GENEVA — A couple of “really rough years in the orchards” convinced Brian Nicholson and Red Jacket Orchards that it was time for another tweak of its business model.
In its 61st year of operation, the company said it will be intensifying focus on its rapidly expanding fruit beverage business and downsizing fruit-growing operations.
“We’ve got a very healthy, growing beverage business,” said Nicholson, who is Red Jacket’s president and CEO. “It’s really become the big part of the business. We have to head where we make money.”
As part of the restructuring, Red Jacket will reduce its 400-acre orchard operations by about half. Some may be sold, some leased, he said.
Nicholson said Red Jacket faced “hundreds of thousands of dollars” in expenses to upgrade its orchards with the newer apple varieties consumers are demanding.
“There’s a reduction of interest in the old favorites,” said Nicholson, such as the venerable McIntosh apple.
But moving to these new varieties comes at a steep price, he explained.
“It costs $10,000 to $15,000 per acre to put new orchards in,” said Nicholson, pointing to the trellis-style dwarf tree orchards that are gradually replacing traditional ones.
The new trees produce lots of apples, but they are expensive to plant, he said. Additionally, apple and other fruit orchards require significant labor that is not only getting scarcer, but could also get more expensive, said Nicholson, if the state approves overtime pay for farmworkers.
Changing weather patterns are also affecting crops at Red Jacket which, besides apples, includes peaches, cherries, strawberries and apricots, he said.
Conversely, Red Jacket’s juice line is booming, and the goal is to become a national brand, he said.
Freshly pressing whole fruit and bottling juice is now the dominant business segment for Red Jacket, said Nicholson, comprising 80 percent of company sales, while growing at a 10- to 25-percent pace annually.
With those numbers, said Nicholson, it was clear what direction the company needed to take.
In 2010, it built a 25,000 square-foot facility for its juice line. Red Jacket plans to expand beverage sales in the eastern United States and to double sales of its all-natural beverage products over the next five years. The ultimate goal, he said is to make its products a true national brand.
The reduced fruit-growing acreage that takes effect this year won’t be seen locally, Nicholson explained, but it will affect how far Red Jacket fruit is distributed.
Nothing changes at Red Jacket’s retail store off of Routes 5&20 in the town of Geneva, he emphasized.
“We just want to assure our customers that our commitment and passion to making the best fruit still remains very high,” he said.
Joe Nicholson Jr., the company’s second-generation owner and Brian Nicholson’s father, will continue to run the orchards.
“Growing great tasting fruit that wows customers is what’s driven us for the past 45 years,” said Joe Nicholson. “I love that, and I’m still doing it. What could be better?”
Mark Nicholson, continues as a Red Jacket owner, but lives in Washington, D.C., where he works on food-policy issues, said his brother Brian.