Fruits of labor
Natural-foods manufacturer stays true to its origins
The inside of the Smucker Quality Beverages plant is impressive. Even when the thousands of pounds of fresh fruit aren’t being processed, there’s still plenty going on.
The cavernous plant in south Chico bottles an average of 18,000 to 20,000 cases of juice a day, more than 5 million a year, most of them under the familiar local imprint of R. W. Knudsen. The company doesn’t release sales figures, but a conservative guess would be that it does in the neighborhood of $50 million a year in business.
The company now distributes close to 325 different flavors of juices, sports drinks and even vanilla crème soda and root beer. “We’re probably the leader as far as variety,” said Operations Manager Randy Day.
Day said the company has “a nice position in natural foods,” owning about 60 percent of the market share among such beverages. This makes it one of Chico’s most successful and famous exports, second only perhaps to the Sierra Nevada Brewing Co.
Like Sierra Nevada, it started small but with a big dream.
Back in 1961, Russel William Knudsen started bottling grape juice out of his vineyard in Paradise. From the beginning, he wanted to produce high-quality juices that were healthful and delicious.
But it was his son Bill who really got the business, then known as Knudsen & Son, up and going in the late 1960s. “Bill Knudsen took the ball and ran with it,” said Day.
It was Bill Knudsen who would later develop the popular spritzers, carbonated drinks sweetened with fruit juice rather than high-fructose corn syrup, primarily for his kids who liked the carbonation but didn’t need to be chugging down all those sugars.
By 1984, when the Knudsens sold the operation to Smucker, it had a full line of quality juices, including many that were organic, and spritzers.
Following the sale, Knudsen ended up staying on as the general manager until February 1998.
The designation “family” that is now included on the R. W. Knudsen Family logo is more than fitting. Despite having tripled in size since the merger with Smucker, the business is still very interested in maintaining a family atmosphere among its employees. Day said the merger made perfect sense for both sides. Smucker was able to tap into a natural-foods market that wasn’t fully developed, while Knudsen gained the capital to expand its operations. A major factor in going with Smucker was that, like Knudsen, it was a family-run business.
“Smucker tries to run the company the same way Knudsen does,” Day said. “It was a good fit.”
Day also said that the company’s turnover rate is very low. “We’ve been able to grow the business and retain employees,” he said, mentioning that the average tenure of a Smucker employee is more than 15 years.
Smucker has close to 150 employees in Chico. Besides bottling the Knudsen products, it also bottles beverages for other companies, including Santa Cruz Organic, After the Fall, Rocket Juice, Heinke’s, Natural Brew and Trader Joe’s. Santa Cruz is the fastest growing of these companies, while Trader Joe’s has been part of the fold for the last 15 to 20 years. Their products are bottled by Knudsen but carry the contracted companies’ labels.
While most of the Knudsen-label products go to such natural-foods stores as Trader Joe’s and Wild Oats, some can be found in the natural-foods sections of larger chains such as Raley’s. Chico’s own S&S Produce has perhaps the widest selection of Knudsen products locally.
Since it’s a lot more expensive to make products sweetened with healthful fruit juice rather than tooth-enamel-eroding sugar, the products’ price tag is a little loftier. “It’s a boutique-type business,” said Day.
But Smucker has cultivated an expanding and loyal customer base. Day said its customers tend to buy the juices in the larger 1-gallon size rather than the single-serve, 8-ounce sizes. He also said that they prefer glass bottles instead of plastic, probably because of the aesthetic aspect, which is why the only Knudsen products that are put in plastic are the Recharge and Recharge Plus sports beverages.
The commercials say, “With a name like Smucker’s it has to be good,” and a recent tour of the bottling facility supported that claim. It’s a huge, spotlessly clean operation located in a 125,000-square-foot, warehouse-type building perched on 29 acres off the Midway just south of Chico—a far cry from the company’s modest beginnings in the 1960s. The vast operation is self-contained, including its own on-site wells and waste disposal system, which directs most of the unused byproduct to animal feed for local farms. The plant even has its own marketing and graphic design departments.
Inside, the cavernous building is dominated by a complex bottling system capable of filling thousands of bottles and cans of beverages every day.
The bottles travel through a complex conveyer system that twists from floor to ceiling, where they are cleaned, filled and labeled. There’s even a camera that optically inspects each bottle for chips or other imperfections.
But perhaps more significant is the fact that the company has retained long-standing relationships with growers, mostly in California, and even has field representatives who check to make sure the incoming fruit is of superior quality.
The facility processes close to 35 million pounds of fresh fruit between the months of May and August, including organic and commercial apples, organic and commercial pears, cherries and grapes.
Smucker also has a plant on Hegan Lane, where juices are stored until they are ready for distribution, which reaches as far as the Midwest. There’s also a smaller facility located in Havre de Grace, Md., that employs around 50 people.
Is there a danger of the operation moving out of Chico? Day said the company is enjoying a record year in profits and doesn’t see any drastic changes in the near future.
“As long as numbers are good and there’s a need for the products, you have a place," he said.