You could say that Harold McClarty has grapes running through his veins. Table grapes, that is, not the wine type. Back in 1887, his great grandfather purchased the land where McClarty later grew up and, exactly a century later, founded HMC Farms.
Today, the Kingsburg, California-headquartered company has grown from the original 40 acres to one of the largest grower-shipper-packers of tree fruit and table grapes in the world, with growing locations across California and Chile. HMC is perhaps best known for its Lunch Bunch grapes, value-added pre-portioned grapes that have found success for decades in school foodservice.
While this is the first time McClarty is mentioned by name on the Perishable Pundit, his namesake HMC Farms has been featured here as well as sister publication PRODUCE BUSINESS. Many also know McClarty for his industry leadership roles, including as former chairman of the California Fresh Fruit Association, an elected Table Grape commissioner, and his service on the Board of Directors for the California Tree Fruit Agreement.
Carol Bareuther, RD, writer for the Perishable Pundit’s (PP) sister publication, PRODUCE BUSINESS, recently talked with McClarty (HM) about his views and insights he’ll share at this week’s Global Grape Summit.
PP: Much has changed in the last century and even since you founded HMC Farms. What does it take to be successful in an industry like grapes for so long?
HM: It’s innovation. I started with 40 acres and $5000, and back then we tried anything and everything. We never rested on what we did yesterday. We always felt we could do something to improve on it the following year. When I bought the Lunch Bunch, the stemmed program had been tried and wasn’t successful. We weren’t afraid of failure. Instead, we resurrected it, figured out what we could change and today it is very successful.
Another point to success is realizing that every day is a battle to get the job done. It takes discipline. There are new or different problems every day and every season. I’ve been in the business for almost 50 years and no two seasons have ever been alike or the same. For example, labor was an issue last year, and we didn’t know it would be.
This year, labor isn’t an issue. This year, it’s rain. We had rain last week, and we don’t know how some varieties will react to it. So, yesterday’s answers are not for today’s questions.
Yet another thing we do is reinvest everything we make each year back into the operation. That’s the motivation for making money. We reinvest in areas like finance, technology, seeking out new and better varieties, changing and improving cultural practices, and securing programs that will smooth out the rough spots and generate what we feel is going to be the future.
PP: What’s the trick to running the day-to-day of your business, while keeping up with changes in the industry?
HM: I think it is creating some of the changes. I’ll give you an example: This is a family business and my two children and their spouses are all involved in it. My son-in-law was an engineer out of the Bay Area. I thought he’d be perfect for the grape operation. So, I told him not to listen to anyone, but to go out there himself and learn how things work. Now, I think he’s probably one of the best grape growers in the Valley.
He’s very innovative because he has a background in engineering and he’s willing to listen. Now, we’re getting a lot of people from all over the world coming to see how we do things. After all, we can’t keep doing grapes the same way we’ve done in the past or we won’t be successful. To create change, you’ve got to be nimble and react quickly. You’ve got to have the right people — the best and brightest from field to sales, excited employees who work as a team with the same vision and passion to collectively address problems.
PP: What’s an example of being nimble and reacting quickly?
HM: We had 60 loads of grapes on the water when COVID hit two years ago. How’s that for an example? They were headed to foodservice. Foodservice took a huge hit and schools were closed. Schools are a big one for us. Because these weren’t California grapes, they were from Chile, there was no assistance. So, we had to get creative. We repacked what we could and sold them on the open market. We donated a tremendous amount to the food bank. We’re huge food bank supporters.
We put people on the road and tried to go to places that we felt would still be open. I’m not saying we salvaged the season by any stretch of the imagination. But we learned, we recovered, and we got better.
PP: What are the biggest changes you’ve seen in the grape industry over the past 30 years?
HM: Varietal innovation has absolutely changed this industry. You wouldn’t recognize 130 years ago what we’re doing today as far as selling specific varieties. The Thompsons, plus the Tokays and Emperors, the seeded grapes are what we started with 35 years ago.
Then, there’s the year-round availability. We no longer have a seasonal product. We’ve had offices in Chile for some 20 years now and have learned a lot about different growing techniques. It’s counter-seasonal, so you can learn twice as fast in a year. The competition has made us better.
PP: Where is varietal innovation headed? Will grapes go the way of apples with 30 to 40 varieties each sold by a specific name?
HM: I’d describe it as a revolutionary evolution. In my opinion, grapes are the leader in taste in the produce department. I don’t think grapes will go the way of the apple category. It’s been tried, not received well, and has been confusing to the consumer.
That’s because some varieties are distinguishable enough. You have to have something absolutely different to be able to separate it out and sell it because there’s tremendous competition for shelf space at retail.
As for color, when I first got into the business it was all green grapes, and the flames were just starting. Now, it’s almost reversed. Going forward, I think colors as a buying preference will fade. The association between color and flavor is historic anyway. Just like the blackberry, it’s obsolete. A perfect example is Cotton Candy. Consumers don’t buy Cotton Candy for its color; it’s because of its flavor.
