JULY | AUGUST 2019
WGA.COM WESTERN GROWER SHIPPER
Disruption on the Farm REIMAGINING FOOD SAFETY RISK MANAGEMENT WITH TECHNOLOGY AGTECH BALANCES TRADITION AND TECHNOLOGY
5GWILL USHER IN FINANCIAL WINNERS
WESTERN GROWER SHIPPER JULY | AUGUST 2019 WGA.COM
6 AWARD OF HONOR: TOM NASSIF A Natural Selection 12 DISRUPTION ON THE FARM AgTech Balances Tradition and Technology 18 Ganaz Connects Farmers with Farmworkers to Cultivate Employee Loyalty 20 WGCIT SPONSOR Yamaha Identifies Ag as Major Growth Market 32 Why Supply Chain Visibility Is Critically Important
WESTERN GROWER & SHIPPER Published Since 1929
Volume XC Number 4
To enhance the competitiveness and profitability of Western Growers members
Thomas A. Nassif President Western Growers tnassif@wga.com Editor Tim Linden Champ Publishing 925.258.0892 tlinden@wga.com Contributors Cory Lunde 949.885.2264 clunde@wga.com Chardae Heim 949.885.2279 cheim@wga.com Production Diane Mendez 949.885.2372 dmendez@wga.com Circulation Marketing 949.885.2248 marketing@wga.com Advertising Sales Dana Davis Champ Publishing 302.750.4662 danadavis@epix.net Stephanie Metzinger 949.885.2256 smetzinger@wga.com
DEPARTMENTS 4 President’s Notes 16 Director Profile 22 Agriculture & the Law 26 Science & Technology 28
Federal Government Affairs Arizona Government Affairs
30
34 Insurance Corner 36
Western Growers Financial Services
38 Western Growers Assurance Trust 40 Western Growers Connections 42 Contact Us
Western Grower & Shipper ISSN 0043-3799, Copyright © 2019 by the Western Grower & Shipper is published bi-monthly by Western Grower & Shipper Publishing Company, a division of Western Growers Service Corp., 15525 Sand Canyon Avenue, Irvine California 92618. Business and Editorial Offices: 15525 Sand Canyon Avenue, Irvine California 92618.Accounting and Circulation Offices:Western Grower & Shipper, 15525 Sand Canyon Avenue, Irvine California 92618. Call (949) 863-1000 to subscribe. Subscription is $18 per year. Foreign subscription is $36 per year. Single copies of recent issues, $1.50. Single copies of issues more than three months old, $2. Single copies ofYearbook issue $4. Periodicals postage is paid in Irvine, California and at additional mailing offices. POSTMASTER: Send address changes to Western Grower & Shipper , PO Box 2130, Newport Beach, California 92658.
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WESTERN GROWERS OFFICERS – 2019
RON RATTO, Chairman RYAN TALLEY, Senior Vice Chair ALBERT KECK, Vice Chair CAROL CHANDLER, Treasurer VICTOR SMITH, Executive Secretary THOMAS A. NASSIF, President DIRECTORS – 2019 GEORGE J. ADAM Innovative Produce, Santa Maria, California ALEXANDRA ALLEN Main Street Produce, Santa Maria, CA KEVIN S. ANDREW Vanguard International, Bakersfield, California ROBERT K. BARKLEY Barkley Ag Enterprises LLP,Yuma, Arizona STEPHEN J. BARNARD Mission Produce, Inc., Oxnard, California BARDIN E. BENGARD Bengard Ranch, Salinas, California GEORGE BOSKOVICH III Boskovich Farms, Oxnard, California NEILL CALLIS Turlock Fruit Company,Turlock, California DON CAMERON Terranova Ranch, Helm, California EDWIN A. CAMP D. M. Camp & Sons, Bakersfield, California CAROL CHANDLER Chandler Farms LP, Selma, California LAWRENCEW. COX Coastline Family Farms, Salinas, California STEPHEN F. DANNA Danna Farms, Inc.,Yuba City, California JOHN C. D’ARRIGO D’Arrigo Bros. Co. of California, Salinas, California THOMAS DEARDORFF II Deardorff Family Farms, Oxnard, California FRANZW. DE KLOTZ Richard Bagdasarian Inc., Mecca, California SAMUEL D. DUDA Duda Farm Fresh Foods, Inc., Salinas, California CATHERINE A. FANUCCHI Tri-Fanucchi Farms Inc., Bakersfield, California DAVID L. GILL Rio Farms, King City, California BRANDON A. GRIMM Grimmway Farms, Arvin, California JOHN JACKSON Beachside Produce, LLC, Nipomo, California A. G. KAWAMURA Orange County Produce, LLC, Irvine, California ALBERT KECK Hadley Date Gardens,Thermal, California FRED P. LOBUE, JR. LoBue Bros., Inc., Lindsay, California FRANK MACONACHY Ramsay Highlander, Inc., Gonzales, California JOHN S. MANFRE Frank Capurro and Son, Moss Landing, California STEPHEN MARTORI III Martori Farms, Scottsdale, Arizona HAROLD MCCLARTY HMC Farms, Kingsburg, California TOMMULHOLLAND Mulholland Citrus, Orange Cove, California ALEXANDERT. MULLER Pasquinelli Produce Co.,Yuma, Arizona DOMINIC J. MUZZI Muzzi Family Farms, LLC, Moss