Fidel Guzman knows his fruits and vegetables.
Owning and running a restaurant and bakery in the 1970s left him wary of the ins and outs of doing business with produce distributors, he said.
After picking up that other restaurateurs also were unhappy with poor quality and inconsistent service, Guzman started Family Tree Produce Inc. of Anaheim in 1975.
Guzman’s company generates around $40 million in yearly sales distributing fruits and vegetables from all over the world to the Disneyland Resort, the University of California, Los Angeles, Benihana restaurants, San Diego’s Qualcomm Stadium, Los Angeles Zoo and Botanical Gardens and
others.
Since Family Tree’s start, it has become one of Orange County’s largest produce distributors, alongside Los Angeles-based Worldwide Produce, Costa Mesa’s Ingardia Brother’s Inc. and L.A. Specialty Produce of Santa Fe Springs, according to Guzman.
Family Tree carries a variety of fruits and vegetables it buys from growers in California, South America and other areas.
It sells everything from star fruit and edible flowers to onions and lettuce. The products are trucked in from the fields or picked up from the Port of Long Beach.
Keeping steady relationships with a large handful of growers allows the company to keep a diverse selection, even when weather affects the supply of a particular fruit or vegetable, said David Figueroa, vice president of operations and development.
“It’s all about having variety,” he said.
A good chunk of the company’s fruit and vegetables also are sold to restaurants, schools and hospitals.
Family Tree faced its share of struggles in the past.
Like many entrepreneurs, Guzman and his family had to learn how to manage costs, recruit workers and stay competitive in an industry that’s flooded with larger and smaller rivals that offer the same service Family Tree does.
Word of mouth and industry connections, built through associations such as Produce Alliance, a trade group for distributors, have helped Family Tree grow, Figueroa said.
The company outgrew three buildings before it settled in its current 38,000-square-foot Anaheim warehouse, which sits on 5 acres of land owned by Guzman.
Inside Family Tree’s headquarters, about 120 workers load packaged produce in the company’s 40 refrigerated trucks and deliver them to customers in Orange, Los Angeles, Riverside, San Bernardino, San Diego, Santa Barbara and Ventura counties.
The company has had its share of offers from developers for the land its operation sits on, Figueroa said. But Guzman doesn’t plan to sell, he said.
Family Tree also has had buyout offers from companies and private equity firms.
The offers are tempting, Figueroa said. But the company isn’t ready to cash out yet, he said.
“A lot of hard work went into getting this business where it is today,” Figueroa said. “I don’t think we’re ready to go that route yet.”
The produce business has its share of challenges, Figueroa said.
The rising cost of insurance, labor and fuel are taking a toll, making it harder for distributors to eke out profits, he said.
A shortage of workers due to a crackdown on illegal immigrants is another issue the industry faces, Figueroa said.
“Immigration reform is affecting a lot
of industries, but it’s hitting the produce
business very hard,” he said.
Family Tree hopes to diversify. The company is eyeing grocery store chains as a potential source of new business, Figueroa said.
Earlier this year, Family Tree struck a pact with an undisclosed convenience store chain to sell its fruit and vegetables at 25 stores.
“We’re testing the waters right now,” Figueroa said. “If it works out, we’ll be able to target larger grocery store chains.”
Family Tree also is looking at government contracts so that it can sell produce to the Navy, Army and others.
New sources of businesses could help Family Tree grow its revenue by 20% next year, Figueroa said.
Another plan could be to create its own brand of produce, Figueroa said.
“We’re planning ahead so that we can stay competitive,” he said.
Labor of Love
Costa Mesa-based Generic Youth LLC is helping Jeff Yokoyama get back to his roots.
The apparel veteran who cofounded and sold clothing brands including Maui & Sons, Pirate Surf and Modern Amusement to big names such as Huntington Beach-based Quiksilver Inc. and Santa Monica’s Mossimo Inc., has a new clothing line under his wing.
It’s generating a buzz.
This time around, Yokoyama said his 2-year-old business isn’t ready to sell.
