September 1, 2016

Spiech Farms invests more than $1 million in new products

A Michigan operation is adding a new product line for frozen produce in standup pouches, as part of a more than $1 million project.

Spiech Farms, a fourth-generation, Lawton, Michigan-based grower of blueberries, grapes, asparagus and lettuce, plans to hire an additional 55 workers as part of its expansion. The company was awarded a $220,000 business development grant from the Michigan Economic Development Corp.

In 2011, Spiech Farms was ranked 31st in the Inc. 5000 List of “Fastest Growing Food and Beverage Companies in America” by Inc. Magazine. Last year, the company had approximately 1,400 employees, with about 600 being in Michigan at peak production. In 2015, the company developed its own pay piece-rate app, tracking in-house traceability, yield and payroll data powered by iPhones and Bluetooth scales.SpiechFarmsBB

Tim Spiech, who oversees packing and operations, said the first two generations of the business were focused on the processing end, with his father, Steve, taking it from processed to more of a retail operation.

Spiech said his father grew weary of everybody telling him what he was getting paid for his crop at the end of the season, so he was meeting with chains and putting the company’s Concord grape program together.

After generations of success with the Concord grape, the company achieved its first harvest of the seedless “Thomcord” in 2015, a mix of Thompson seedless and Concord.

But blueberries are one of the company’s fastest- growing commodities, and it grows and packs in southwest Michigan, Florida and Georgia, Tim said. The distance between each region’s growing period creates a rolling season that allows Spiech Farms to harvest blueberries – including some organic offerings – eight months of the year.

The operation has been packing fresh blueberries since 2010, developing a new product line to help utilize its workforce and assets available during the summer months. In 2012, in order to bring more stability to its packing, pricing and berry volume, Spiech Farms started marketing and packing a line of 30-count frozen blueberries.

All of this growth followed a concentration on a new product for packing fresh asparagus in 2009, to take advantage of its available workforce in early spring.

Spiech Farms purchased 400 acres of land in Brunswick, Georgia, consisting of 135 acres of blueberries, and started propagating and planting additional organic blueberry acreage. It also owns 90 acres of blueberry production in Covert, Michigan.

The company started packing Michigan table grapes into pouches in 2016, and with the launch of its frozen pouch line, Spiech began producing and marketing direct to major retail chains.

Frozen pouches look to create a stable market for Spiech Farms’ frozen blueberry production while utilizing its existing assets in the offseason, Spiech said. “Due to the rising demand of fresh and frozen product, the company was able to add to our growing footprint of blueberry ground with 150 acres in Michigan,” he said.

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The accelerated approach included retooling an asparagus line to meet increased demand, leading to an output rise of 30 percent that allowed the end product to be fresher during the peak of harvest. The company had a number of planting programs to help solidify the packing and marketing operations.

Spiech Farms, which has a 20,000-square-foot, temperature-controlled packing shed and redistribution facility in Brooksville, Florida, also became GFSI third-party certified to continue an emphasis on food safety.

The blueberry endeavor has been an equal mix of frozen process and fresh market, Spiech said.

“We’ve always centered on getting fresh into retailers,” he said. “A byproduct of necessity has been to take our machine-harvested, slightly less grade that won’t make fresh grade as No. 1, and put it into frozen. It’s become bigger and bigger, and we’re bringing it into the fold with everything else.

“We market our name, label and brand straight into the retailer. In order to better sell fruit and vegetables, we’re using a pouch line with our brand of pouches.”

The business is working through processes to determine what scope and detail the new production facility will take, using a line in a leased facility to get “all the production straightened out and laid out and get answers to our questions. We’re still determining what we will need (in the new facility).”

Spiech said the company has more than 1,200 acres of fruit in Michigan.

“We’re still trying to utilize as much as we can for fresh,” he said. “We’re hoping to turn the fresh operations into the tip of the iceberg. We will only have a need to put the best of our production into fresh as we grow our market with frozen pouches and the frozen brand. Hopefully, the returns are equal, with greater flexibility and better control of quality.”

He said the growing side of the business won’t be impacted significantly by the plant expansion plans, but product movement should be aided when some of the crop is less than desirable for fresh market but can be shifted to frozen.

“It will even out the weather factor, so we won’t be so dependent on the weather being perfect. If you get a strong rainstorm at the wrong time with fresh, it has to go to processed, so it’s been almost a punishment. It’s a different market entirely.

“Once these programs gain traction, it will be a lateral move. Making decisions based on quality will not be to our detriment anymore.”SpiechBBpouch

He said blueberry pouches currently make up 15 percent of the product mix, and that should rise significantly with the expansion. The company also packages frozen pineapple, peaches, pears and other types of fruit.

“Our goal is to slowly fill the capacity with our own lines,” he said.

Pouching technology is “at the ground floor,” Spiech said. “It’s the hot trend at the moment. The largest obstacle is millions of dollars have bene invested in machinery for a pillow-type bag. A lot of infrastructure in the frozen industry is not set up for pre-made pouches. As people put in lines for the pre- made pouches, demand is very high.”

“Originally, we planned all this trying to determine how do we sell more blueberries, and sell at a higher price. As soon as people got word we were cold- packing, custom-packing, demand went well above what any of our lines could do.”

Spiech Farms is a direct vendor to nearly every chain operation east of the Mississippi, Tim said.

“We also have a good following in Texas and Colorado,” he said.

“We started with getting our packing label out to different packing houses,” he said. “Everything has grown very organically, getting sales in place first. We’ve systematically bought supplying farms or replaced the brokerage within new farms we’ve bought. Our basic strategy is to sell first, get the brand out there, and over time replace everything with vertically integrated fruit from beginning to end.”

In Michigan, Spiech said, fresh blueberries are “almost not viable without the mix of machine and hand picking for the fresh industry. Processed is all machine picked at this point. Those prices get so lost in the middle and continue every year to get pushed further down. Machines have to get a little better so cost savings are always going to come down every year. We’ll figure out how to get through it.”

— Gary Pullano


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