Landing, California MARK NICKERSON PrimeTime International, Coachella, California THOMAS M. NUNES The Nunes Company, Inc., Salinas, California STEPHEN F. PATRICIO Westside Produce, Firebaugh, California RON RATTO Ratto Bros. Inc., Modesto, California CRAIG A. READE Bonipak Produce, Inc., Santa Maria, California ERICT. REITER Reiter Affiliated Companies, Oxnard, CA JOSEPH A. RODRIGUEZ The Growers Company, Inc., Somerton, Arizona WILL ROUSSEAU Rousseau Farming Company,Tolleson, Arizona VICTOR SMITH JV Smith Companies,Yuma, Arizona KELLY STRICKLAND Five Crowns, Inc., Brawley, California RYANTALLEY Talley Farms, Arroyo Grande, California BRUCE C.TAYLOR Taylor Farms California, Salinas, California STUARTWOOLF Woolf Farming & Processing, Fresno, California ROBYRACEBURU Wonderful Orchards, Shafter, California
TOM NASSIF | PRESIDENT AND CEO, WESTERN GROWERS PRESIDENT’S NOTES
Musing on the U.S.-China Trade War In his Sermon on the Mount, Jesus is quoted as saying: “You have heard that it was said, ‘Eye for eye, and tooth for tooth.’ But I tell you, do not resist an evil person. If anyone slaps you on the right cheek, turn to them the other cheek also.”
As a man of faith, I try to incorporate God’s Word into every area of my life. But, imagine the absurdity if we applied this particular Christian tenet to our trade relations with China. Strike that. We have applied this exact modus operandi to our economic relationship with China for decades, and the results have been just that: ABSURD! First, a bit of history. U.S.-China relations were severed in 1949 following the establishment of communist leader Mao Zedong’s People’s Republic of China. In the early 1970s, President Richard Nixon took steps to reestablish ties between the two countries, aided by the U.S. ping pong team and his Secretary of State, Henry Kissinger. Finally, in 1979, President Jimmy Carter granted mainland China full diplomatic recognition, opening up the channels for formal political and economic activity. In the 40 years since, the U.S. has repeatedly turned the “other cheek” in its trade relations with China, with increasingly lopsided and disadvantageous results. In 1980, the first year under the new diplomatic scheme, trade between the U.S. and China totaled $5 billion. By 2000, when President Bill Clinton normalized trade relations with China, trade between the two countries had grown to more than $116 billion, with a U.S. deficit of nearly $84 billion. Fast forward to last year: total trade between the U.S. and China reached $660 billion, with a U.S. deficit of $419 billion. [Don’t forget, China also became the largest U.S. foreign creditor in 2008, and currently holds $6.2 trillion—yes, with a “t”— of U.S. debt.] Of equal concern, and potentially greater
consequence, in 2015, Beijing launched its 10-year plan to turn China into the dominant global manufacturer of high-tech goods, everything from electric cars to information technology and telecommunications to advanced robotics and artificial intelligence. This Made in China by 2025 policy has only ramped up the long-existing dubious behavior of the Chinese government—often in violation of international trade rules— including, but not limited to, intellectual property theft, discrimination against foreign investments, cyber-espionage, and forced technology transfers. In the face of such absurdity, change was required. At some point, we had to stop turning a blind eye and instead hold China accountable for its foul play. Which is exactly what President Donald Trump did in March of last year. In an act of substantial courage, President Trump announced a series of tariffs on Chinese imports worth $50 billion. As we all know, China responded by imposing retaliatory tariffs of their own, which has since escalated into an overt trade war. When China implemented its retaliatory measures last year, many of them targeting the agriculture industry, I stated in this column that I understood what President Trump was trying to accomplish—to rebalance the scales of trade between the U.S. and China—and applauded the administration for its aggressive posture, in spite of the pain being felt by farmers from across the country. I felt then, and continue to feel now, that American agriculture is a patriotic industry and would be proud to back President Trump in the defense of our nation.