Well, not yet anyway.
“It’s helping me get back to what I love doing, which is making great clothes the hard way,” Yokoyama said.
Generic Youth makes and sells surf- and art-inspired jeans, shirts, shorts, pants and sweatshirts for men and women.
The company’s niche is basic,casual clothes in bright colors and unusual fabric combinations. Think straight leg jeans with satin belt bands, or flannel shirts and hoodies made out of printed beach towels.
“The line is all about basic pieces with a youthful twist,” Yokoyama said.
The company designs and sells clothes from a 1,800-square-foot building in a nondescript industrial neighborhood off 17th Street and Pomona Avenue in Costa Mesa.
With only two full-time employees and a few part timers here and there, Generic Youth is a far cry from the surf and streetwear lines Yokoyama started over the years.
For Yokoyama, Generic Youth is giving him a chance to start from scratch and relish in the joys and frustrations of owning and operating a small business.
Every few weeks, Yokoyama ventures to the garment district in Los Angeles and buys fabric for his designs. He stops by a local coin laundry and washes the fabric to keep the clothes from shrinking. Yokoyama takes his fabric back to Costa Mesa where he and his seamstress cut and sew prototypes that are then taken to a local sewing factory that specializes in small production runs.
The entire production process is tedious but Yokoyama insisted he loves it.
“It’s a lot of work, but, man, do I enjoy it,” he said. “It brings back memories.”
Eventually Generic Youth will have to tap a factory that can handle all of the necessary production stages, he said.
“I need to look ahead,” Yokoyama said. “If we grow, I won’t be able to do all of that work anymore.”
Yokoyama’s daughter Coco came up with the Generic Youth idea when she decided to make T-shirts one summer day in 2005. Coco’s childhood side profile has become the company’s signature logo.
The cost of rent, utilities, labor and other factors are making it hard for Generic Youth to squeeze out a profit, Yokoyama said.
Rather than raising prices, Yokoyama said he wants to keep his clothes affordable so that its target customer,teens,can buy them.
The company’s clothes sell from $15 to $60.
“If we make a million in revenue, I’m stoked,” Yokoyama said. “If we make $5 million, I’m stoked. We’re not making anything right now, and I’m still stoked.”
Yokoyama’s easygoing attitude could indicate that he’s nowhere near strapped for cash, thanks to his earlier company sales.
He’s really doing this just for fun, he said.
“It’s not about the money. I know that sounds corny but it’s really about having fun,” he said.
Ethanol Ambition
Federal funding is helping BlueFire Ethanol Fuels Inc. in its ethanol energy push.
The year-old Irvine company plans to break ground on its first ethanol plant in Lancaster by the end of this year.
The plant would produce 3.1 million gallons of ethanol per year from landfill waste including wood, straw, grass clippings and corn stover.
BlueFire calls itself the first company to have the technology to produce ethanol from all kinds of landfill waste, according to Chief Executive Arnold Klann.
More production facilities are on the way, Klann said.
Earlier this fall, BlueFire was one of six ethanol companies to receive $40 million in federal funding to build a production facility in Corona, which will be able to produce 17 million gallons of ethanol a year.
This month, the company was chosen along with 15 other companies to participate in a federal loan program worth $200 million to build a third ethanol plant in California that will produce 55 million gallons every year.
Klann projects BlueFire to break ground on its Corona plant in 2008 and on its third production plant in 2009. BlueFire has yet to disclose where its third plant will be. Klann said the company plans to announce the location later this year.
The company, which trades on the low profile Bulletin Board exchange with a market value of about $90 million, has big ambitions. It hopes to generate about $2 billion in revenue and have 20 ethanol plants in production in seven years, producing around 1 billion gallons a year, Klann said.
“This is a viable alternative energy,” Klann said. “People need to know that ethanol energy helps affect our country and its balance of trade and the falling dollar.”
BlueFire wants to move its stock to a bigger exchange, according to Klann. The goal is to be on Nasdaq next year, he said. Earlier this year, it moved from the Pink Sheets exchange.
