A3
THE ASTORIAN • THURSDAY, JULY 22, 2021
SUPPLY CHAIN
A cucumber’s journey to market
By SIERRA DAWN
McCLAIN
Capital Press
PORTLAND — Betsy
Walton had an idea.
It was 2008, and Wal-
ton, then 57, decided to leave
her decadeslong career in
the apparel industry to create
her own Oregon-based food
company.
It all started with pickles.
Every Labor Day weekend,
Walton canned a batch of pick-
les using her grandma’s rec-
ipe. Friends told her she should
take the recipe to market —
and fi nally, she decided to try.
She signed up for a local
class called “Getting Your
Recipe to Market,” created a
company called Our Favor-
ite Foods LLC and named her
pickle line Duker’s Dills.
Walton quickly learned the
grocery supply chain is a com-
plex clockwork. The sheer size
of the 2021 U.S. supermar-
ket and grocery industry, mea-
sured by revenue, is $658.1
billion, according to mar-
ket research fi rm IBISWorld.
That’s about $1.3 million gen-
erated per minute.
It’s easy, Walton learned,
for farmers and new food com-
panies to make mistakes and
get hurt. But getting a prod-
uct to market, if done right, can
also be exciting.
Getting started
When Walton started, she
had no experience in commer-
cial foods.
“It was a riot,” Walton said.
“I really didn’t know what I
was getting myself into.”
To begin, she would need
ingredients, processors, dis-
tributors and retail buyers.
Game on.
In the “Getting Your Rec-
ipe to Market” class, co-run
by Portland Community Col-
lege’s Small Business Devel-
opment Center and Oregon
State University’s Food Inno-
vation Center, Walton learned
about product development,
food science, packaging, dis-
tribution and marketing.
“It was all new to me,” said
Walton.
Sometimes, a new product
begins with a startup. Other
times, a food company sim-
ply adds a new product to its
lineup. Occasionally, farm-
ers take a product to market
themselves.
The best way to get started,
according to experts, is to “test
the waters.”
“I think a great place to start
out and learn is through farm-
ers markets,” said Mike Seely,
a Willamette Valley mint
grower who sells value-added
products such as mint patties
and teas through thousands of
national retail stores. “That’s
where we got started. You
learn what works and what
doesn’t, what people like and
don’t.”
Erick Garman, trade devel-
opment manager at the Oregon
Department of Agriculture,
said as farmers and food com-
panies scale up, it’s important
to avoid common pitfalls.
Garman and his colleague,
Lauren Gwin, associate direc-
tor of Oregon State’s Center
for Small Farms and Commu-
nity Food Systems, advise pro-
ducers to:
• Do market research.
• Know each retailer’s mission.
• Get to the decision-maker
as soon as possible.
• Be able to explain their
product in detail.
• Understand their category
and competition.
• Make sure they’re in com-
pliance with food safety and
labeling requirements.
• Have a clear sense of pro-
duction costs and markups.
• Have a well-organized
invoicing system.
• Be prepared to invest in new
equipment and infrastructure.
Gwin advises producers
to keep some of their busi-
ness in direct-to-consumer and
foodservice.
“It diversifi es your risk,”
she said.
Grocery distribution chain
company
invents product
1 Food
2 Farm
3 Harvest
5
4 Processor
Manufacturer
or co-packer
& packaging
6 Forwarding
warehouse 7 Broker
8 Distributor
9 Retailer
Getty Images/Capital Press graphic
Lynne Barra, owner of
Paradigm Foodworks Inc., a
food manufacturer, said she’s
seen many farms and food
businesses fail because they
weren’t prepared.
“If you go from the kiddie
pool into the deep water, you
gotta have deep pockets,” she
said.
In search of
the perfect cucumber
With the new business
started, it was pickle time.
First, Walton would need
cucumbers — and a lot of
them. But where to fi nd them?
In her class, Walton asked
Sarah Masoni, a leader in
Oregon States’s Food Inno-
vation Center, if she knew
any growers. Masoni sug-
gested Bob Egger, co-owner
of Delta Farms, a division of
Sauvie Island’s famous Pump-
kin Patch, and Anthony Fazio,
owner of Fazio Farms in
Portland.