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But I also warned the administration that there are limits to the burden agriculture would be willing to (or should be asked to) bear, and have since repeatedly urged President Trump to bring our trade conflicts with China to a rapid and successful conclusion. The longer this trade war drags on, the more likely our lost market access will become permanent, and no mitigation plan, however helpful, will ever be sufficient to recoup current or future losses. Our industry is now in the midst of its second major growing season under President Trump’s provocative China trade policy, and we are expectantly bracing for continued market disruptions. As the trade war intensifies—seemingly with new wrinkles added daily—and appears to have no end in sight, the initial grace period many farmers have given the administration may be reaching its statute of limitations. inequitable trade balances. Nor are we merely at odds over conflicting economic systems or political ideologies. Instead, as one high-ranking Chinese official recently put it, we are being faced with a “clash of civilizations.” But before rural America jumps off the Trump bandwagon, I offer the following analysis: We are not simply dealing with a conflict over inequitable trade balances. Nor are we merely at odds over conflicting economic systems or political ideologies. Instead, as one high-ranking Chinese official recently put it, we are being faced with a “clash of civilizations.” China has been transparent in its aspirations—to catch up with and eventually surpass the U.S., first in technological advancement, then in global superiority. As a We are not simply dealing with a conflict over
capitalist society, Americans generally welcome the competition. However, we all understand that China does not play by the rules. They are bad actors who, if left to their own devices, will seek to achieve their goals by any means necessary. We have a choice to either act now or stand idly by while China accumulates these means on the backs of American companies and consumers. Make no mistake, we are locked in a battle of cultures. One must eventually acquiesce to the other. Presume, for a minute, that the U.S. adapted its culture to match that of China. Would the Chinese government or their
companies be content to negotiate and do business with a partner like themselves? I posit the answer would be “no,” which leads to the logical conclusion that China must therefore begin behaving more like the U.S. The outcome of this clash of civilizations may very well determine American prosperity— and shape the global landscape—for decades, if not centuries, to come. We must be willing to endure, as an economy and as an industry, a bit more hardship to ensure that future generations of Americans get to compete on a level playing field. But we have our limits.
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AWARD OF HONOR: TOM NASSIF A Natural Selection
By Tim Linden W estern Growers Chairman of the Board Ron Ratto, who also headed up the selection committee for the 2019 Award of Honor recipient, said selecting G President/CEO Tom Nassif was as close to a no-brainer as there is. “How could we not acknowledge his service to Western Growers,” he said. “We know we are going to be celebrating his career at Western Growers at the Annual Meeting (which is where the Award of Honor is presented each year), it was a natural selection to name Tom.” While the award has typically been given to an industry member with a hands-on connection to production agriculture, Ratto said there is no one that has done more for the Western Growers community over the last two decades than Tom Nassif. “The Award of Honor is the highest recognition for individual achievement to the ag community. Who has accomplished more for our industry?” Ratto, who is president of Ratto Brothers Inc., Modesto, CA, is also chairing the search committee to find Nassif ’s replacement, as the Western Growers president is retiring at the end of the year after nearly two decades of leadership. Ratto said they are big
shoes to fill but the search committee is moving forward with the effort and hopes to have a selection by the Annual Meeting, which will be held November 10-13 in Hawaii. It will be at that convention that Mr. Nassif will be recognized at the Award of Honor Dinner on November 12 at the Wailea Beach Resort in Maui. Western Grower & Shipper asked a number of people who are well acquainted with Mr. Nassif to weigh in on his service to Western Growers and his impact on the industry. (Some of the comments have been condensed and paraphrased.) “I’m a relative newcomer to Western Growers as it has only been the last 10-12 years that I have been actively involved with the board and dealing with Tom. I know some of my colleagues have a history going back 30 or 40 years. My quick impressions are that Tom is brilliant and funny and uses his wit in a very useful way. It has been my good fortune to be involved in this industry with a person of his caliber. “Under his leadership, this organization has done a wonderful job of building businesses that have brought great value to the membership. Tom has a great staff but he is the leader…and it is to his credit that he has built such a talented staff. “He has built some great programs from food safety to technology that set the trade association apart. He has done a tremendous job for Western Growers and for the industry. I don’t think there is anyone that has done any more than he has.” “I first met Tom because of my involvement with California Women for Agriculture. It was Tom who asked me if I would consider serving on Western Growers board as an at large member. Tom saw an advantage in having women with grassroots backgrounds in agriculture serving on the board. He appreciated what we brought and wanted to have a broader scope of participation on the board. Tom is inclusive. Eventually, I was able to get elected on my own right. He encouraged me to step up into a leadership position. “When I think of Tom, advocacy and diplomacy come to mind. He is the consummate diplomat. I’ve seen him in action in both Ron Ratto, Ratto Brothers Inc., Modesto, CA 2019 Western Growers Chairman of the Board. Carol Chandler, Chandler Farms, Selma, CA Treasurer, Western Growers Board of Director
Tom Nassif, Bob Gray, and Steve Barnard
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Sacramento and Washington D.C. He is a tough negotiator but is always diplomatic. A great example is when he introduced Gavin Newsom to the board. It’s hard to describe, but he wanted to let Gavin know that we were a bit suspicious, but we were open to listen to him. It was consummate Tom. He did it in such a funny way. “I think it is very fitting that we are giving him the Award of Honor, honoring his legacy and the tremendous service he has given to Western Growers.” Sammy Duda, Duda Farm Fresh Foods Inc., Salinas, CA Former WG Chariman of the Board “As Chairman, you get to spend quite a bit of time with Tom. I was struck by
several things about Tom. First was his passion for the produce business and his drive to do what’s right for the industry and, especially, for WGA members. He is a tireless advocate for our industry and his stamina is incredible. “On a humorous note, Tom is also very particular about what he likes especially with his food in restaurants. He is not shy about sending his food back when it doesn’t meet his expectations. I reminded him on more than one occasion what the chef does to the food when you send it back. He replied, “Yes I do as I read Anthony Bourdain’s book”, but he continued to do it anyway much to my entertainment. I never asked for a taste of what he ordered after he got it back from the chef!