As consumers become better educated, there will be a demand for descriptors for unique flavors and characteristics, and it’s something we’re going to have to do as growers. There has to be a way to remove some of the confusion with all these different varieties.
PP: What are your thoughts on getting these new proprietary varietals into schools? Is this a way to develop tomorrow’s customers for these varietals? Or are selling these varietals into school foodservice not cost-effective?
HM: Introducing good-tasting, crunchy and sweet grapes to kids is a priority, starting with grammar school exposure. We sell millions of those little snack packs to schools every week. It’s not completely a loss leader, but you’re not going to get rich selling to schools. We do it more philosophically. It’s very important to introduce grapes to kids. As for varieties, crunchy and sweet… that’s the criteria. You have to be disciplined about this. We don’t sell old varieties in schools. Kids will tell you whether something is good or not.
I think one of our main jobs as growers is to introduce grapes to a new generation. I once said jokingly that if the day came when I could get kids to trade candy for my grapes, I will have been successful. Well, that happened. We were giving out grapes to kids at a local fair and sure enough, a couple of the kids came running back to me and wanted to give me their candy for more grapes. It’s a day I’ll never forget.
The bulk of the volume will always be out-of-hand and sold through conventional retailers. But there is room for creativity. We have recipes on our website for using grapes as an ingredient in salsa. We also had a call for grapes to use sliced on pizza.
PP: Beyond schools, what are ways you see to increase the use of grapes in foodservice?
HM: From my perspective, you’re never going to get a tremendous amount of volume into foodservice. I think our real job is to continue to put grapes in front of people where you normally wouldn’t expect to see them: Airports, airlines, Disney World, Starbucks, and in schools as snacks. The bulk of the volume will always be out-of-hand and sold through conventional retailers. But there is room for creativity. We have recipes on our website for using grapes as an ingredient in salsa. We also had a call for grapes to use sliced on pizza. It wasn’t a big deal. They only took 4 boxes a week. But the big thing was that it’s something that’s not been done before. That’s where we come in. I’ll go in as a loss-leader just to put grapes out there. Once the customer is hooked and sees the value, then I’ll raise the price. After all, growers still have to make a living.
PP: How can events like the Global Grape Summit, with networking and information shared, ultimately help to increase grape consumption?
HM: The reasons I belong to these organizations, sit on these boards and attend events like this is to be able to have a conversation with a colleague/competitor and use it as an educational process.
As an industry, we need to review where we are, where we are going, and how to get there. This means looking at exciting technological advances, new varieties, and how to protect company secrets, yet at the same time share best practices. Collectively, it’s an opportunity to make the industry better as a whole.
PP: Last question, what is your favorite way to enjoy grapes?
HM: In the vineyard with my grandkids eating them right off the vine. I have a little experimental orchard in my backyard. That’s what they want to do when they come over. There are five of them. They want to go into the vineyard, look at the different ones, pick them, eat them and decide which ones they like best. I have a discriminating group. They’ll tell me this one or that is a little too ‘muscaty’ for them. I’ve got an 8-year-old who’s telling me how to grow grapes. But that’s my fun. I look at them and I see the future.
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What can one say about a man such as this? He has seen a lot, done a lot and approaches the industry with a sense of responsibility.
It is an incredible story and an incredible life, but can this type of life possibly be duplicated in the future?
Unfortunately, those entering the business today are often heavily in debt, paying premium prices for land, investing in planting all the latest varieties and under tremendous pressure to provide returns that will satisfy investors.
As we planned the Global Grape Summit, more than one grower asked me if we would be allowing in due diligence investigators — leaving the distinct impression they would like me to say no.
The industry clearly has two priorities here: To increase sales in foodservice and to use foodservice as a sampling venue to increase sales at retail.
The Pundit used to bid to supply schools, hospitals, prisons and so forth. The problem is that the specification was just a red seedless grape or a white seedless grape, and though, as a family business, we had some pride and wanted to provide good stuff, we were constrained because we couldn’t win the tender if we didn’t use the lowest acceptable grades.
In other words, there were no bonus points given if the requirement was a US Fancy grade apple, and we quoted a Washington Extra Fancy.
So how is the industry going to get its best product and the best flavor profiles before school children?
It is not going to be easy.
Come and learn from experts such as Harold McClarty and help us both strategize how to boost foodservice sales and how to use foodservice sales to build consumer loyalty and boost retail sales.
You can be part of the conversation by signing up for the Global Grape Summit here.
Book a discounted hotel room, right here.
And, of course, if you have any questions just let us know here.
For a century, more and more food is being purchased through the foodservice channel. It will be harder and harder to boost consumption if we can’t make grapes more prominent in that channel.
