Just Tomatoes, Etc.: Karen and Bill Cox
- Supportive Organizations
- Three Top Tips for Other Food Growers and Processors
- Links Referenced in the Case Study
|Overview of Farm Business|
|Location:|| Westley, California. Southwest of Modesto in Stanislaus
|Products:||Dried fruits and vegetables|
|Employees:||65 at peak season, plus the owners|
|Primary Sales Outlets:||• Retail grocery stores, natural food stores, and food
• Their website
• Mail-order catalog
|Contact Information:|| Karen and Bill Cox
Just Tomatoes, Etc!
PO Box 807
Westley, California 95387
Before they launched their successful dried fruits and vegetables business, Karen and Bill had been growing row crops in Westley, in western Stanislaus County. Karen and her husband, a fourth-generation farmer, grew tomatoes, lima beans, basil, dill, wheat, and alfalfa on their 2,000-acre farm for 15 years. Like most agricultural businesses, their income varied from season to season. One year would be great and then the next one would be terrible. This continuing cycle led Karen to look for ways to smooth out their farm income.
At the time, in the early 1980’s, sundried tomatoes were the hot new food item. They were added to spreads, dips, and pizzas, but Karen had never been too impressed with them. She didn’t think that the store-bought dried tomatoes had the true flavor of tomatoes, so she made some of her own from their farm’s tomatoes. Soon after, she took some of her homemade tomato chips and dip to a party. People just went crazy for the taste and kept asking, “What are these? What are these?” She replied that they’re “just tomatoes, just tomatoes.” A friend turned to her and said, “Well, then that’s the name of your business: ‘Just Tomatoes’!”
And so the business started. Karen bought two home dehydrators and started drying tomato chips. She used her experience as an illustrator and artist to design the “Just Tomatoes” labels and do all the marketing. When friends recommended that she market her dried tomatoes to upscale grocery stores, she took some samples to a gourmet specialty foods store in the Bay Area. At first they were uninterested, since they already had some from Italy, but then they tasted her samples. They were hooked and promised to buy all the dried tomatoes she could bring them.
That winter, she and Bill bought 100 home dehydrators and a few industrial-use tomato slicers. They filled up their garage in anticipation of the next season’s harvest. Orders kept coming in and Just Tomatoes kept growing. Their system of home dehydrators worked for a while, but finally the business outgrew it. To further expand Just Tomatoes, Bill designed and built an industrial-scale dehydrator with the help of an air conditioning company in Modesto. Now they have eight of Bill’s massive dehydrators on their production floor.
Bill and Karen produced dried tomatoes for the first few years and then diversified into apples, persimmons, bell peppers, and a veggie mix for soups and sauces. In the early 1990’s, the New York Times did an article about their dried veggie mix and the phone rang off the hook for six days straight. A few months later, Nutrition Action Health Letter, a newsletter for nutritionists with a circulation of over 800,000, did a story on the health benefits of their dried veggie mix. The phone rang for six weeks. In fact, the response was so overwhelming that they had to install a new phone system. Their business tripled in one year and Just Tomatoes was on its way.
Now Just Tomatoes sells 39 different dried vegetables and fruits, including carrots, corn, peas, mushrooms, strawberries, pineapple, peaches, blueberries and mango. They are also a certified organic handler and have 11 organic products, including a veggie mix, soy nuts, peas, tofu, raspberries, and strawberries. They also package gift baskets and sell cookbooks of recipe ideas using Just Tomatoes dried products.
After the veggie products became a hit, employment at Just Tomatoes expanded to 25 year-round workers, plus 25 more during the drying season, and 15 full-time sales people. Their yearly payroll now tops $700,000. In addition to what their payroll adds to the local economy, Just Tomatoes also buys their fruits and vegetables from area farmers whenever possible. The apples come from a neighbor, the persimmons are grown in Fresno, and the bell peppers come from farmers in Westley. Their own farm grows all the tomatoes in Just Tomatoes products. These tomatoes are grown on the outside row of the fields of processing tomatoes and hand-picked at their peak.
