfield now offers an agribusiness program, with courses in law, economics, marketing, management, finance, international trade and accounting. Local professionals teach many of the
courses. The timing couldn’t be better for CSUB to add an agribusiness program. The value of Kern County agricultural production has more than doubled from $2.3 billion in 2001 to $5.4 billion in 2011, not counting food manufacturing, where employment increased 62 percent. Agriculture creates more than 50,000 farming and manufacturing jobs in Kern County. According to a U.S. Bureau of Labor Statistics, 19 percent of employees in crop production are in management, Evans business and financial occupations. In food manufacturing, 5 percent of jobs are in these occupations. Before starting the program, CSUB had to consider whether it could provide a curriculum of sufficient depth for its graduates to have an employment niche. The catalog at Fresno State includes more than 150 ag-related undergraduate courses, while Cal Poly San Luis Obispo has roughly twice this number. Employers assured CSUB that while specialized degrees often are required, a business degree orienting graduates to the ag industry and its culture would be well received for many jobs. Recruitment costs are large and retention low when these jobs are filled from outside Kern County. Program planners observed that the hundreds of courses offered by agriculture schools had to serve many degree programs besides agribusiness — animal science, dairy science, food science, horticulture, crop science, and viticulture — and determined we could offer an agribusiness program comparable
Phone: 661.327.0258 Toll Free: 800.635.7641 Fax: 661.327.3894
in total units and breadth to other California State University campuses, although with fewer options. For example, where CSUB may require a single course, these schools may require one from a checklist of courses. One shortcoming could not be overcome. The other agribusiness programs require two or three science courses – soil science, plant and/or animal science -- not offered by CSUB. However, these courses can be completed at Bakersfield College once CSUB transitions to a semester-based calendar. Resource constraints also needed to be overcome. While the CSU Chancellor’s Office has declared a moratorium on new degree programs, agribusiness was developed as a concentration under the existing business administration major. Curriculum committees also now must consider proposals from a zero-sum perspective. If a new course is to be added, an existing course has to be discontinued. Several courses were mothballed and the new courses were designed to simultaneously serve other areas. For example, agricultural marketing can be taken by marketing students and agricultural economics by economics students. One-half of the courses are scheduled in each alternating year, reducing to less than $20,000 the annual external support needed to financially insulate agribusiness from state budgets. An endowment capable of generating an annuity of this size would sustain the program in perpetuity. A steering committee is being formed to maintain alignment with industry needs. Course syllabi and materials will be gathered to monitor content of comparable courses offered by other agribusiness programs. Employers are being asked to support internships, while every agribusiness student is being encouraged to complete at least one internship prior to graduating. — Mark Evans is a professor and chairman of the Economics Department at Cal State Bakersfield.
KERN BUSINESS JOURNAL
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CAPTURE THE WARMTH OF THE SUN Small business owners must save for retirement Go Solar to Heat Your Water! Small Business Finance
By Steven Van Metre
I Solar Water Heating Basics For Commercial–Industrial Customers Workshop The Solar Water Heating Basics for Commercial – Industrial Customers Workshop will inform business operators, property owners, and facilities managers about solar water heating technology and systems, the benefits of heating your company’s water with the warmth of the sun, and the availability of rebates for qualifying systems offered through the California Solar Initiative – Thermal Program. A question-andanswer session will follow the presentation. Light refreshments will be served. Advance reservations are requested for this no-cost workshop.
Thursday, February 21, 2013
9:30 a.m. – 11 a.m.
