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CRACKING THE GLOBAL MARKET

Travaille, Phippen almond hullers seal their business with growers on a handshake

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CRACKING THE GLOBAL MARKET

Dave Phippen holds a handful of damaged nuts that are automatically removed from the product in the hulling operation. Phippen said being able to cull out those almonds probably raises the price f...

GLENN KAHL/The 209


POSTED September 15, 2012 2:04 a.m.

Farming is still based on a “handshake” with the Travaille and Phippen families in their more than 50-year-old almond hulling operation on Graves Road in Manteca that serves some 70 growers from Bakersfield to north of Chico.

Bud Travaille and partners Dave and Scott Phippen wouldn’t have it any other way in their family-owned operation that employs some six dozen workers – mostly family groups who have been with the company for many years.

They don’t believe in performance contracts with their growers, maintaining some 1,200 acres of their own in farming production.

“Our handshake is our bond.  We will do what we have told growers we were going to do and if we don’t they can fire us,” Dave Phippen said Friday.  “This company has a contract with nobody.  It is based on performance and the day we don’t perform is the day we get fired,” he added.

“I live constantly under that fear, because I worry every day and night about who I am letting down,” he said.

The Manteca hullers are also growers in their own right, with the operation being launched more than half a century ago on North Ripon Road with the Graves Road plant coming later in its evolution within the two families.

Ninety-five percent of what they sell is exported to 26 foreign countries, still doing a little domestic business,  but admittedly not much.  The Graves Road operation powers its plant with 3,400 solar panels located just north of its new warehouse, producing a million kilowatts a year and being 95 percent efficient

“Our label is not known anywhere in the United States,” Phippen said.  “Our label is more known to folks in Germany, Japan and the Middle East.  It’s known to people who use almonds as an ingredient and is not known by the ultimate customer – that to me spells the very success of the industry.”

Phippen said people keep asking him when he’s at banquet meetings in the Midwest about the industry’s successes – where they say they can’t believe the “almond guys” can flood the market and still keep landing on their feet economically.

“I tell them it’s a wholesome, tasty and nutritious food and it’s in every meal.  It can be in breakfast, it can be in lunch or it can be in dinner.  It can be garnished on the main entrée, or it can be garnished on the dessert,” he said.

United States largest consumer of almonds

The United States is the largest consumer of almonds as one nation, Phippen said, adding that the U.S. tends to not only use them as an ingredient but heavily as a snack.  He noted that if you go to Germany the per capita consumption is quite large, as well, where they are used as an ingredient in their foods.

“They are just now catching on to the idea of almonds as a snack food.  We have to use different words in Germany because, with the word snack,  they think of it as a fat eaten between meals that is not healthy.  We have to find just what name they want to use in Europe that has been our greatest mature market.  We think we can expand on that market with the introduction of snacks,” he said.

The Manteca grower, packer and shipper said that Europe was the number two in consumption that has now been replaced by China – a huge emerging market.  He said his firm is spending a lot of its advertising marketing dollar in China and India, not wanting to give up on the U.S. domestic market.

“We’ve always spent the largest part of our advertising dollars domestically.  We’re pretty darn big in Canada and we’re learning to be better in Mexico, but I’m not sure we are on the map yet in India and China,” he quipped.

Phippen said there are huge replanting operations in the eastern foothills beyond Oakdale, saying there is added opportunity there.

“It’s unbelieveable – it’s the new expanding territory!”

Thinking back to earlier years he said, “Our territory has been – Ripon, Manteca, Modesto and Escalon – pretty much a 40-mile radius.  Now I’m sending trucks all the way to Knights Ferry, Denair and Oakdale.  We’ve got more trucks on the road today.”

He explained that when they sent a truck out to a grower to pick up a load, it was usually back in 20 minutes but now the drivers are out for an hour and a half to two hours with some seven trucks on the road most days.

One of the other challenges he noted is the traffic on Highway 99 in Ripon that starts slowing down about 4 in the afternoon. 

“So I’ve got growers on the other side of the river waiting and I get into that gridlock with transportation getting to be more of a problem.  That wasn’t in our business plan 20 to 30 years ago because it didn’t exist,” he said.

He added that he has trucks going to Dillard Road the other side of Galt and Elk Grove where he never thought anyone would grow almonds.  He said it is an hour to Dillard Road and an hour back stretching out the day and increasing the number of trucks needed in their hauling operation.

Phippen said that his company is reaching out with a broader net than what was the norm in past years.  He noted the Travailles and Phippens worked  for people who had similar growing operations to theirs in Ripon.  With hindsight they probably should have built their new plant farther to the east, he said, because of the new acreages going into new grows with more trees and the highway congestion.

In addition to the two Phippen and one Travaille, the firm has added Dave’s son-in-law Nick Gatzman as a 10 percent owner and part of what they plan to be the next generation of leadership in the firm.  Nick is married to Phippen’s daughter Jamie.

Generational relationships

“Our goal is to have more members of the next generation in ownership in the coming years.  Not only are we getting older and having a harder time keeping pace, the farmers that we serve are also my age and some of them are tiring or selling their ranches,” Phippen said.  “We need to be in contact with that next generation – those folks that are in their 30s.  We need leadership and ownership of that age group so they can build new bonds with the younger growers out there.”

Phippen added that many of the guys he cultivated in the agricultural business are getting tired just like he is at this point in time.

This year’s harvest is estimated to be bigger than last year’s by the National Agricultural Statistics Service (NAS) that sends teams into the fields in the late spring attempting to count the almonds on the trees and speculate on price at harvest time.

“We’re seeing slightly less than last year, Phippen said. “The nonpareils that have now been processed had been estimated to be down from last year.  But, NAS thought the pollinators would make up for the lack of the nonpareils.  We are just getting into the pollinators, so I don’t have a lot of data on them.”

Phippen said the statisticians came up with an expected 2.1 million pounds of harvest which is slightly more than they had last year releasing those figures in July which impacts pricing and people’s expectations with “quite an impact” on the industry.  He added that in reality it will be closer to two million pounds or slightly less.

“The price has moved upwards and that is a good thing,” he said.

 

— GLENN KAHL

209 staff reportrer

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