“It is remarkable what WGA has become under Tom’s leadership especially with regard to its financial position. Having said that, he has never lost sight of the importance of member advocacy at a state and federal level. His leadership and guidance inWGAT (Western Growers Assurance Trust) and the opening of the Center for Innovation and Technology will be lasting legacies of Tom for many years to come.” Matt McInerney, Former Senior Executive Vice President of Western Growers “Tom commenced his employment with Western Growers in early 2002, which was a pivotal time in the history of the association, with the recent untimely passing of President Dave Moore. Tom brought to WG unprecedented career credentials. Upon joining the association, Tom challenged staff and the Board of Directors to prioritize both new and existing member services that would enhance the value proposition for WG members. There was a renewed energy on member-first activity for these last 18 years. “In an endeavor to advance policy at the federal level, Tom took the lead in advocating for having specialty crops included in the Farm Bill, something that was not a permanent situation before his arrival. He was also tireless in advancing legislation for an immigration fix. To this day, he is the lead for all of agriculture in negotiating a solution for the legal and reliable workforce needs of ag. To increase the position of WG as a national influencer on policy, he opened a Washington, D.C. office with WG staff advancing those critical
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Gary Pasquinelli, Pasquinelli Produce, Yuma, AZ Former WG Chairman of the Board “I met Tom Nassif in 1971, during the contentious labor battles in the Yuma area. I’ve always said we got a ‘twofer’ when we hired Tom. Western Growers always had someone running the insurance side and a different leader for the association side. Tom did both. He shattered that myth. “I’m not sure we knew when he was hired the degree of professionalism he would bring to the job. We knew we had a good man, but the skill set he possesses might have been a bit of a surprise. His commitment to the job and his integrity is unmatched. I think he can sell ice to Eskimos, but he is as polished as anyone in agriculture. As you can see I am the self- appointed president of the Tom Nassif Fan Club. He has set the bar very high and it is going to be very difficult to replace him.” Vic Smith, J.V Smith Companies, Yuma, AZ Former WG Chairman of the Board “I first met Tom shortly after he was hired (at Western Growers in 2002) when
issues important to the membership. “Since the establishment of Western Growers in 1926, there has not been a president that has left such an indelible mark on the association as Tom has. He was the right man at the right time for the challenges of the position of president. He has been true to the mission to enhance the profitability and competitiveness of the members, and Western Growers is a better place for his dedicated service.” Mike Stuart, Former president of Florida Fruit & Vegetable Association “I met Tom in 1979 in the middle of the Imperial Valley labor issues when I was working for Western Growers, but I didn’t really get to know him until after he was named president of WGA. “Both Tom and I realized that FFVA and WGA had a very good relationship and we wanted to continue that. We had many shared members and had the same vision with few differences. And we didn’t let those few differences get in the way of working together. We agreed to attend each other’s conventions when we could. Over the years we became very good friends and have had
a very good relationship. Neither of us shy away from differences when they arise and I believe we both respect that in the other. Tom is a very assertive individual. I think it is his basic personality and a result of his legal training. “As a former employee of Western Growers, I am very familiar with where the organization was when Tom came aboard. It needed new leadership. Tom was an outstanding selection. He was the right person for the right job. He came in and did what had to be done. “As far as working with him is concerned, a couple of things stand out… one was the partnership we formed, along with others, to create the Specialty Crop Alliance for the Farm Bill. Second, was the effort he put forth when we were negotiating immigration reform in the winter and spring of 2013 with the Senate and Californa’s Sen. Dianne Feinstein. Tom’s leadership was extremely helpful in putting together the agreement. His skills as a labor negotiator were very much in evidence. Unfortunately, we couldn’t get that legislation past the finish line but it was a heck of an effort.”
from left: Dennis Nuxoll, Tom Nassif and Congresswoman Zoe Lofgren
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ANNUAL MEETING
PLANTING PARADISE Wailea Beach Resort, Maui November 10 – 13, 2019
Join Us! Keynote Speakers
Workshops
PAC Lunch Arthur B. Laffer Founder / Chairman, Laffer Associates
Workshop I Tropical Top Chef
Workshop II The Future in Finance
Chairman’s Luncheon Daymond John CEO / Founder, FUBU
Workshop III AgSharks ®
Award of Honor Dinner John Wee & Owen Morse The Passing Zone
Workshop IV Hawaiian Family Games
Schedule
Sunday, November 10, 2019 8:30a–7:00p Registration & Guest Services
Tuesday, November 12, 2019 7:30a–5:30p
Pavilion Lanai
Registration & Guest Services
Pavilion Lanai Aulani Lanai Pikake 1 & 2 Jade/Plumeria Luau Gardens Pacific Terrace Jade/Plumeria
5:30p–6:30p
Welcome Reception
Kaho’olawe Lawn
8:00a–9:30a WGIS Sponsored Breakfast
9:30a–11:30a AgSharks ®
Monday, November 11, 2019 7:00a–7:00p Registration & Guest Services 8:00a–12:00p Board of Directors Meeting
12:30p–2:30p Chairman’s Luncheon & Keynote
Pavilion Lanai
3:00p–4:30p 5:30p–6:30p 6:45p–9:45p
Hawaiian Family Games Chairman’s Reception Award of Honor Dinner
Mauna Loa/Ilima Jade/Plumeria Jade/Plumeria Jade/Plumeria
9:30a–11:00a Tropical Top Chef
12:00p–2:00p PAC Lunch *
Wednesday, November 13, 2019 8:00a – 2:00p Golf Tournament* Wailea Golf Club *Separate Ticket Required for PAC Lunch and Golf Tournament.
