They came to Traverse City last year – multi-million dollar investment and all – because of the apples. Materne, the French-based producer of GoGo squeeZ, the first squeezable, re-sealable, 100-percent fruit applesauce, chose Grawn to locate its first domestic manufacturing facility. The company created 90 jobs – the majority filled by local residents – and started production of pouches in November.
Only one problem this year: A dismal 2012 local apple crop.
Meena Mansharamani, managing director of Materne North America, was just in town to mark the one-year anniversary of the partnership with the grower-owned cooperative Cherry Growers, whose members farm apples and cherries. Do no apples – thanks to bud-bursting warmth in March followed by frost conditions – spell d-o-o-m for the deal?
Not at all, Mansharamani tells The Ticker after her TC check-in.
“We’re working with Cherry Growers and looking at different geographies around the country this year, but we have trust in the long-term supply from this region,” she says.
The numbers back that up: the joint venture’s new manufacturing facility in Green Lake Township is 4-6 weeks away from completion, Mansharamani says. Materne is investing upwards of $23 million and Cherry Growers $11.6 million for expanded operations and the new 35,000 square foot facility.
Materne will be up to 140 employees by mid-2013, Mansharamani adds. Cherry Growers will boost its staff by 72, confirms president Brian Mitchell. The job creation is resulting in between $2 and $3 million in Michigan Business Development Program incentives for each company.
But why Traverse City and not, say, Washington state – the nation’s top producer of apples? Incidently, Washington is currently enjoying one of its best crops – if not the best – in history, producing some 109 million bushels at record-setting prices due to demand.
The reasons to establish here are two-fold, Mansharamani explains. First, Michigan ranks third in the country in apple production (New York is second and also had a very poor 2012 crop). In a typical year, the state harvests about 20 million bushels with more than 7.5 million trees in commercial production, according to the Michigan Apple Committee.
But this is no typical year. The 2012 yield? After nearly 90 percent of the crop was wiped out, just 3 million bushels.
“Obviously weather happens, but this is not the consistent track, and our plan is to source a high percentage of apples from Michigan going forward,” says Mitchell.
Apples aside, Mansharamani says a Midwest location was critical to efficiently serve its major retailers nationwide, including Walmart, Target, Meijer, Whole Foods, Costco, and Kroger. “We wanted to start centrally … being in the middle of the country helps keep the product affordable.”
When Materne looked at Cherry Growers, it saw a supply of high-quality, locally-grown fruit. Though other apple-growing regions were considered, there were some concerns outside of fruit supply, such as labor and liability.
“Cherry Growers rose to the top,” says Mansharamani.
While Materne does not have production figures or projections for the Grawn-based facility available, the company hopes to move full production to the U.S. by 2013 and production at the plant will be “continually increasing to meet this goal.”
And listen up local cherry farmers: GoGo squeeZ just added AppleCherry applesauce to its lineup this past June.