Stewart & Jasper Orchards: Jim and Jason Jasper

 


 


Overview of Farm Business

Year Started: 1948
Location: Newman, California. Southwest of Modesto in Stanislaus County.
Size: 2,500 acres
Crops: Almonds, peaches, nectarines, pluots, and walnuts
Employees: 100 year-round, plus another 80 in the peak season
Primary Sales Outlets: • Export sales to Taiwan, Japan, and Europe
• Major supermarkets like Safeway
• Specialty food stores in France, Germany, and Britain
• Their own retail store and website
Contact Information: Jim and Jason Jasper
Stewart & Jasper Orchards
3500 Shiells Road
Newman, California 95360
Phone: 209-862-9600
Email: jason@stewartandjasper.com
Website: http://www.stewartandjasper.com

 



Introduction

Stewart & Jasper has been growing peaches, nectarines, pluots, almonds, and walnuts in Newman, California for over 50 years. As they continue to diversify their marketing strategy with a line of value-added products and an on-farm retail shop, this family farm is poised for another generation of success.

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In 1948, Romain Stewart and Lee Jasper founded Stewart & Jasper Orchards in Newman, California, a small agricultural town on the west side of Stanislaus County. At the outset, Stewart & Jasper grew beans, alfalfa, tomatoes, and other row crops. Since then the farm has transitioned into a wide variety of crops—including peaches, nectarines, pluots, almonds, and walnuts—and expanded to 2,500 acres. They are slowly moving into organic production as well, with 35 acres currently in organically-grown almonds. Lee’s son Jim joined the farm in 1967 and his grandson Jason joined the business in 1998.

Stewart & Jasper started hulling their own almonds and walnuts in the mid-1970’s and have since vertically-integrated their production. They grow, hull, package, and then sell their own almonds, in addition to processing both walnuts and almonds for nearby farms on a custom basis. This year, Stewart & Jasper will pack out about 23 million pounds of almonds from their orchards, of which approximately 100,000 pounds will be processed into their own line of value-added products.

In addition to natural almonds and walnuts, Stewart & Jasper sell a wide variety of specialty food products, including glazed nuts in flavors like cinnamon, raspberry cheesecake, and key lime. Their roasted almonds are available in sundried tomato, balsamic herb, chocolate toffee, and yogurt flavors. Stewart & Jasper also sells dried apricots, dried pluots, dried white nectarines, and dried white peaches, as well as apricot, pluot, and white nectarine and raspberry preserves. They package these value-added products individually and in special gift baskets.

Marketing

Stewart & Jasper markets their produce through several avenues, both domestically and internationally. Most of their peaches are sold through a broker to retailers and wholesalers in Taiwan, while the other fruits are sold in the US through major supermarkets like Safeway. More than 75% of their almonds are exported, primarily to Japan, and sold through brokers or directly to food processors, confectioners, and bakeries. Some confectioners are so particular about the size of the almond that they use in their production process that Stewart & Jasper will fill custom orders to their specifications. A significant portion of Stewart & Jasper’s domestic sales is to Hershey’s, a high-volume purchaser with very high quality standards. They are proud to be one of only six almond processors in the US who supply Hershey’s almonds.

Though Stewart & Jasper has been very successful in selling their fruits and almonds internationally, they also recognize that these markets are changing. Given current trends, they do not expect their sales in international markets to be as strong in the future. As a result, Jim and Jason have adjusted their long-term business strategy to include the development and marketing of their own line of value-added products. The creation of this value-added product line allows them to diversify their business and enter marketing avenues—such as direct-to-consumer sales via their website and their own retail store at their farm—that are more insulated from volatile global markets. Since value-added production requires a significant investment in capital, including the machinery required to roast and flavor the almonds, this strategy will be slowly implemented over time. In addition, defining a marketing strategy is expensive and takes a great deal of planning, particularly since they want to sell their products in smaller, gourmet food stores and markets. At the moment, Stewart & Jasper is producing value-added products on a limited scale and plans to expand this aspect of their business over time.

When Jason graduated from California Polytechnic State University in San Luis Obispo in 1998, he came home to Stewart & Jasper and managed this shift toward value-added products. They had considered diversifying their production into blanched, sliced, or diced almonds before, but these products would still be sold to the same food processors along the marketing channels that they had already developed. Instead they wanted to develop something else to carry the Stewart & Jasper label and find a new market niche. With this in mind, Jason developed their line of value-added products and the website to market them (http://www.stewartandjasper.com). Soon their website will sell over 75 value-added and specialty items and offer customers the option to create their own custom gift baskets.

Stewart & Jasper also sells their products through a mail-order catalog, their store in Newman, and gourmet, specialty retail markets in France, Germany, and Britain. In addition, they are in the process of constructing a new retail facility at their almond plant in Newman. When the new on-farm retail store opens in May 2003, it will offer retail sales of Stewart & Jasper value-added products and other specialty items. In addition to the retail space, the new facility has a roaster, a custom bagging machine, a shipping area, and a commercial kitchen where they can now glaze their own almonds. The storefront in Newman will close once the new retail space opens, but reopen each year for about three months around the holidays.

Challenges

Stewart & Jasper has grown into a very successful business in the last 50 years, but it faces three main challenges.

Global Agricultural Trade. Fruits from South Africa, Turkey, Chile, and New Zealand are flooding the American market. More and more of the vegetables we eat in the US are grown in Mexico. As Jim and Jason point out, American farmers can’t compete in the global market on any crops that require a significant amount of labor. Fruits, for example, need a lot of care when harvested and packed. Almonds, in contrast, don’t demand significant amounts of labor in their production or harvest, which allows growers in Stanislaus County to compete in the global almond market. In fact, 80% of the worldwide production of almonds occurs in the San Joaquin Valley. The bottom line for Jim and Jason is that, unlike manufacturers, family farms can’t just pick up and move to another state or a different country. Each farm is rooted in its own location, but it is getting harder for everybody to stay in business.

Environmental Compliance. Currently the greatest challenge their farm faces is water. They were recently notified that the acreage on their farm that lies within the federal water district—about 75% of their total acreage—would only receive about half of its typical water allocation. They also confronted numerous county regulations during the construction of their new retail facility at the farm. County fees for schools, fire protection, and compliance exceeded $25,000.

Urbanization. Twenty years ago Newman was primarily an agricultural community. New homes sold for around $50,000 and the cost of living was quite affordable. Today, however, Newman and its cost of living are growing fast. The population has doubled in the past seven years and the average home price tops $175,000. Due to the increase in the cost of living, farmworkers can’t afford to live in Newman anymore. American growers already have a hard time competing in the global market due to their higher labor costs. Now, to make it worse, even what many farms do pay people isn’t enough to match the rising cost of living in these small, agricultural towns. In addition, newcomers from the Bay Area have no connection to agriculture and don’t like the dust, or the noise, or even the bees that farmers depend on to pollinate. Farms close to urban areas are particularly at risk.

Three Top Tips for Other Growers

Based on their experience, Jim and Jason offered three recommendations to other growers and food processors.

1. Surround yourself with good people who are experienced, dedicated, and have good common sense.

2. Don’t be undercapitalized. Make sure you have adequate assets.

3. Develop good strong relationships with the people you do business with.

Links Referenced in the Case Study

Stewart and Jasper
http://www.stewartandjasper.com