Kern Agricultural Pavilion 3300 East Belle Terrace Bakersfield, CA 93307
Eligible commercial hot water end users include but are not limited to: Gyms Restaurants Laundromats Hotels and Motels Commercial Laundries Agricultural Processes Convalescent Homes Food Processors Car Washes Hospitals
n good times and in bad times, my clients, the owners of a Bakersfield small business, have worked hard, been frugal and emphasized good customer service to build their company. The couple, who I will call Bob and Mary to protect their privacy, moved to Bakersfield from Southern California 20 years ago. They bought a failing business and turned it around. Now in their mid-50s, with two grown children, they continue to pinch their pennies as they steer their business through today’s tough economy. When a friend suggested that they seek my help with establishing a plan to fund their eventual retirements, they were skeptical. Their initial response: What retirement? We will never be able to retire. Most of our money is going back into our business to keep the doors open. Mary and Bob are not alone. American College professor Mary Quist-Newins, who also directs the State Farm Center for Women and Financial Services, recently surveyed 1,255 small business owners. She and her researchers found one-third did not have pensions, including 401(k) plans, or retirement savings. They had no idea how they will retire. The survey also found that these business owners did not know how much it will cost them to retire. And even those who are making retirement plans told researchers that they know they are not setting aside sufficient funds or taking advantage of existing tax incentives because they are going it alone – not seeking the advice of a financial planner, accountant or attorney. A few years ago, Mary and Bob set up a tax-deferred 401(k) plan to begin saving money and to offer a savings incentive for their few employVan Metre ees. However, the plan was ill-conceived; they were unable to “max out” their contributions; and few employees participated. The company sponsoring the 401(k) plan did not provide investment advice, nor help employees enroll. A friend, who had successfully retired from his small business, convinced Mary and Bob to get professional advice. He told them they were too focused on running their business. An “outsider” would view their situation differently and better recognize savings opportunities. Mary and Bob’s retirement prospects now look brighter. Here are some steps they have taken: • Management of the 401(k) plan was given to an adviser who provided personal service advice and enrollment assistance. The employees became excited and enrollment jumped. • With greater employee participation in the plan, the couple can maximize their contributions. • Bob and Mary included their present business operating plans into their future retirement plans. They were shown how their assets can be used to support their retirements in 10 years. • The couple now works closely with a financial adviser to balance their company’s dayto-day needs with their future retirement plans. There are numerous options for small business owners to establish retirement savings plans. Federal and state tax laws include incentives that reduce the impact on companies’ bottom lines. To those small business owners who say they cannot afford to save money for retirement, I say they cannot afford not to save. Seek the advice of a competent financial adviser, accountant or attorney to establish a plan. — Steven Van Metre is a Bakersfield financial planner who specializes in retirement income strategies and teaches a retirement planning course for the Levan Institute for Lifelong Learning at Bakersfield College. His website is www.MyRetirementPlanningCoach.Com
Mission Bank, Mojave Desert Bank merge Bakersfield-based Mission Bancorp, the parent holding company for Mission Bank, has announced the completion of its merger with Mojave-based Mojave Desert Bank, N.A. Mojave Desert Bank branches in Mojave, Ridgecrest, Lancaster and Helendale now will operate as branches of Mission Bank, which will expand and strengthen the community financial services to customers in the San Joaquin Valley, as well as the High Desert communities of Kern, Los Angeles and San Bernardino counties. As a result of the merger, Mission Bank has approximately $400 million in assets, $350 million in total deposits, $183 million in total loans, 85 employees, and a network of seven business banking centers, or branches. --Mission Bank
Architect firm opens Bakersfield office
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TETER, one of the largest architectural and engineering firms headquartered in the San Joaquin Valley, has opened a new Bakersfield office at 1200 Discovery Drive. TETER was established in Visalia in 1979. Over the past 33 years, the firm has grown to a staff of 85, and branched out to provide architectural, electrical/mechanical/plumbing/structural engineering, commissioning, CASp Accessibility Surveys, and sustainable design services. Notable TETER projects in Kern County include: the Chevron Energy Center, Paramount Citrus Cuties Plant in Delano and the Kern Schools Federal Credit Union headquarters, which was the first LEED certified building in the San Joaquin Valley. --TETER
KERN BUSINESS JOURNAL
KERN BUSINESS JOURNAL
Kern Business Journal February 2013