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Blueberry Bingo
company strategy by Mark Gordon | Managing Editor
Big-ticket customers sometimes bring big challenges, too. One company's trick: Be flexible.
It should be champagne time at Global Organics Specialty Source, a Sarasota-based organic food distributor. Thanks to the recent nationwide boom in organic foods, especially in Florida, the company now counts the Southeast's four biggest grocers as clients.
Company founder and president Mitch Blumenthal might be reaching for the aspirin though, as opposed to the bubbly. It's not that he's unhappy with landing Publix, Albertson's, Sweetbay and Winn-Dixie as clients. He's plenty happy about the revenue boost those clients are giving to an already fast-growth company.
But Blumenthal, 43, is learning a touchy entrepreneurial lesson: Big-time clients have big-time demands that can stretch the resources of a small business. Winn-Dixie, for example, uses its own trucks and picks up the goods at Global Organic's Sarasota distribution center, a process that could throw a wrench in the company's fine-tuned delivery system. Sweetbay requires private label products only, while Albertson's requests that every shipment be broken down from what's normally 40 or 50 pound loads into tidy 10 pound packages.
And while Publix doesn't have a specific request with each trip, it's still Publix. In Blumenthal's world, letting down Publix is akin to a toy distributor messing up a Wal-Mart order.
"Logistics are crucial, because you are dealing with perishables," says Blumenthal. "The secret is being able to provide all the service to all the customers."
Global Organics has discovered how to implement that secret, a process that starts with being flexible in order to meet various, and sometimes conflicting, demands.
The system obviously works, and not only because the company has landed some large clients. Its revenues have grown almost 400% since 2002, from $4.5 million to about $22 million in 2007. And in addition to the big four grocery stores, it has 300 other customers spread across seven states, as well as 20 overseas countries.
The company has 85 employees who work out of a 25,000-square-foot facility in an industrial park near the Sarasota-Bradenton International Airport. The facility, with more than 500,000 cubic feet of refrigerated space spread across six temperature zones ranging from 34 to 58 degrees, holds up to $300,000 worth of goods everyday. Products range from Florida-grown tomatoes and blueberries to coconuts from Thailand to Israeli peppers.
Farmer Mitch
The founding and ultimate growth of Global Organic can be traced back to Blumenthal, and specifically his stomach. Indeed, when he and his wife moved to Sarasota from Miami in 1990, Blumenthal wanted to use the pie-shaped plot of land behind their new house to test his gardening skills.
"I basically did edible landscaping," says Blumenthal, who worked in hotel management in Miami. "I had Brussels sprouts around the lamppost."
Soon after the move from the east coast, Blumenthal also opened a small breakfast/lunch restaurant in downtown Sarasota. But his passion quickly became organic farming. He and his wife began looking for land on which they could build a home and expand their tiny farm.
It took more than a year, but Blumenthal eventually found a 10-acre organic blueberry farm off a dirt road near Fruitville Road in Sarasota. He bought the land from a Mennonite couple, using a program from the federal government's Farms Service Agency, which offered to guarantee 90% of any bank loan he could get. And he sold the restaurant, called BITES, American Cafe.
Then it was time to become farmer Mitch. "I wanted to make this a viable farm," says Blumenthal. "I'm not the type to sit around."
Instead, he worked a harvest season with the farm's owners and joined groups such as the Florida Organic Growers. And he read a lot of books on organic farms. He called his new home and business Blumenberry Farms.
After a few months, Blumenthal started his own distribution business, selling his blueberries to import/export companies in Miami, going across Florida twice a week. In the beginning, he ran things with one other employee in a singe-wide mobile home on his farm, using a trio of eight-foot tables as desks.
As the business grew, he converted the barn into a banana and tomato room and leased a 53-foot refrigerated trailer for storage.
'Quality angle'
Blumenberry Farms is still operating today. But after more than 15 years, Blumenthal is past simply growing blueberries or tomatoes. He's now going for more unusual fare, such as Bull's Blood beets, Italian Romano beans and okra.
And Blumenthal remains a staunch advocate of organic farming and produce. He tries to speak with every job candidate who applies for work at Global Organic, to gauge how passionate he or she is about the industry. "We go for the quality angle," he says, "not the price angle."
The how-tos of maintaining top quality could be considered an on-going business lesson that Blumenthal regularly learns. For example, the company used to rent its truck and equipment from various companies, and in the early days, its transportation system was spotty. Says Blumenthal: "We were overpaying for trucks at first."
But for several years now, the company has leased all of its 14 trucks from one company. And Blumenthal hired a transportation director who runs the company's incoming and outgoing shipments with military precision. The company now even has two full-time employees on the payroll whose only job is to serve as backup driver, in case a driver gets sick or stuck somewhere. While the transportation system hums along on the roads, the company has several internal controls in place inside its facility.
Pat Bayor, a company vice president who runs the warehouse, says one constant challenge is keeping up with top-quality control levels, from temperatures to cleanliness.
The company is graded and monitored by several policing agencies, from the FDA to organic certification outlets, so its reputation is on the line all the time, says Bayor. And every new product and service requires a new operating system.
Such as its custom overwrap program, where it pre-wraps and labels fruits and vegetables for distribution to other stores. The program goes under the name Noah's Organic Garden, after Blumenthal's youngest son Noah, who has constantly grazed through the family farm, ever since he was a toddler.
Finally, the quality focus preached by Bayor and Blumenthal comes into play with all of its customers, no more so than those big-ticket grocery store customers, such as Publix and Albertsons. Blumenthal has long maintained that one of his overall business and life goals is to share his passion for organic produce with as many individuals as he possibly can.
And Blumenthal says that message is best spread by selling the products at the high-traffic stores.
"The whole mantra here," says Blumenthal, "is quality and passion."
AT A GLANCE
Global Organics
Specialty Source
Year Revenues %Growth
2004 $12 million
2005 $16 million 33%
2006 $20 million 25%
2007 $22 million 10%
REVIEW SUMMARY
Business. Global Organics Specialty Source, Sarasota
Industry. Organic foods, distribution
Key. Business looks to balance needs of big and small customers.
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