2:30p–4:00p
The Future in Finance
6:30p–9:30p Partywith the Partners
Luau Gardens
REGISTRATION NOWOPEN www.wgannualmeeting.com
“Early on he had quite the presence and just did an amazing job at Western Growers. At the time he was hired, Western Growers was going through some rough times. Tom not only kept us afloat, but what he has done with regard to the bottom line is amazing. I think we got way more than we expected. He has been a man who has worn many hats and has done it well. We all knew about his labor relations skills, but we didn’t know he was going to be able to run all the businesses
he came to Yuma to introduce himself and listen to our concerns. I was very impressed with his desire to help all areas of WGA membership. My best memories working with Tom were associated with our travels. There was the Havana, Cuba, trip with multiple samplings of the finest cigars and his dancing at the night clubs. When I was chairman, he and I traveled to Palm Beach for the Florida group’s annual meeting and I really enjoyed his sense of humor which seemed to improve the further he was away from the office.” “I think Tom has done remarkable work for our association during his tenure as he has elevated WGA to greater recognition in the state governments we operate in and to an even higher level in Washington, DC. “He has ‘raised the bar’ for performance and accountability for all of us in our industry. The successes we have had over the last 18 years are directly attributable to his, and his team’s, efforts. We have been very fortunate to have him as our leader. Craig Reade, Bonipak Produce Inc., Santa Maria, CA Former Chairman of the Board “My first year on the board was the year Tom became the CEO so I have witnessed him close up throughout his WG career. I was a young man and it was an honor and a privilege to be on the WG Board. The senior partners at Bonipak like Milo Ferini knew Tom and had a very good opinion of him.
under the WG umbrella so well. “On a personal note, he always treated me and my family very well and made sure when he came to Santa Maria that he got to know our business. He is just a good guy to hang out with, though, I wish he was a little more considerate. I have been fishing with him a couple of times and he always catches all the fish. He should be more considerate of his fellow fishermen. He’s a very competitive guy.”
Tom Nassif with longtimeWG Board Member A.G. Kawamura, who also served as California Secretary of Food and Agriculture during Nassif’s tenure
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DISRUPTION ON THE FARM AgTech Balances Tradition and Technology
By Stephanie Metzinger F armers are tasked with the critical job of feeding billions more people while simultaneously battling challenges around stricter regulations, new consumer preferences, and environmental sustainability. With the rapid development of technology, they can now fight this arduous battle with more tools in their toolbox. Agriculture has always had a relationship with technology, but it wasn’t until about six years ago that the intersection between ag and tech blossomed into a game-changing movement. Investment in agtech was relatively flat prior to 2013, and if there was interest, it centered on biotechnology and seed genetics. However, there was a significant shift that year. Agtech grew 75 percent to reach $860 million of investment across 119 deals. Agtech has continued to soar, receiving $16.9 billion in 2018—a 43 percent year-over-year increase, according to AgFunder. “When I imagine agriculture in 20-30 years, I envision an incredibly high tech industry that would make a Semiconductor foundry look like a blacksmiths shop,” said Rob Leclerc, cofounder/ founding partner of AgFunder. “Working backwards, we’re not going to get there in a stepwise fashion but rather through this wonderful and terrifying process of creative destruction.” Adoption of agtech still lags among fresh produce farmers Despite the fact that investment continues to increase,
adoption within the U.S.-specialty crop sector remains slow. This is especially true with fruits and vegetables. “We see technologies that, if given the chance, would add precision and reduce costs within an operation but they are not readily picked up because they come with an implementation costs related to integration with existing systems,” said Hank Giclas, senior vice president, strategic planning, science & technology at Western Growers. “Yes, this can be difficult. But in the long run, the implementation and deployment will pay off.” Even crippling issues, such as the increase in labor costs and decrease in labor availability, have yet to move the needle on significant market adoption of labor management technologies, automation and mechanization. Seana Day, partner at Better Food Ventures and The Mixing Bowl, creates an agtech landscape map annually to guide the industry on the latest technologies being developed. Through her research, she has noticed that there has not been a significant market adoption of labor management, savings technologies or precision irrigation. “I think a lot of the reluctance to adopt has to do with the difficulty in showing ROI in a new system and equally, the existing infrastructure isn’t designed for the new technologies to do all they promise,” she said. However, other ag sectors have seen significant success in the adoption of technology. Take, for example, grains and oil seeds. Cost-saving technology delivering herbicide tolerance in canola and insect resistance in corn have provided farmers with productivity improvements through a combination of yield improvements and cost reductions. “When I look at successes in other commodities, I think the big manufacturers and input companies have done a better job of integrating new tech and playing a collaborative role in the agtech ecosystem,” said Day. “This has resulted in more acquisitions of innovative startups, more pilots and better distribution of tech through their channels and demonstrated business value.” Consumer experience top of mind for startups Challenges with agtech adoption can also be attributed to direction of investment. In 2018, $10 billion was invested in downstream food tech companies that focus on improving the consumer experience. Upstream companies received $6.9 billion, with most of that capital going into vertical farming, alternative proteins, genetics and biotechnology. Only a small amount of capital has gone into solving problems on the farm or
WG hosts numerous events to connect startups to specialty crop growers.