At first Bill wasn’t convinced that selling dried vegetables was a good idea. He didn’t understand why stores would pay $18 per pound for dried tomatoes when the canneries only paid 3 cents per pound for the fresh ones. Then the orders started coming in.
Gourmet grocery stores in California were the first to buy their products. A few months later they got a call from a deli in Virginia Beach, Virginia.
The caller said that a friend had been to California and brought back some of their dried tomatoes. He wanted to sell them in his deli, so Karen and Bill started an account. Then a couple weeks later they got a similar call from someone in Ohio. The calls kept coming in and soon they were selling their products nationwide.
Karen and Bill tried to work with distributors and brokers but found that they only added layers of logistics, bureaucracy, and cost to their operation. Instead, they now have 15 “account managers” around the country who work from home and do their sales calls. Currently Just Tomatoes sells to the central warehouses for large stores like Albertsons, through their website (http://justtomatoes.com), via a mail order catalog, and directly to retail stores, coffeeshops, and delis. The largest segment of their market is natural food stores like Whole Foods and Wild Oats. On-line sales recently expanded to 7% and mail order stands at 1-2% of total sales.
Karen is a supportive member of California Women for Agriculture and Bill is very active in the Stanislaus County Farm Bureau. They have used Cooperative Extension and agricultural advisors quite a bit in the past 20 years. They found their assistance with product development to be particularly helpful. Karen and Bill are also part of the National Association for the Specialty Food Trade and keep in touch with other specialty food producers in the state.
Since Karen and Bill started Just Tomatoes 18 years ago, it has grown into a successful, nationally-known business. Nevertheless, it still faces challenges.
Environmental Restrictions. Karen and Bill find that farmers are more and more limited by dust restrictions, drainage limitations, and water availability. Farmers seem to get cut first when natural resources are allocated between urban and rural uses. They also say that the level of reporting and record keeping that is necessary to stay in compliance with these regulations gets more difficult and time-consuming every year.
Urbanization and the Loss of Farmland. More and more prime agricultural ground is disappearing under pavement, particularly on the west side of Stanislaus County. Newcomers often settle in towns close to the interstate and commute up to three hours each way to their jobs in the Bay Area. There is a county Right-to-Farm ordinance, but Karen and Bill find that these new neighbors aren’t accustomed to living in an agricultural area and often complain. They would like to trust that agriculture will always be a part of the Central Valley, but they also remember that that’s what farmers near Los Angeles used to say.
Global Agricultural Markets. Karen and Bill find that international markets have a larger and larger influence on American farmers. Apricot growers in California can’t compete with the price of apricots from Turkey. These imports are on sale at the market for less than what growers in the US get paid for the unprocessed fruit. Plus, Karen points out that the imports are often lower-quality fruits and that consumers have no information about how they were produced. In their opinion, the US should be self-reliant for its food. They feel that the US shouldn’t rely on other countries to provide our food as we rely on some to provide our oil. They both believe that we should protect our farmland by supporting American farmers.
Based on their experience with Just Tomatoes, Karen and Bill have three recommendations for other growers and food processors.
1. Check out the competition. See what products are already out there and what you will be competing against. Salsa, for example, is a tough market. There is already a glut of salsa on store shelves so it would be very difficult to introduce yet one more brand to the marketplace.
2. Build the cost of distribution into your price. In case you ever have to go that route, include the cost of distribution in your price from the beginning. It’s nearly impossible to add this cost to your price once your product is established. A rough estimate is that the cost of distribution will add 25% to 35% to the price of your product.
3. Slow and steady. Build your business gradually as you can afford to do so. Don’t go out on a limb or take great risks.
California Women for Agriculture
National Association for the Specialty Food Trade
Stanislaus County Farm Bureau
University of California Cooperative Extension, Stanislaus County