Why Not In Texas? The following discussion of fresh-cut onions for food service is adapted from an article by the same title appearing in "Onion World," September/October 1999. The article describes a successful attempt by a conventional onion farm to expand into the fresh-cut business . . .
By Frank J. Dainello
After launching Gill's Onions in 1983 to supply food manufacturers with peeled onions, Steve and David Gill are expanding both their plant and their product line to take advantage of a 'big opportunity' in food service. The brothers didn't have processing in mind in 1979 when they and their father, Allen, established a farming operation on the banks of the Salinas River near San Lucas [California]. Around that time, national food manufacturers like La Victoria Foods were just beginning to seek out fresh ingredients as a way to improve the quality and texture of their products. La Victoria wanted to buy fresh, peeled onions for their salsas and sauces, and Steve and David recognized an opportunity, and said, "We can do that."
They opened Gill's Onions in Oxnard [California], centrally located among various growing regions, where Steve was overseeing one of the growing operations. The processing plant grew about 30 percent per year into the 1990s, and still hasn't shown signs of slackening its pace, according to Steve.
He indicates a 'huge' potential for peeled and fresh-cut onions in the food-service arena. "We offer a variety of cuts to meet customer demand," say Susan Schmidt, sales manager for Gill's. "If we get a request for a custom cut, we will work with the customer to meet that need. We're also open to the idea of co-packing for people under their labels. The new products are being offered in cases of either two or four 5-pound bags, determined to be the most popular pack sizes requested by food-service operators we surveyed. Over the years, we've had inquiries about diced and sliced onions for food service."
"We're solely focused on processing onions," Gill explains. "That's all we do. Other processors are producing up to 60 produce items or more. They can't focus on one. We're vertically integrated, and control our product from field to table. We feel with that kind of focus, we have better products."
Susan Schmidt agrees. "It's a matter of people picking their supplier. Our strength is quality, control of supplies, traceability, and consistency, backed with an excellent food-safety program. Our new products are opening a whole new market for us. The potential is there for fresh-cut onions, and there's still a lot of room to grow. There are many people peeling their own onions, and we have a better way."
. . . . . . The above success story is a good example of how integration has enabled a basic farming operation to become more competitive and profitable in the environment that is molding today's produce industry. With the trend toward more convenience-oriented food items and the consolidation of retail food outlets, vertical integration of specialty products as well as unique packaging and distribution techniques into conventional farming operations may offer a means of survival for many Texas vegetable producers in the decade ahead.
It is without question that Texas has an abundance of excellent vegetable growers. However, it is becoming painfully clear that just being a good grower is insufficient to insure success in the changing produce climate of the twenty-first century. The same way of producing and marketing vegetables utilized in past decades just won't cut it in the future. Only visionary growers who are able to interpret emerging trends and adapt their operations to accommodate consumer preferences, such as the Gill brothers of California, will survive in the initial decades of the new millennium.
As pointed out by the Gills, the food-service industry offers a tremendous potential to market produce and specialty items. Producers, both large and small, need to take every opportunity to develop this industry as a primary market for their products. The success of the Gills with peeled and diced onions makes one wonder why some of our onion producers haven't taken advantage of this opportunity, considering the fact that we produce perhaps the highest quality onion in the U. S. There are many other different ways of processing, packaging, and marketing Texas vegetables that have not been explored. Some marketing strategies I believe are worth considering are: pre-cut of full-ship or fully mature honeydew melons for distribution in Texas; snack-pak baby cantaloupes; small seedless watermelons packed in individual totes for easier handling; and packaged mixed green salads, to mention a few.
Unfortunately, the Texas produce industry can be characterized as a catch-up industry rather than an industry leader. Why is that? Perhaps our unstable climate or the size of our individual farming operations, or the type of financing available to our producers are the real causes for our catch-up characteristic. Whatever the cause, over the last ten years, it has resulted in our industry falling from the third leading state to barely hold onto fifth place. If we continue to play catch-up, we will ultimately lose as a major player in the nation's produce game.