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innovating in the “messy middle” where areas such as logistics, business process, packaging and post-harvest monitoring are still big challenges. “I’ve been tracking this sector since the early days, and the thing that has surprised me the most is how difficult it is to align the real needs of the ag industry with the interest and risk-tolerance of the capital providers,” said Day. The recent boom in downstream technology interest proves that agtech startups are no longer setting their sights on farmers. They are now targeting consumers. “Six years ago, we saw startups trying to sell directly to farmers,” said Leclerc. “Now we see them going to the retailers and offering solutions that give the retailer more visibility into their supply chain or the ability to track key sustainability metrics that they can report back to the consumer.” Retailers upping game in both ag and tech Retailers are now getting more involved in the agtech and food production game. Understanding that consumers crave more information about where their food comes from, retail giants have recently taken steps to act as the direct line of communication between consumers and their food. This includes applying for a range of patents using drones to automate farming, creating technology that can help improve online food shopping and even taking food production in house. “I think retailers are becoming increasingly aware of the importance of fresh produce as their key differentiator because it’s something much harder for online retailers to compete against,” said Leclerc. “I see most of the continued push coming from Walmart, Amazon, and Target, and specifically focusing on areas of health, nutrition, sustainability, and food safety as consumers look to distributors with aligned values.” Amazon rolled out AmazonFresh, a grocery delivery service, nearly a decade ago and kicked it up a notch in 2017 when it acquired Whole Foods Market to provide more options for customers. To compete with Amazon in the battle to be a one-stop shop, Walmart is now growing foods from seeds—including its “Sweet Spark” cantaloupe that stays sweet year- round and its fruit-punch-flavored pickles called “Tropickles”—and has also applied for a series of patents targeting farm
is rapidly changing the dynamics of the agriculture. To meet their needs, all stakeholders must work together— everyone from farmers and retailers to agtech startups and regulators. Western Growers (WG) is leading the charge in uniting all players to achieve this common goal. WG recently partnered with agtech startup iFoodDecisionSciences and tech leader HarvestMark to roll out the Supply Chain Risk Management Solution, an industry-driven solution to take control of supply chain food safety and traceability issues as identified by the U.S. Food and Drug Administration. The program uses technology to advance food safety in three ways: 1) digitalize food safety paperwork; 2) provide item level traceability through the entire supply chain using blockchain- enabled technology; and 3) offer financial protection in the case of a contamination event. The anonymized data from this new program will benefit the entire industry, and ultimately consumers, and improve the supply chain reliability, transparency and responsiveness. “The industry is desperate for breakthrough technology in not only food safety, but also mechanization,” said Giclas. “In response, our Center for Innovation & Technology is rolling up its sleeves and starting to do the fundamental work necessary to speed solutions in these areas.” This year, WG’s Center for Innovation & Technology (the Center)—an agtech incubator located in Salinas, Calif.— launched a Crop Collaborative Initiative to increase the adoption of automation in agriculture. Under the initiative, nearly 30 growers, agtech entrepreneurs, venture capitalists, academic professionals, and leaders from technology companies are collaborating on innovative strategies accelerate field automation progress with a primary focus on field harvesting. The Center is also hosting numerous Grower Trial Networks meetings throughout California and Arizona, where growers have the first look at cutting- edge innovations and can provide direct feedback to the startups creating those technologies. The Grower Trial Network is an organized group of WG members who will be trialing and evaluating technology coming out of the Center. The group is led by WG’s Future Volunteer Leaders and supported by WG board members and the Center’s sponsors. “We provide an access point for the industry and I think people now recognize
Jocelyn Bridson of Rio Farms with Chris Terrell of Wexus
automation. Just last year, it announced a partnership with IBM to launch a blockchain-based, global food tracking network. Costco plans to venture into production and processing by bringing its poultry supply in-house, making it the first U.S. retailer to integrate its meat supply to the farm level. WG playing role in revolutionizing food supply chain Customer demand for more convenience, greater transparency throughout the food supply chain and an increase in local and organic food
Anthony Reade of Bonipak Produce with Connor Cunningham of WaterBit.
