beyond organic
ENTREPRENEURIAL FAMILY BUILDS ON ITS PAST
Producing a line of frozen vegetables, the Gengler family and Sno Pac have roots firmly established in the $6.6 billion organic food industry.
Jo Anne Killeen

PETE GENGLER is happy that his family and its company, Sno Pac Foods, Inc., got into the organic food business early. Touting itself as the world’s first grower/processor of frozen organic vegetables, Sno Pac, located in Caledonia, Minnesota, is in its third generation of ownership. Pete Gengler’s mother, Darlene, is the last of the second generation, working in the office on accounts payable. The third generation is made up of Pete, the general manager; Nick, who heads up production; and Joan (Denstad), their sister, who lives on the farm and works in the office. Family involvement has been a cornerstone of day-to-day operations since the company was founded in 1943.

The nature of Sno Pac’s business allows the Genglers not to worry much about crop prices. “We can stay in business because we create our own market by growing, processing and packaging our products and being able to store them,” says Pete Gengler. Sno Pac’s biggest competitor is Cascadian Farms in Washington State. General Mills recently bought Small Planet Foods, which owned Cascadian and the Muir Glen line.

Gengler says the most exciting part of what he does is “seeing it all come together. You start your crop planning and obtaining contracts during the winter. Then come the plantings and if we’re really lucky, the weather cooperates to yield enough crops to cover contracts and more. It’s seeing all those details come together that gives me satisfaction.” He also feels gratified knowing that he’s contributing to the supply of healthy foods for American tables. “We’re committed to organic foods. I can’t think of not being in the business.”

The Organic Trade Association (OTA) estimates that frozen organic food constitutes 10.5 percent of the $6.6 billion organic industry (estimated to grow to $7.7 billion by the end of 2000). Gengler says that Sno Pac has about 15 percent of the frozen organic food market. According to the OTA, the growth rate of the frozen food category is projected at 40 percent between 1997-2002.

FIRM FOUNDATION

Everything the Genglers do today connects with something the family did long ago. Gengler Lumber Company, founded in the 1900s by Pete Gengler’s great-grandfather, John Peter Gengler, has evolved into what is now a world-class processor of organic fruit and vegetable products. In the 1920s, John built a pond at the lumber mill site, and a sideline of cutting ice blocks and packing them in sawdust from the mill was formed.

Leonard Nicholas, Pete’s entrepreneurial grandfather, started Caledonia Cold Storage as a result of the family’s slaughter and butcher operation on its farm. In the 1930s, the family also began storing fruits and vegetables in the lockers. During World War II, Nicholas started packaging the frozen food under the Sno Pac label, and a niche market of frozen organic products was created.

Nicholas, who also was on the board of directors of Land O’Lakes, built a creamery in Caledonia for Land O’Lakes and delivered butter to the surrounding area along with the packaged frozen fruits and vegetables. Nicholas was secretary of the creamery for 30 years and instrumental in organizing the milk-drying plant for Land O’Lakes in 1959.

Sno Pac fruits and vegetables have always been organically grown. The Gengler family practiced soil conservation, farmed in contour strips, and used lime from its rock quarry, another business in which the family prospered. When chemicals were introduced to the farming community, the Genglers were contacted from people around the country who wanted their organic products. Pete’s father, Ramon (who died last year), commercialized the frozen fruits and vegetables business and began shipping Sno Pac products around the country via rail.

PRODUCT LINE

With 1,500 acres available for organic produce and another 2,000 acres planted with nonorganic soybeans to be packaged for SunRich, the Sno Pac product line includes blueberries, chopped spinach, mixed vegetables, golden corn, green peas, cranberries, cut green beans and sweet beans. The majority of organic acreage is devoted to the soybean crop.

Gengler also grows wheat and alfalfa for crop rotation. Crop plow downs of residues fertilize all of the organic fields. “Organic farming by far is more difficult than conventional farming for us,” he says. “We don’t have too much of an insect issue with organic. The big issue is the weed pressure.”

