August, 1998

National Fruit closes Michigan, North Carolina plants

In a surprising move, National Fruit Product Company recently announced it was closing its Michigan and North Carolina apple processing plants in a major restructuring of the company.
"We aren't making any money and we had to scale back," said Frank Armstrong III, CEO of National Fruit. "There are a lot of weak sisters out there selling it for less than they can make it. We are getting out while we can."
The Winchester, Virginia-based private company announced the move Friday, August 20 right as apple harvest was getting under way across the country leaving many growers wondering where they will send their fruit that had traditionally been sent to the plants.
Tom Butler, manager of the processing apple growers division of the Michigan Agricultural Cooperative Marketing Association, said he thought Michigan growers could find a home for a lot of the apples.
National Fruit won't be buying any apples from too far outside its Winchester plant area because inventories are high, Armstrong said.
"We will wait and see what we pack, but we are not going to overpack," he said. "When it balances out we will take a look at it and buy apples from wherever we need to."
The Michigan plant employed 160 people during the apple packing season. It will not gear up for this year's apple pack and will be closed by the year end.
The Lincolnton, N.C. plant, which employs 120 people in season will no longer process apple products, but will be kept open with limited operations involving contract packing and non-apple related products for other manufacturers. The plant will continue to employ about 30 people and will gradually be converted into a distribution center.
The Charlotte, N.C. distribution center, which is just south of Lincolnton, will be phased out over the next 18 months. The current warehousing and distribution activities will be transferred to Lincolnton. A management company operates the distribution center and employs 10.
The corporate headquarters staff will be reduced slightly as the manufacturing functions necessary to operate multiple plants will be eliminated and the remaining manufacturing support staff will be incorporated into the staff at the Winchester plant.
The company's main manufacturing plant in Winchester, Vir. employs 600 and will see expanded volume as it absorbs the volume formerly supplied by the outlying plants. The new operating plan for Winchester plant is to run on a year-round schedule with only a limited increase in seasonal employment.
The company plans to take the funds saved by its consolidation of manufacturing to expand it sales and marketing department. Advertising and promotional expenditures will also be increased and the company expects to grow its sales volume significantly over the next few years.
The applesauce business is very competitive right now and not many processors are making money on non-branded product, Butler said. National Fruit and its White House brand tried to expand in the Midwest without much success. The brand is very popular in the East and Butler believes the company will focus on expanding sales there.
The Great Lakes Fruit Growers News