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us as THE center of agtech for specialty crop sector,” said Giclas. “What started out as us going around looking for new technologies to advance solutions in the fresh produce industry has now transformed into us working to filter ag technologies that come through our doors.” Startups balance tradition and technology The Center officially opened in December 2015 with six startups; today, the Center houses nearly 55 companies. Over the years, it has facilitated countless relationships betweenWGmembers who are willing to try new technologies to improve operations on their farms and agtech startups who are developing solutions that meet that farmer’s specific needs. For example, WG and SWIIM System formed a strategic partnership to provide members with a technological solution that is designed to help manage water use more efficiently. SWIIM, a resident of the Center, acts as an on-farm water accountant and allows agricultural water users to optimize water rights, monitor the crop water budget, conserve water and increase net
startup’s food safety compliance app. HeavyConnect, one of the original six startups housed in the Center, simplifies operational complexity and regulatory compliance for the agriculture industry by leveraging the burgeoning capabilities of standard mobile devices. Most recently, Wexus completed a landmark study for the California Energy Commission where it reached out to Rio Farms to pilot its technology to reduce the farm’s overall energy usage by providing actionable energy and cost data. After the project period, overall results established that Wexus helped Rio Farms successfully lower its average electricity usage. In addition to the startups housed in the Center, agtech companies throughout the nation are making strides in bridging the gap between technology and tradition. According to Leclerc and Day, though 2019 will be a quiet year for agtech exits, some startups who show the most promise for the fresh produce industry and are worth watching include Pago for labor management, AgSquared for farm management, Verdant Robotics for mechanization and Hazel and Afresh Technologies for food safety.
Patrick Zelaya of HeavyConnect
income for agricultural operations. Another water-focused startup, WaterBit, connected with Bonipak Produce/Betteravia Farms in summer 2017 to install its wireless precision irrigation solution that will enable the farm to limit redundant work, improve efficiencies and analyze its business more precisely. Bonipak Produce also worked with HeavyConnect to implement the
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CALIFORNIA DIRECTOR PROFILE
Franz De Klotz Richard Bagdasarian Inc. Mecca, CA
Director Since 2019 | Member Since 2003
Ag Career by Choice Not Birth
By Tim Linden U nlike so many others in this industry, Franz De up in Fresno, CA, and always had an affinity for agriculture. “I grew up in the Fig Garden development in Fresno where many of the houses were on one-acre plots,” he said, noting the family always had a vegetable garden and fruit trees in their backyard. De Klotz was drawn to that work, and even though his folks were in the medical field, when he was a teenager he looked for jobs on the farms in the surrounding communities. Coincidentally, he remembers working for several different fig farms in nearby Madera when he was a teenager. After high school, he went to the University of California at Davis and then transferred to Fresno State to study viticulture. It was an apropos major as he and his father had just established a vineyard in Madera. “We planted it ourselves. I remember putting in lots of end posts,” he recalls. The 200-acre vineyard consisted of French Colombard and Chenin Blanc grapes, and it is still in the family today. After graduating from college in 1983, De Klotz was advised to join California’s Agricultural Inspection Service as a way to improve his ag knowledge and meet prospective employers. In fact, he spent a year inspecting grapes vines in the Coachella and San Joaquin valleys. In 1985, he was hired by Sun World and worked for them for three years in various capacities, including in the company’s foodservice division at the Irvine Ranch in Orange County. That led to a position with Sysco in their Los Angeles office. After several years there, he went back to Sun World to work with the firm on managing some of its proprietary crops including the Superior Seedless grape and the Le Rouge Royale Klotz was not born into agriculture. His father was a physician and his mother a nurse. However, he did grow
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pepper. Those were life-changing times for DeKlotz as he met his future wife, who just happened to be the granddaughter of the Los Angeles citrus industry icon, Sam Perricone. After he was married, he went to work in the family business until the Perricone operation was sold in 1999. That led back to where his career started in California’s Coachella Valley and a position with his current firm, Richard Bagdasarian Inc. “My task, and the reason I came back, was to start Pasha Marketing, which is the company’s vegetable division,” he said. “I have been here ever since as vice president of marketing for both Pasha and Bagdasarian.” Bagdasarian is a longtime Coachella Valley produce company founded by Richard Bagdasarian in the 1950s. His bookkeeper, Lucille Tidwell, became a partner in the operation and the eventual owner after Mr. Bagdasarian passed in 1966. She was a true pioneering woman in California’s table grape industry. Her son- in-law, Mike Bozick, helped her run the company and grandson Nick Bozick is the current president.
De Klotz said the farming operation controls about 5,000 acres in the Coachella Valley, with 2,500 devoted to citrus (mostly lemons), 1,500 to grapes and 1,000 to vegetables. The vegetable operation grows a variety of crops including green, yellow and red bell peppers, eggplant, green beans, Brussels sprouts and seedless watermelon. The division was an early adopter of organic vegetables and is currently transitioning an entire ranch to organics to be compliant with rules and regulations dealing with organic production. De Klotz remembers first becoming aware of Western Growers when his mentor at Sun World, Carl Sam Maggio, was heavily involved in the association. In fact, he recently found an old memo that he had sent to Mr. Maggio when he was a young man expressing an interest in the organization and asking if he could become more involved. De Klotz remembers that former WGA presidents Dave Moore and Daryl Arnold shared a condo in the Palm Springs area, which is where he first became acquainted with
the association’s leadership. He counted both men friends in those early years of his career. “I was honored when I was asked if I would consider serving on the board. The history of Western Growers is a long one and I have always thought very highly of the organization. Mr. (Tom) Nassif is one of the great leaders in our industry.” De Klotz has been active in agricultural organizations in the Coachella Valley including serving on the boards of both the local water district and mosquito abatement program. “I think of it as a way to give back to the community and in that same way I am happy to serve at Western Growers and try to help enhance the profitability of agriculture.” Franz and his wife, Judy, have four kids, two in college (Emerson at Santa Clara University and Parker at USC) and two still in high school (Lloyd and Olivia). Looking back at his career in agriculture, he quotes the great Willie Mays talking about his life in baseball: “I can’t believe they pay me to do this,” he quipped.
