Tree Top expands variety of uses for fruit crops
“Nothing is the same as it used to be.”
There’s an understatement from Tom Hurson, who was talking about the Washington-based Tree Top. He is senior vice president of sales and marketing for the 1,000-member grower-owned cooperative in the heart of Washington’s apple country — a company that has been undergoing some big changes as it grows and evolves to meet market demand and maximize its growers’ crops.
“We consider ourselves to be one of the first sustainable companies,” Hurson said. “Our business started because there were apples that weren’t going to fresh market (and) didn’t have a home, and we created an industry — a whole business model.
“Retailers are patting themselves on the shoulder for selling ugly produce; we’ve been selling ugly produce for 60 years. Whole categories are developed because we’ve taken that ugly produce and turned it into something of value.”
While the company started out making juice as a way to use those extra apples, juice is no longer in the majority of its product mix.
“You have to continue to try new things and then use the ones that work out well to move into the future,” said Roger Strand, a Washington apple grower and Tree Top board member since 1983.
That’s what the company has done. Hurson said the company began making some major shifts about 10 years ago, when it completed several acquisitions that added non-juice business to its portfolio.
Tree Top operates seven processing facilities in all. Four in the state of Washington collectively process apples into juices, applesauce, frozen apple ingredients and dehydrated slices and pieces. The company also processes a variety of fruits into juice concentrates.
By acquiring an Oregon business with two facilities in 2008, Tree Top began processing additional products that included fruit purees and puree concentrates and sauces for use in baby food, beverages, fruit snacks and fillings, as well as dried fruit flakes. Its newest operation is a California facility that produces fruit preps for ice cream, frozen novelties and yogurt.
The company also made a major change when it put in a new sorting operation that mimics systems used in packhouses to better match grades of fruit with processing uses.
“We added a step to our process so we can take the fruit they are sending us and sort it even further to get the right fruit to the right process,” said Tree Top Director of Engineering Andy Juarez. “Even though it’s the same classification of fruit, it’s not a one-size-fits-all-type classification.
“That’s a pretty significant change to our business model and it’s paid some dividends.”
Tree Top has always sought new ways to process fruit, but Hurson said the drive to do that has only increased.
“It’s accelerated because we need to find ways to grow our business, and also because we had big customers coming to us and saying, ‘Can you help us with other ideas?’” he said. “We had people looking for us to help them find ideas, and our need to find ideas to help us grow our business.”
About half of the company’s output gets sold as ingredients for other processors, manufacturers and foodservice. The rest end up as consumer packaged goods.
On the ingredient side, the company motto is “More fruits, more forms, more possibilities.” For example, pet food is turning out to be a growing niche for fruit ingredients.
“They may be the pet food expert, but we’re the fruit expert,” Hurson said.
Flavored alcohols are another opportunity.
“Vodka used to be vodka, but now there are a variety of flavors,” said Sharon Miracle, Tree Top director of corporate communications. “We actually formulate for alcohol manufacturers, for example, and create some interesting things.”
The craft beer industry is yet another, with fruit being used in a variety of ales. “One of our larger apricot puree customers is a brewery,” Hurson said. “Ales are a big deal.”
Tree Top has also worked with several customers to formulate ingredients for sangria and kombucha fermented tea drinks.
“There really are very few areas in the industry where someone needs a fruit solution that we are not involved in,” Hurson said. “While we sell our own branded products, we help other companies make products better.”
And that’s where Tree Top tries to keep the lines clear. While a lot of major cereal manufacturers buy fruit from the company, for example, Tree Top is not likely to go into the cereal business itself.
Tree Top’s philosophy has it aligning with what it believes consumers look for in its brand, and that would be fruit.
“You’re less likely to see us saying we want to do a cereal bar that has a little bit of apple in it,” Hurson said. “We’re more likely to say, ‘Let’s put together a fruit bar that has a little bit of grain in it.
“We’ll supply them their fruit, but we’re not going to try and go head to head with (a cereal company). … We’re good at making fruit products.”
Tree Top consumer products include fresh-pressed juices, as well as those made from concentrate, fruit snacks and applesauce, including some organic versions.
In addition to jars and cups, Tree Top now offers its applesauce in Good to Go Fruit pouches. The company went all in when it decided in 2012 to begin producing applesauce in single-serve pouches.
“Applesauce is one of our competencies here, so (we thought) we already know how to make applesauce, let’s put it in a pouch,” Juarez said. “The market was there. The timing was right.”
This was new territory for Tree Top. Juarez said the company knew that going head to head with French-based GoGo Squeez, already leading in the segment, meant, it had to be done well.
“Our mindset was we knew we were going to have to compete with them, so we need to have pouch-making and filling machines that can do what theirs can do, and it would need to be completely automated so that our costs are competitive with what they are doing,” Juarez said.
Tree Top felt it had a competitive advantage because of its location among and relationship with its growers. The company invested in two dedicated pouch lines at its largest facility in Selah, Washington, that Juarez said cost from $5.5 to $8.5 million each, depending on how they are configured. Those two have since “maxed out” and the company is putting in a third.
“With form, fill and seal technology, there’s a lot of variables you have to manage,” Juarez said. “It can be a steep learning curve, but we fought through it — one, by making sure we got the right equipment and two, learning how to use it and be successful.”
While employees could have been tapped to pick up pouches and pack them into cartons, Tree Top opted for pick-and-place robotics to maintain a consistent run rate. The lines operate around the clock except for maintenance down time.
The pouches come in a variety of flavors including a new Fruit and Grain that includes steelcut oats as an ingredient and is selling in select stores to start. Miracle said it’s part of a Fruit Plus line using fruit and veggies and fruit with grain that continues to be developed.
“The pouches have been selling well, and we’re able to do it cost effectively,” Juarez said. “They’re our newest lines and also our highest efficiency lines — and some of our most profitable products.
“It’s been a winner for us.”
And it goes back to the company’s reason for being.
“For us, it’s just another outlet (for fruit),” Juarez said. “That’s why Tree Top exists. We’re here for our growers.”
— Kathy Gibbons, contributing writer