Dan Richey is a believer. He believes in his company’s way of
doing business, and he believes in the industry of which it is a part.
So it’s no surprise that he is optimistic about the future of
Florida citrus – specifically grapefruit.
Richey is chief executive officer of Riverfront Packing Company, an
operation with ties to some of the industry’s most important
pioneers. “My father-in-law, Victor Knight Sr., started the
packing business in 1961,” said Richey. “His father, John
Knight, was a pioneer citrus grower in the Indian River area. He was one
of the largest growers at the time and sat on the first Florida Citrus
Commission in 1935.” Victor Knight later served on the commission,
and Richey continues the tradition today. He has been with Riverfront
Packing since 1981.
From its citrus-growing beginnings, the operation evolved into a
packing company when the Knights saw the need to develop that end of the
business. Riverfront Groves was run as a family operation for 40 seasons
until 2000, when the Knights sold 50 percent of the packinghouse.
“They took the packinghouse, rolled it into a limited liability
corporation and called it Riverfront Packing Company,” said
Richey. “They then sold 50 percent of that to the Scott family of
Fort Pierce, and after my father-in-law died in 2008, they sold the
other half to the Scott family. So now the Knight family is completely
out of the ownership and the Scott family owns 100 percent of Riverfront
Packing Co. I was part of their package deal. I stayed on as president
and CEO.”
THE VERTICAL PLAN
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A vertically integrated company, Riverfront Packing controls
all aspects of the business from growing to marketing.
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In 2000, Richey and his team took a long, hard look at their operations.
Under a traditional business model, packinghouses depended on a group of
small growers to supply them with most of their fruit. With an eye on
the future, the company moved to a vertically-integrated scheme.
“Under the new model, the company would control all aspects of the
business. You own your grove, you own your harvester and packinghouse,
and you get involved in the marketing side of it,” said Richey.
“You’re then able to meet the demands of the importer - in
our business 80 percent of our product is exported – meaning their
food safety and traceability requirements, and so on. Importers can deal
with the grower/owner rather than a salesman who may not be able to
answer all their questions.”
The plant packs 1.8 million cartons of grapefruit from 4,500 acres of
Scott family groves, all of which carry certification by Global GAP, a
measurement of food safety. The packinghouse is Global Gap-certified as
well. Riverfront Packing also markets most of its fruit through Scott
Marketing. The lion’s share of the fruit is the ruby red
variety.
“I make the call to the importer. I don't have to call anybody
else about anything. I can just tell him we're going to pick this much
fruit, we're going to pack it on this day, and we're going to ship it in
this container to that customer in this carton.”
Other packinghouses have been following the vertical trend over the
past decade. They’re either totally vertically integrated in
ownership or have leases on large groves where growers had decided to
stop growing. That seems to be the only way you can succeed in this
business today, said Richey, citing a couple of reasons. “One is
that the market has changed, and a packer relying on a lot of outside
small growers is not what the customers want. Secondly, there aren't a
lot of small growers around that aren’t connected with a
packinghouse in some ownership-type way. Most of the small growers were
in highly desirable land east of I-95. That land was gobbled up by
developers who were offering $30,000 to $50,000 an acre. So it made a
lot of sense for those guys to sell,” he said.
CONTINUED EXPORT CHALLENGES
The onset in recent years of citrus canker and
greening has spurred a multitude of problems. The cost of fighting the
diseases soared, and regulations limited the areas where fresh citrus
could be shipped. “Prior to these diseases, we were spending about
$1,000 per acre to grow good, high-quality grapefruit for the export
market. Now, it's well over $2,200 an acre. Also, those diseases
threaten the longevity of the groves,” Richey said.
In addition, although the ban on shipping fruit to citrus-producing
areas of the United States has been lifted, foreign markets have not
followed suit.
“We have yet to convince our trading partners in Japan and
Europe to accept those new regulations,” Richey said. “Dr.
Tim Gottwald (USDA-ARS) did a wonderful job putting together a group of
scientists who researched whether canker on the fruit could spread the
disease. The conclusion was that fruit was not a vector in spreading the
disease. So that helped open domestic markets, but we have yet to get
Japan and Europe to accept the ruling. We have the science; now we have
to get through the politics. We're hoping we get to see some relief in
Japan soon, and we believe we will eventually succeed in Europe
too.”
TOTAL COMMITMENT AND OPTIMISM
Chosen to receive Florida Grower magazine’sCitrus Achievement
Award in 2007, Richey serves as the industry representative on the
Citrus Health Response Plan,
http://www.doacs.state.fl.us/pi/chrp/index.html), which is made up of
federal, state and industry leaders. CHRP is the model being used to
address greening throughout the country. He’s also offered his
expertise as a member of FFVA’s board of directors, Florida
Citrus Packers, the Indian River Citrus League, and the U.S. Secretary
of Agriculture's Advisory Committee on Fruits and Vegetables.
Besides his own dedication, Richey expects the same level of
commitment from others within his company and the industry.
“I always like to say that this industry has been beaten up,
but I am absolutely confident that it is not only going to survive, it's
going to thrive. It's going to change. It's going to consolidate. But it
will still maintain the critical mass that's necessary to compete in the
world economy,” he said. “Failure is not an option. I do not
tolerate in our operation, nor do I suffer it very well in the
nay-sayers and people who are doomsday-ers. I don't have time for those
folks. That kind of talk is just wasted energy. I strongly believe this
industry is going to survive, and Riverfront Packing is going to be a
leader in the industry from now until I'm long gone.”
