Friday, December 31, 2021
CapitalPress.com
21
George Packing Co. and Northwest Hazelnut Co.: Changing an industry
By BRENNA WIEGAND
For the Capital Press
In 1986 Larry George, with the
encouragement of his Newberg
High School ag instructors, started
an FFA project that not only helped
put him through Oregon State Uni-
versity, it also spawned the busi-
ness that has changed the face of
the hazelnut industry.
“I would take hazelnuts from my
parents’ farm in Newberg, dry them
and have them shelled by the Her-
ring family nearby,” George said.
“Then I’d have them roasted and
either chocolate-coated or salted
and put them in small retail pack-
ages that I sold during college.”
By the time he graduated,
George realized that, because
hazelnuts were much more expen-
sive than competing products such
as almonds, the margins on those
small retail packages were not scal-
able for industry and insuffi cient to
support much more than one or two
families.
At that point, George turned to
SEE YOU AT THE
SHOW
George Packing Co. and North-
west Hazelnut Co. are Major
Sponsors of the 2022 Northwest
Ag Show. Find them at Booth
1715.
George Packing Co.
Larry and Shaun George at the
George Family Orchard in New-
berg. The siblings own George
Packing Co. and Northwest Ha-
zelnut Co., processing half the
U.S. hazelnut supply.
buying nuts from local farmers and
selling them wholesale.
He incorporated George Pack-
ing Co. in 1994, bringing in brother
Shaun George, 10 years his junior,
once he turned 18.
They leased space from their
parents on the family farm and
constructed a processing plant for
in-shell and kernel products to
go along with the existing drying
facility.
“At the time there were 18-20
hazelnut processors in the indus-
try,” George said. “There weren’t
enough hazelnuts for so many pro-
cessors and as a result the proces-
sors worked off a high-margin
model to support their operations.”
The processor margin left little
return for the family farms grow-
ing hazelnuts at the time. As farm
kids, the George brothers wanted
to fi nd a way to fi x that and secure
a greater fi nancial return for farm
families like theirs.
“In the 1990s you had the emer-
gence of companies like Walmart
that work off a narrow, fi xed mar-
gin and focus on moving volume,”
George said. “We decided to work
closely with our growers and set
up a fi xed margin with them every
year, so they knew what we made
per pound.
“Every year we ended up sell-
ing the hazelnuts for more than
our target price and growers
started receiving secondary bonus
checks,” George said. “It com-
pletely changed the way the hazel-
nut industry worked.
“Previously, the processor and
the grower were always fi ghting
with each other over who would get
what margin, and we turned around
and said, ‘You know our mar-
gins; farmers get everything to the
upside; we just need the volume,
and we can focus on effi ciencies
and developing unique niche mar-
kets for Oregon hazelnuts.’”
By 2002 the Georges had qua-
drupled in size. Then, in 2013, they
purchased Northwest Hazelnut
Co. from Jeff Kenagy and the Gin-
gerich family. Northwest Hazelnut
Co. had already built strong, high-
end niche domestic kernel markets
that complemented the large North
American industrial customers and
specialty export markets that were
the backbone of George Packing.
Today, George Packing Co. and
Northwest Hazelnut Co. process a
little over half the U.S. hazelnuts,
a crop almost entirely produced in
the Willamette Valley.
“Growers love our model,”
George said. “We have aligned our
interests with our growers’ inter-
ests, and they know they’re going
to get all this upside as long as the
market stays strong. Our job is to
maximize effi ciency and to be con-
stantly developing new specialized
niche markets that bring Oregon
farmers the highest returns.”
The George brothers worked
closely with the Hazelnut Growers
Bargaining Association as the rest
of the industry migrated to this new
business model.
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