Natural Selection Foods

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Natural Selection Foods

1721 San Juan Highway
San Juan Bautista, California 95045-9780
U.S.A.
Telephone: (831) 623-7878
Toll Free: (888) 328-6742
Fax: (831) 623-4988
Websites: http://www.nsfoods.com; http://www.ebfarm.com

Private Company
Founded: 1984 as Earthbound Farm
Employees: 1,000
Sales: $150 million (2002 est.)
NAIC: 311421 Fruit and Vegetable Canning; 311423 Dried and Dehydrated Food Manufacturing; 111998 All Other Miscellaneous Crop Farming

Natural Selections Foods grew from a home kitchen to state-of-the-art food processing company. Headquartered in San Juan Bautista, California, it packages salads there from April through November. From November through March, the company utilizes a second facility in Yuma, Arizona. Natural Selections Foods’ produce is grown under the Earthbound Farm brand name on 13,000 certified organic acres in California, Arizona, Mexico, and New Zealand. Its product line includes more than 100 certified organic salads, fruits, and vegetables, which it distributes internationally.

Late 1980s: Two Native New Yorkers “Bagging” the Organic Salad Market

Andrew and Myra Goodman—fresh out of college, newly married, and looking for something different to do—founded Earthbound Farm in Carmel Valley, California, in 1984. After traveling extensively in Europe, where they gained an appreciation of farm fresh food, the native New Yorkers decided to take a year off to “work with their hands” before going on to graduate school. They came upon a neglected 2.5-acre raspberry farm south of San Francisco and arranged to fix up the property in exchange for rent. Drew Goodman had his undergraduate degree in environmental studies; Myra Goodman’s degree was in the political economics of industrial societies. Although they knew nothing about agriculture, the couple began growing organic raspberries—learning what they needed to know from a book on organic farming—and started experimenting with growing vegetables, such as baby bok choy and red mustard greens. According to Drew Goodman, quoted in a 2002 Forbes magazine article, “Organic just seemed the right way.” The company’s literature asserts that organic farming refrains from using herbicides, insecticides, fungicides, synthetic fertilizers, or soil fumigants, instead relying upon the application of organic matter, crop rotation, and beneficial insects—among other techniques—to build healthy soil and healthy plants. A 2002 issue of Forbes magazine states that, compared with conventional agriculture, organic farming is up to 40 percent more expensive.

In 1985, the Goodmans diversified their crops to include a variety of specialty greens and culinary herbs—all organic. When they were not growing their produce, they sold it at a roadside stand. “[T]hat operation was our initial job and ’moneymaking machine,’ “Myra Goodman recalled in a 2000 Fresh Cut article. “I’d bake raspberry muffins and make raspberry jam and raspberry applesauce. We did this kind of homestead thing and sold it all at our little raspberry stand on the road.” Working seven hours a day six days a week, they had little time to prepare their own meals; so the couple got into the habit of washing a week’s worth of greens on Sunday and bagging them in seven bags for instant dinnertime salads during the rest of the week. They also decided to market their fresh greens and herbs as well as their raspberries directly to local restaurants and retailers.

Then, in 1986, Earthbound Farm’s biggest client—a chef who bought most of their greens—exited his restaurant after a falling out with its management, and the Goodmans were left with a bumper crop of baby lettuces and no buyer. That was when the idea for “Earthbound Farm Salad Bags” was born.“Drew went to the supermarket and bought a bunch of plastic bags and I hand drew some labels,” Myra Goodman explained in a 2002 Bon Appetit article. The couple convinced a San Francisco natural foods store that busy households would want to purchase their washed and packaged salad greens, and Earthbound Farm introduced the first prewashed specialty salads packaged for retail. Also introduced were one-pound resealable bags of salad for food services.

The couple thought of their new venture as a “short-term solution to a short-term problem,” according to Drew Goodman, but the fast-growing company—still run out of the Goodmans’ home kitchen and barn—soon expanded to become a multimillion-dollar operation with six employees. Drew Goodman focused on sales and receivables for the new business, while Myra Goodman worked on payroll, accounts payable, and marketing. Myra Goodman’s father, a retired jeweler, designed and built the machinery for washing the produce and packaging it in small bags. In 1987, Baby Spinach Salad, Fresh Herb Salad Mix, Asian Salad Mix, and Baby Romaine Salad joined Earthbound Farm’s Mixed Baby Greens salad mix. To meet growing demand, the Goodmans hired farmers originally from Oaxaca, Mexico, to help them farm their land and the additional acreage they leased. In 1989, in a major leap forward, the Goodmans bought a 32-acre farm in Watsonville, California, where they began to grow more than 20 varieties of specialty lettuces.

Early to Mid-1990s: The Formation of Natural Selection Foods

By 1992, the bagged salad greens commodity that the Goodmans had invented was taking hold nationally. A great boon to the business occurred that year when Costco became a customer. Organic baby lettuces proved to be the perfect entrée into conventional supermarkets for the company, and other major food retailers, such as Safeway, Albertsons, and Lucky’s, also began selling Earthbound Farm’s one-pound bag of salad greens. The company moved to a 9,000-square-foot packaging plant in 1992, and introduced several new items throughout the first half of the 1990s. In 1994, Earthbound Farm introduced its upscale Ultimate Salad Kits, organic greens paired with all-natural dressings and toppings—a complete salad in a kit. At the same time, the company, true to its roots, opened a roadside farm stand in Carmel Valley, where it offered its full line of organic salad mixes and produce, as well as a line of custom-made foods.