Walton met the farmers
and decided to buy cucumbers
from both, along with dill and
other produce for pickling such
as green beans.
“Word-of-mouth” recom-
mendations are key, so indus-
try experts recommend farm-
ers introduce themselves to
many processors, manufactur-
ers, distributors and retailers.
Working with farms proved
to be a steep learning curve for
Walton.
“I learned to expect the
unexpected,” she said.
Her fi rst year, Walton
ordered thousands of pounds
of green beans. She was sur-
prised to fi nd some were
wonky shapes that couldn’t fi t
inside pickling jars.
“I didn’t even think about
green beans not being straight,”
she said.
She learned in the future to
order 10% extra.
Working with the farms,
Walton said, was also a joy.
“The farmers have abso-
lutely amazed me,” she said.
“They work their buns off .”
Egger said he sells about
half his produce in the farm’s
own market and half whole-
sale. His No. 1 customer is
Albertsons grocery stores.
Egger said when Walton
approached him looking for a
supplier, he was grateful for the
opportunity. But pickle pro-
duction, he said, is challenging.
A cucumber destined for
the pickle market must be
hand-picked at precisely the
right size.
Hand picking is hard labor,
said Egger. He said he pays
his employees $16 per hour
“to hand harvest tiny little
pickles.”
“How long can hand har-
vesting pickles go on?” said
Egger. “People don’t realize
how expensive and labor-in-
tensive this crop is. Pickles are
about the hardest thing to do
wholesale.”
kitchen couldn’t process thou-
sands of pounds of cucumbers,
nor was it licensed. She needed
to fi nd a contract packer, also
known as a co-packer — a
food manufacturing company.
Food startups and farmers
often begin by working with
co-packers, and if the startup
grows into a major food brand,
its owners may invest in build-
ing processing and manufac-
turing plants.
Typically, one more step
comes before the co-packer:
the processor. A processor
prepares raw ingredients for
manufacturing by blending,
grinding, freezing, roasting,
pureeing or peeling.
A co-packer then takes
the processed ingredients and
uses them in recipes to make
products.
Between each facility, a
sequence occurs: load, ship,
receive. This may happen
under the umbrella of one
company, or each hauler and
contractor may be separate.
Walton’s fi rst co-packer was
Dundee Fruit Co. in McMinn-
ville. After harvest, about 25
Dundee Fruit Co. employees
would pack Walton’s pickles
— up to 3,000 jars per day.
“It was really cool,” said
Walton.
When ownership changed,
Walton shifted to a smaller
Portland co-packer called
Three Little Figs.
The company produces
artisan jams, many using a fi g
base, under its Three Little Figs
brand name, and does co-pack-
ing for other companies on
the side, a common setup. Liz
Cowan, the owner, worked as
a fashion stylist for 15 years
before opening the company
to pursue her fi rst love — food.
Oregon and Washington
combined have more than 100
co-packing operations, accord-
ing to the Oregon Department
of Agriculture.
“It’s a fascinating line of
work,” said Lynne Barra,
owner of Paradigm Foodworks
Inc., a co-packer and manufac-
turer in Lake Oswego.
Barra, formerly a math
teacher, got into the food world
when dabbling with choco-
late-making. She has this sign
hanging in her offi ce: “For-
get love! I’d rather fall in
chocolate.”
Today, about 25% of her
production is proprietary and
75% is co-packing. She works
directly with some farmers,
but mostly buys ingredients
through processing plants.
According to Jill Bea-
man, a Portland-based busi-
ness adviser to food entre-
preneurs, some co-packers
source ingredients for a food
company, while others expect
the company to fi nd its own
ingredients.
How a co-packer gets paid
also varies. Some co-packers
buy a recipe or inventory out-
right, while others charge for
services.
Stored away
Most co-packers don’t have
suffi cient warehouses or cool-
ers. That means once a product
is made, it’s out the door and
on to a forwarding warehouse.
“Farmers and food compa-
nies need to have a forward-
ing warehouse strategy set
up,” said John Henry Wells,
founding director of Oregon
State’s Food Innovation Cen-
ter. “When the co-packer calls
and says your product is done,
that’s it. When it’s ready, it’s
ready.”
The forwarding warehouse
may be a third party or within a
distribution center.
This is where a broker, an
optional role, is introduced.
