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Home / Washington Business - March 2006 / Made in Washington: Orange Juice From an Unlikely Source |
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Made in Washington: Orange Juice From an Unlikely Source |
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Written On: March 2006 |
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Written By: by Daniel Brunell |
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Just outside of Spokane, the snow is crisp. Snowplows work overtime to clear ice-laden roads. In a large building near the airport, 85 people in aprons and hair nets are bottling juice from one of the few fruits that Washington doesn’t grow.
Orange juice? From the frozen tundra of Spokane? Yes! Spokane's Olympic Foods is the only major bottler of chilled orange juice in the Northwest. They provide fresh orange juice and other chilled juice products to major supermarkets chains, local grocery stores, distributors and public entities around the Northwest. Started in 1966 as Olympic Corn Products, they started off making corn dogs. With only so much capacity in the corn dog market, Olympic went looking for another venture to grow the company.
In 1974, Olympic decided to venture into the juice market. The risk proved successful. By 1979, making orange juice constituted about 50 percent of the business. The market continued to grow to where Olympic has had plant expansions in 1986, 1992 and 1999. In 1995, Westfarm Foods acquired a controlling interest in the plant. One year later, Olympic stopped making corn dogs to concentrate exclusively on orange juice and other products.
From the very beginning, Olympic has been dedicated to the city of Spokane. The community has a high standard of living and is easily affordable for hard-working families. Olympic gives back to the community that has proved to be a stable home for so many years. Most of Olympic Food's employees also give back to the community. One of the local programs that Olympic contributes to is Second Harvest. Last year, Olympic gave more than 300,000 pounds of food to Second Harvest and other community organizations.
Spokane also serves as a centralized hub for Olympic Foods. With a customer base that reaches through the 13 western states and four western provinces of Canada, freight mobility is a vital necessity for the company. Located within a mile of Interstate 90, Olympic uses this main artery of the Northwest to receive materials and ship products across the region.
Yet, in late 2005, Olympic faced unprecedented challenges. Even though Hurricanes Wilma and Katrina were thousands of miles away, the effects of these disasters were felt in Spokane. In a matter of days, the economic climate in which Olympic was operating dramatically changed. Hurricane Wilma's aftermath left the quality and quantity of the Florida orange crop in doubt, causing a massive spike in costs for raw oranges.
In response, Olympic looked to different sources such as California, Mexico and Brazil to keep the juice flowing. With the advent of rapid transportation and ever increasing sophistication of the international marketplace, the world orange market has become integrated. Companies like Olympic have merged into this new global competitiveness and bring benefits to consumers such as fruit juices that were once impossible to find because of seasonal constraints and market availability. As Hurricane Wilma showed, this global focus also brings a more robust economic model that can better cope with economic setbacks. However, Hurricane Wilma proved not to be the only challenge for Olympic.
A few weeks later Hurricane Katrina struck, causing a massive spike in already high oil and energy costs. In less than a week, shipping and energy costs skyrocketed. The costs of the resin beads used to make petroleum-based plastic bottles also rose. These compounding factors led to some very nerve-wracking days for Olympic Foods.
"We operate at very tight margins, so even the slightest change in the market affects us a great deal," said Doug Koffinke, president and CEO of Olympic Foods. "We try educating our customers about what the market is doing and how it is affecting their product."
Despite these recent bumps, Olympic processed in excess of 20 million gallons of juice between their two facilities. They were also able to expand. Last year, Olympic Foods opened a new facility in Fontana, Calif. "This helped us achieve several goals," said Koffinke. "First, it expands our customer base into the significant California market. Second, it increases our production capacity to include new products." The new products are portion control juices, juice concentrates and Tetra Brix aseptic juice boxes (think kids' lunch boxes).
With a new facility in California and a highly productive one in Spokane, Olympic Foods has a bright future—as bright as the orange juice that flows from Spokane.
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