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Ganaz Connects Farmers with Farmworkers to Cultivate Employee Loyalty
By Stephanie Metzinger “ I have 1,000 workers and have no way to tell them that it’s raining and work is canceled, and if they show up I have to pay them for their time.” “I don’t have an easy way to call back my seasonal workers to be sure they return this year, other than having my foremen spend hours and hours of paid time calling people.” “My company has high turnover and I don’t know why people are leaving.” Throughout Hannah Freeman’s 14-year tenure at Fair Trade USA, hearing concerns stemming from a breakdown in workforce communication from farmers all over the Western Hemisphere was a common occurrence. Her main focus at Fair Trade USA was to create partnerships with retailers like Costco and Whole Foods Market and build relationships with thousands of farmworkers and growers, but after learning about the crippling labor and communication issues the industry faced, she decided it was time to take action and find a solution. “I had a front row seat to what the industry was grappling with and really developed a passion for aligning the interest of different parts of the supply chain by building tools that truly helped all parties,” said Freeman.
In April 2017, she co-founded Ganaz, which is a technology platform that connects farmers with farmworkers, translating communications into their native language. The tool enables employers to connect with large numbers of workers to recruit, engage and manage their multilingual workforce at the touch of a button. Farmworkers don’t read email, they read texts When cell phones became a necessity rather than accessory in the 2000s, the rapid advancement of its technology transformed every industry—including agriculture. “What’s different today than 10 or 15 years ago is that most farmworkers have a cell phone,” said Freeman. “There’s now this huge opportunity, especially on a global scale, to serve the needs of employers who need to connect with their desk-less workers— whether it be on a farm, at a processing plant, or in a factory.” Freeman has spent the last two years developing a communication platform that breaks the mold of typical software products that are e-mail and app based. While creating the tool, she always keeps in mind that the types of technology that engage white-collar workers will not work for agriculture. For example,
most seasonal workers do not have e-mail, and if they do, they rarely access it. “Farmworkers don’t read e-mail. They read texts,” she said. “Plus, text messages have a much higher read and response rate as compared to e-mail or any other engagement tool.” Ganaz delivers messages from the employer to the employees directly to their cell phone through SMS (short message service). Workers can then easily respond to employers by simply replying via text. Additionally, unlike applications on smart phones, SMS messaging does not count against data plans.
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On the company side, farm owners, human resource directors, vice presidents of production, and office managers can all access Ganaz by opening up a web browser on their computer or phone and sending a message to all their employees with a single click. The platform works similarly to Gmail and Outlook, where users can compose a message, select the recipients and deliver the message to an unlimited number of employees at once. The message will be delivered as a text message, in the employee’s preferred language, to their phone. Farm owners can then view and respond to any replies from employees through the web platform. Additionally, Ganaz allows farmers to: • Send a translated message to all of last year’s workers with details on the upcoming season to be sure they return to your farm. • Send schedule changes, locations and training videos. • Send reminders, announcements, productivity reports and recognition for a job well done. • Hear questions and feedback from your workforce and respond quickly. Adding features to increase retention, simplify onboarding Closing a $2.3 million round of funding this past November, Ganaz has been able to hire more staff to beef up the platform. The startup recently rolled out a new retention tool that focuses on helping growers understand why people are leaving, and gives them the information needed to intervene before they lose their best workers. The tool allows farmers to build surveys, pulling from a library of questions tailored to employment in agriculture. These include questions surrounding wages, benefits, quality of field operations, working conditions, leadership evaluation, and more. The surveys can be scheduled in advance and employees can respond via text, anonymously. “Our new feature allows growers to benchmark themselves against others in the industry,” said Freeman. “For the most part, growers have an idea of why people leave, but they aren’t necessarily getting the whole story. The tools gives workers an anonymous way to clue growers into the fact that competing farmers upped their rates or that their foreman is mistreating their crew. It provides them accurate data, quickly, so that they can keep the people
they worked so hard to recruit.” Additionally, Ganaz is currently working on building an onboarding tool to help automate the new hire and training process. The tool digitalizes the manual data entry required when hiring new employees. By eliminating the paperwork, growers can hire the 100 to 500 new employees per week needed during peak harvest without worrying about the cumbersome administrative process behind it. The start-up company strives to be a value-add for the agricultural industry and is continually building new features and functions, based on input from growers. Since joining Western Growers Center for Innovation & Technology in February 2018, Ganaz has participated in numerous exclusive events where staff has interacted with growers to receive face-to-face feedback about their product and pitched their technology to venture capitalists for funding. “The benefits of being part of the Center and attending its events has been amazing,” Freeman said. “Everyone at Ganaz is a produce nerd, and we just love working in and for this industry. It’s really fun to serve agriculture—farmers, farmworkers—and create something for them that not only makes them happy but knocks their socks off.”
Ganaz, along with GroGuru, won the Automation Challenge hosted byWG and Radicle Growth
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