“The broker is the agent,”
said Wells of the Food Inno-
vation Center. “It’s a little like
Hollywood, the concept of a
movie agent getting gigs for an
actor.”
The broker’s role is to, as
the name implies, broker a deal
between the food company and
retailer. On average, brokers
take a 5% to 7% commission.
“If you’re not great at sell-
ing, you need somebody to
pitch you,” said Seely, the mint
grower.
Beaman, the adviser,
encourages startups and farm-
ers early on to be their own bro-
kers. It becomes worthwhile to
secure a broker when expand-
ing into broader markets.
Seely said he thinks it’s
wise to have product in at least
100 stores before securing a
broker because brokers aren’t
cheap. One, he said, asked him
for a $4,000-per-month mini-
mum fee.
“I politely declined,” he
said.
Walton’s pickles were now
ready for distribution. Wal-
ton had set up a relationship in
advance with KeHE, a whole-
sale food distributor.
Some major retailers run
their own distribution centers,
while others contract with a
third party. According to Gar-
man, of the state Department
of Agriculture, small and inde-
pendent retailers occasion-
ally accept delivery directly
from a producer.
Across
the
industry,
there isn’t agreement about
whether a producer should
fi rst approach a distributor or
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This spring, Walton got
the call from a New Seasons
buyer asking for pickles again.
It was an easy yes. But
when Walton fi rst started in
retail, she had many factors to
consider. What was the com-
petition like? Who was the
target consumer? What prod-
uct categories were oversatu-
rated? What was the ideal jar
size?
According to Beaman, one
of the most common mistakes
producers make is choosing
the wrong container. If the jar
is too tall for the main shelf, it
will go on the top rack, where
shoppers won’t see it.
Traditionally, many chain
stores have also charged “slot-
ting fees” — a base fee a food
company must pay for just the
shelf space a product sits on.
One farmer who did not
wish to be identifi ed said a
small chain store once asked
him for $10,000 in slotting
fees.
But slotting fees are disap-
pearing in many markets.
“Slotting fees are a little bit
out of vogue right now,” said
Wells.
After the pickles’ long
journey to market, Walton
had to face the fi nal, and most
important, test. Would anyone
buy her pickles?
Walton ran in-store demos,
retailers shared market-
ing responsibilities — and
the product line was a hit. A
decade later, Walton’s pickles
have been featured in publica-
tions and reviews statewide.
“Who knew?” said Wal-
ton. “It’s been quite an
experience.”
LEO FINZI
Lisa
Cadonau
July 5 th - 25 th
Duker’s Dills
go to market
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Now that Walton had the
ingredients, it was time to make
pickles. The problem: Her
she has moved toward retire-
ment — Walton is now 70 —
she has scaled back and now
only supplies one chain, New
Seasons Markets in Portland.
Consult a
Inside the warehouse
Where the
ingredients go
WANTED
retailer to pitch a product.
“It’s a chicken and the egg
thing,” said Seely. “Stores
don’t want you unless you have
a distributor, and a distributor
doesn’t want you unless you
have stores. It’s tough to get
started. But once you do, the
ball really gets rolling.”
Beaman said she thinks the
retailer is usually the best fi rst
point of contact.
“I think it helps if you have
a retailer asking for you,” she
said.
However, Beaman said,
producers often jump into
major distribution chains
before they’re ready.
“You get fl attered by a dis-
tributor or grocery store woo-
ing you,” she said.
Gwin, of the Center for
Small Farms and Community
Food Systems, encourages
growers to focus on regional,
independent grocery stores.
Experts say some national
distributors are notorious for
hidden fees and confounding
contracts.
“You’ve got really good
distributors and brokers out
there that want you to succeed.
And then you’ve got really
bad ones,” said one farmer,
who spoke on condition of
anonymity.
Supply chains are becom-
ing more consolidated. Some
growers now work through
cooperatives and food hubs.
Others have taken vari-
ous supply chain roles upon
themselves.
The Seely family, for
example, created their own
line of mint candies. They
got licensed to do process-
ing themselves, but they out-
source for photography,
graphic design and packaging.
Walton, the pickle maker,
said she avoided distribu-
tion-related headaches by
staying regional, in chains
such as Market of Choice. As
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