Gengler has carried on the tradition of entrepreneurial creativity with the introduction of organic edamame to the U.S. market. These are soybeans picked before they reach maturity, resulting in a sweeter flavor. Previously, they were imported from Japan or Taiwan and were available only through Asian grocers. Edamame (meaning “beans on branches”) are commonly found in Japanese restaurants as appetizers and served in the pod. Edamame served out of the pod can be eaten alone or in stir-fry, a casserole dish or bean dip.

“For ten years or more, Sno Pac and SunRich have been trying to develop the best variety and processing procedures for edamame,” says Gengler. “Sno Pac is the most successful in the U.S. at producing them. And while they’ve been a snack food in Japan for centuries, edamame are really catching on here in the U.S.”

Consumers will soon find Sno Pac products in freezer bags instead of the traditional ten-ounce cartons. “We’re trying to stay competitive,” Gengler says. “The market is now demanding frozen produce in bags, and we’ll be producing the bags soon.” The bags will be printed in California and shipped to Caledonia for packaging. Gengler has invested in new equipment to replace the 40-year-old machinery at the 7,500-square-foot packaging facility. “We hope to obtain more freezer shelf space in health food stores as well as mainstream grocery stores. Not only will we be using the bags for our own product, but we hope to package for other labels, too,” adds Gengler.

PROCESSING SYSTEM

The Sno Pac products are truly “fresh frozen.” Once produce is harvested and brought from the field to the processing plant, it takes seven to ten minutes for it to be placed in a freezer. From the truck, smaller items like peas are put through a shaker, and a machine called a pod and stick remover shakes off waste such as sticks and leaves. A conveyor belt transfers the produce to a bin for washing. Larger products such as green beans are moved through a shaker and then a cutter that snips off stems and vines before they go to the washing bins.

The washed produce is moved to a blanching machine, where it is boiled at 205° for two minutes to stop the deterioration process. A 100 horsepower boiler keeps water temperature stable. After blanching, the product moves through a cold water wash pool into a separator that removes smaller waste such as thistles and unusable crop, which are spotted by a computer calibrated to pick out certain sizes, shapes and colors automatically. A monitor also allows the produce to be viewed manually to refine the sifting process. As the materials pass through, a screen is opened and air pressure blows the identified waste away. Depending on quality and volume, three to five employees will manually sift through the produce before it is transferred to the freezer.

A 600 horsepower ammonia compressor generates the freezer power. The produce is transferred into the freezer tunnel for three minutes and then poured into a tote that holds 1,400 lbs. The full tote is sealed and immediately transported to the freezer storage area, which is approximately 50 feet away. The freezer storage area holds enough totes to fill about three semitrailers. The produce eventually is transported to market via truck. Items to be exported overseas are sent to shipping terminals on the West Coast.

MARKETING

A good deal of Sno Pac’s advertising takes place at trade shows. The Natural Foods Expos in Anaheim and Baltimore have been particularly valuable promotional venues. Other advertising is done in magazines, mostly in distributor catalogs.

Sno Pac is enjoying a 20 percent annual increase in growth, which follows national market trends cited by OTA. The products are distributed nationally to colleges and cafeterias, health food stores, buying clubs and retail stores. The retail market contributes the most to Sno Pac’s profit margins. (Nationally, 54 percent of organic manufacturers’ frozen product sales are through health and natural food stores and 38 percent through mass-market grocery chains.) Sno Pac conducts no direct selling and is represented by brokers at the retail level. The company sells to about 25 distributors for mass-market grocery outlets.

Sno Pac also sells to food manufacturers that combine its produce in recipes for other products. Its vegetables are used in the Amy’s Kitchen brand, ShariAnn’s soups, and Gerber’s baby foods (under the Tender Harvest label). Five to ten percent of Sno Pac products are exported in bulk to Japan in 20-lb boxes for restaurants and in bulk and retail packages to Canada.

“Every day is a challenge for us,” says Gengler. “We have to deal with the weather (which dumped a lot of rain on the upper Midwest in June), equipment breakdowns, personnel issues and more competition now in the organic food industry. I’m just glad we were in the industry earlier and now our name is established. I wouldn’t want to be just starting out in this business with the competition there is now. ”

Jo Anne Killeen is owner of Write For You, a freelance writing service, and serves as editor of Enterpriser, a monthly business journal in La Crosse, Wisconsin. She can be reached at (608) 785-1138 or jakilleen@aol.com.