By the mid-1990s, the Goodmans were so overwhelmed by running their business and becoming new parents that they hired Mark Marino, an organic farmer with close to 20 years of growing experience and a degree in communications, to continue their experiments with soil and seeds on the company’s Watsonville acreage. In December 1995, Earthbound Farm, which by then was farming 800 acres, partnered with a group of large-scale third-generation farmers in the Salinas Valley in California, called Mission Ranches, and formed Natural Selection Foods. The next year, the company diversified its product line with the introduction of organic vegetables such as broccoli, cauliflower, celery, green onions, artichokes, radishes, leeks, and red tomatoes, sold under the Earthbound Farm brand. The company moved to a state-of-the-art, 25,000-foot production facility in San Juan Bautista, California, in 1996. In 1997, it launched its Website for trade and introduced organic specialty tomatoes and strawberries.

By 1998, Natural Selection Foods was farming 5,800 acres of organic farmland, adding potatoes, carrots, and citrus fruits to its mix of crops. In 1999, Tanimura & Antle, one of the world’s largest conventional lettuce growers and marketers, became a one-third partner in the company. As part of the strategic partnership, Tanimura & Antle transitioned 1,500 acres of prime farmland in the Salina and San Joaquin Valleys in California and in Yuma, Arizona, to organic practices to allow for year-round growing in order to help Natural Selection Foods meet the burgeoning national demand for organic produce. “The organic industry’s day has come,” Drew Goodman was quoted in the Monterey County Herald article announcing the partnership. “We’re no longer a fad on the fringe but instead viewed as a long-term consumer-driven trend to be taken seriously.” The organic industry had grown approximately 20 to 24 percent annually throughout the 1990s, while conventional grocery sales had increased 3 to 5 percent from 1984 to 1999. By the dawn of the 21st century, Natural Selection Foods, a pioneer in the mainstreaming of organics, was the nation’s largest grower and shipper of organic produce.

As part of its commitment to educating consumers about organic practice, Natural Selection Foods opened the “Kid’s Garden” at its Earthbound Farm roadside stand in 1999. The Kid’s Garden offered curriculum guides for teachers and activities for students during their farm tour. Natural Selection also produced a musical CD entitled, “We’re Next!,” for elementary school-age children as part of its educational activities. The CD raised money for children and environmental causes by teaching about the importance of caring for the environment.

In 2000, organic farming sales reached $2 billion, and packaged organic salads did about $700 million in sales. Natural Selection was marketing its produce in all 50 states, enjoying about 65 percent of the organic salad market. The company also sold conventionally grown produce to foodservice clients—about 40 percent of its business—to support its transitioning land to organic ground. It farmed on 13,000 certified organic acres in three states and Mexico, with production facilities in California and Arizona and approximately 1,000 employees. The company formed an alliance in 2000, a marketing partnership with Rainbow Valley Orchards, to supply certified organic citrus and tropical fruit under the Earthbound Farm organic label, as well as another alliance with carrot grower Bolthouse Farms, Inc.

Company Perspectives:

Natural Selection Foods’ mission is to make the organic choice viable. The company is committed to growing the organic category and making organics viable for customers, consumers, growers, and employees.

Organic farms still provided less than 2 percent of the nation’s food supply and took up less than 1 percent of its cropland, but organic food sales were one of the fastest growing categories in supermarkets. In 2001, to keep pace with the growing popularity of organic produce and with its own growth, Earthbound Farm updated its logo and began an aggressive advertising campaign, the only organic produce company to advertise directly to consumers. It also expanded winter operating capacity by increasing the Yuma, Arizona facility to 115,000 square feet.

Also in response to the new emphasis on organics, the U.S. Department of Agriculture moved to standardize regulations for foods grown without synthetic pesticides or other chemicals in 2002. The National Organic Rule, a product of ten years of deliberation by growers, scientists, and consumers, reserved the term “100 percent organic” and “organic” for foods produced without hormones, antibiotics, herbicides, insecticides, chemical fertilizers, genetic modification, or germ-killing radiation, according to Newsweek in September 2002. Food producers that documented their compliance with the rule qualified for a new USDA seal declaring their product “certified organic.”

Natural Selection continued to introduce new items, such as Baby Spinach Salad and tray-packed organic vegetables, and to maintain its commitment to supplying easy-to-use healthful foods for healthful living. The company’s next goal, according to Myra Goodman in Bon Appetit in 2002, was to “convert the borderline customer.” With sales of organic produce increasing by more than 20 percent a year, the Goodmans hoped that more growers would switch to organic farming and drive consumer prices down. According to an article in Bon Appetit magazine, sales of organics were still anywhere from 15 to 100 percent more expensive than conventional products. The company’s and couple’s commitment to organic farming would never waver, given their belief that this type of farming produces the best food and helps ensure a clean planet now and in the future. “I don’t have time to save the world,” Myra Goodman was quoted in Bon Appetit,“ but with organic food, I know that I’m both feeding my family something healthy and doing something good for the environment.”

Principal Competitors

Fresh Express; Dole Food Company, Inc.; Ready-Pac.

Key Dates:

1984:: Earthbound Farm is founded.
1986:: The farm starts selling bagged salads to retailers.
1992:: The company starts selling its products to Costco; the business moves to a 9,000-square-foot packaging plant.
1995:: Natural Selection Foods is formed as a partnership with a group of Salinas Valley farmers, Mission Ranches.
1996:: Natural Selection Foods moves to a new 25,000-square-foot production facility in San Juan Bautista, California.
1997:: The company launches its Website for trade.
1999:: Tanimura & Antle becomes a one-third partner in the company.
2000:: Natural Selection Foods forms a marketing partnership with Rainbow Valley Orchards and with Bolthouse Farms, Inc.
2002:: The company updates its logo.