Sandstone Marketing targets value-added niche

When Milas Russell Jr., a melon grower in Arizona and California, looked at the fresh-cut industry in the early 1990s, he didn’t see it as a viable market segment. But a decade later, fresh-cut was going strong and Russell saw there was a need for a company to supply processors with quality product year around.

Russell had been looking to get out of the commercial growing market because consolidation had made it hard for small growers like him to succeed. So in 2001, Russell took his company, Sandstone Marketing, from growing long shelf-life melons to producing cantaloupe and honeydew specifically for the fresh-cut market.

“Retail was so competitive and had so many large players at that level that we couldn’t compete. We knew how to grow melons and package melons, so we looked at the fresh-cut industry.”

The move into fresh-cut melons hasn’t been easy, but it has been rewarding, Milas said. He’s been able to work closely with a few key customers to help them develop the best products for supermarkets or foodservice.

Fresh-cut customers have specific requirements that include size of the fruit, density, yield (as far as edible fruit) and the most important aspect – flavor. Fresh-cut differs from retail sales because customers have a choice, Milas said. If a retail shopper picks out a fresh melon from a bin and it doesn’t have the best taste, that shopper won’t give up on the produce because they selected it. But fruit in a fresh-cut package has been selected by the processor, and if a customer isn’t satisfied, he or she may try it one more time, but no more than that if they’re still not satisfied.

“With fresh-cut, your customers didn’t have the choice, so you’d better have good fruit,” Milas said.

Sandstone History

The son of a farmer, Milas has grown melons for more than 30 years. He started working with melons in his early 20s and was fortunate to work for a company that pioneered the practice of field-packing melons, then using vacuum cooling to get them to storage temperatures. At that time, most packers were harvesting the melons, using hydrocoolers to chill them, then packing them in boxes for storage and shipping.

In 1979, Milas decided to set out on his own with the help of his wife, Diana. They grew melons for retail customers, but as growing operations and marketing companies consolidated, it became difficult to compete on price with the big guys because the Russells didn’t have the economies of scale. So by 2001, they were looking for new markets and found fresh-cuts.

Sandstone Marketing is still a family-owned operation, with Milas Jr. overseeing the growing operations and sales, Diana handling the quality control and harvest and their son Milas III in charge of cooling and public relations. Daughter Lauren conducts taste tests at stores in California, and nephew Lance White recently joined the company on the growing side of the business.

The business grows honeydew and cantaloupe specifically chosen for fresh-cut processors. The Russells recently got back into retail markets, but not the big supermarkets. The company is growing specialty and exotic melons for small, high-end stores with discerning customers that are looking for a high-end taste.

Sandstone Marketing grows primarily in California and Arizona. The company headquarters are in the Yuma, Arizona, area, and growing operations there usually last October through November. August through September, the Patterson area of California produces melons and in July most of the melons are coming from Kettleman City in central California. Some melons come from Mexico, but there are some sanitation hurdles to overcome so it’s not a steady supply, Milas said. However, the company is shipping melons from Chile, and Milas said he’s impressed with the quality.

“The Chilean melons have incredible flavor,” he said.

And flavor is the most important aspect, and it’s something Sandstone is able to focus on because of its positioning in a niche market.

Fresh-Cut Fruit

Fresh-cut processors have specific requirements for melons, but Milas said Sandstone focuses on one thing: taste.

“The fresh-cut fruit business is all about flavor,” he said. “In a sense, what we’re doing is selling flavor.”

They develop that unique flavor by working with breeders to test germplasm – usually even before seed companies can get their hands on the material. When Sandstone first started looking for fresh-cut varieties, there were no breeding programs working on material for fresh-cut processors. After a lot of testing, the Russells found three lines that were going to be abandoned because they didn’t have desirable qualities for the fresh retail market. But they were perfect for processors, and Sandstone still grows those three lines plus one other exclusively.

Harvest procedures can have an impact of the flavor profile of the melons as well, Milas said. Melons destined for fresh-cut processors are typically left in the field longer than retail melons because they won’t have time to ripen before they’re displayed at the store. Plus, ripening them on the vine makes the flavor stand out even more.

“We have to learn how to grow them differently and harvest them differently,” he said. “We have to be a little more careful so that the flavor profile can develop in the melon.”

Cooling is one of the most important aspects for quality for fresh-cut processors. In the arid Yuma region, melons that come out of the field can be as warm as 90º F, and they need to be cooled to 34º F to 36º F for cantaloupe or 45º F to 50º F for honeydew. Sandstone’s melons begin a cooling process even before they arrive at the cooling and storage facility. At harvest, the melons are packed in boxes in the shade and transported in a dry van that is heavily ventilated. Before that process was implemented, melons could reach temperatures in excess of 100º F – which will speed up ripening and change the flavor profile – but now they rarely get above 90º F.

“Learning how to harvest then leads to better harvest techniques, which then leads to better products,” Milas said.

Sandstone is able to have a lot of control over the product because it’s a vertically integrated company. The Russells are responsible for finding the land to rent in California, Arizona and Chile, they can control the production schedules, oversee the cooling procedures and even determine when and how to load the trucks for shipping.

But that all costs time and money, and if a company doesn’t see added value in the melons – better quality and taste with personal customer service – then it’s easy for them to get caught up on the cost, Milas said.

“Our biggest block is price. It just costs more to grow these types of melons,” he said.

But when a company just focuses on finding the cheapest melons, the supply isn’t consistent and the overall quality of the fresh-cut product goes down. He’s seen a few companies start using cheaper melons – flavor goes out the window to price – and within three years their fresh-cut melon business has gone away.

Working with Processors

”We can really focus on a customer’s needs,” Milas said.

To really understand the market he is serving, Milas and some of his employees visited a processing facility and worked on the line for a couple of days. They were able to see what the workers were doing to the melons and what the processor needed from him.

In addition to developing produce that has the best flavor, customers have manufacturing requirements to follow. Traceability and food safety are important on the retail and processing side, so the farms follow Good Agricultural Practices and the cooling and storage facilities follow Good Manufacturing Practices.

“Everyone is concerned about safety,” Milas said. “We’ve been fortunate to have no issues, but that’s because we’re concerned about it and doing something about it.”

Sandstone codes each box that is packed in the field, so if a customer calls up about the melons, the code will tell where that melon came from and when it was harvested.

“They know we have a good traceability program,” Milas said. “We prove our traceability every time a customer has a question about taste or size.”

Providing customers with consistent, quality melons requires strict quality control procedures. Sandstone tests a minimum of five boxes a day per quality control employee, which could be as many as five depending on the number of crews working, Milas said. For official tests, the QC personnel will test the whole box, and when they’re not conducting an official test they’re taste-testing melons from the field and cutting them to check the size and seed cavity size.

Working with fresh-cut processors is all about maintaining the highest quality, and the fresh-cut industry is all about providing customers with the best qualities, from visual appearance to taste. By focusing on the raw product from the ground up, going back to the germplasm selected to grow the seed, fresh-cut processors have found that customers respond to high quality fruits and vegetables that consistently are high in flavor and visual appeal.

“We want our customers to come back and keep buying again and again,” Milas said.