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August 1, 2015

Building a Company from the Ground Up

The building of the Central Valley Project in the early 1960s was the genesis of the current Woolf Farming and Processing firm in Fresno, CA.

Stuart Woolf, CEO and president, and a member of the Western Growers board of directors, said the building of that project and the use of the water came with restrictions for landowners.  After 10 years of receiving that water, large landowners had to break up their holdings into 160 acre parcels.  Jack Woolf, Stuart’s father and the now 98-year-old patriarch of the family farming operation, had been working in the valley for more than three decades as the general business manager for the farm holdings of Russell Giffen, a Westside farming pioneer.  Giffen Inc. had more than 125,000 acres at one point and in 1974 Jack Woolf was able to buy a 160-acre parcel and start his own operation.

 

A Strategic Business Model

As a veteran of San Joaquin Valley farming, Jack Woolf, who was 57 at the time, had some strong ideas as to the business model that he wanted to follow.  He set the company on a course that it has remained true to ever since.  Forty years later, the younger Woolf said Woolf Farming is one of the few original buyers of Giffen’s holdings that has survived the ensuing decades intact.

“My dad wanted to concentrate on crops that were not labor intensive and where California had a competitive advantage,” said Stuart.  “He also wanted to be less dependent on cotton, which seemed to survive on the whims of Congress and the Farm Bill.”

Jack Woolf used processing tomatoes as the key crop for his row crops and planted almonds and pistachios to anchor the permanent crops.  The company has followed that path for 40-plus years.  Today all six of Jack’s children plus all 24 grandchildren own farming operations that are managed by Woolf Farming and Processing.  About half of the acreage is in row crops—revolving around processing tomatoes as the key rotation crop—and the other half are in almonds, pistachios and wine grapes with a few walnut acres.  Most of the acreage is in California’s Westside farming community in the Westlands Water District.

Stuart said the three core crops—processing tomatoes, almonds and pistachios—remain crops in which California has unique conditions that make it the world leader.  He noted that the number of processing tomatoes grown in Fresno County alone top the production in Italy on an annual basis.  “If Fresno County was its own country, it would have more processing tomatoes than any other area in the world except California.”

Processing tomatoes have become a very good crop for California beginning with the advent of mechanical harvesting in the 1960s.  Since then, improved farming techniques and better varieties have propelled the production to unthinkable stratospheres a generation ago.  “In 1974, my dad wrote a business plan estimating that he would get 22 tons to the acre.  He tells me now that he was exaggerating a bit to make the numbers look better.  He was expecting about 20 tons per acre.  Today we get about 60 tons to the acre.”

Drip irrigation has been one of the great yield-building innovations.  Stuart said his dad began using drip well before almost anyone else.

On the row crop side, the company also manages a significant amount of acreage of onions, garlic and grain crops, which are used for rotation purposes.

This year, Woolf said the drought has taken its toll and about half of the row crops under the firm’s management have been fallowed with the water diverted to the permanent crops.

California pistachios and almonds continue to be very bright spots in the permanent crop sector for Golden State agriculture and for Woolf Farming.  Both crops have been on a growth curve for many years and the future looks just as bright.  The Woolf Farming entities also grow a lot of wine grapes, which is another crop where California has a competitive advantage because of soil and climate, and has seen tremendous growth in the last few decades.

 

Stuart Woolf’s Path

Stuart Woolf was about 15 years old and a high school student in San Jose when his father started the company in 1974.  He jokingly says the operation gave him a great summer job picking cotton in 100 degree temperatures on the Westside of the valley and living in relative squalor with some other workers.  “I loved it; we never had to pick up anything off the floor.”

At the time, Woolf figured he was “too smart” to end up in agriculture.  He went to UC Berkeley, where he met his wife, Lisa, and then on to graduate school in business at Boston College.  At the time, leverage buyouts were the rage and many of his grad school buddies envisioned careers in investment banking.  Stuart became computer literate and his father saw that his business background could be a big asset in the family’s ever-growing farming operations.  “My dad encouraged me to come back and helped me set up my own farming operation.  He told me he loved farming and after a while I felt the same way.  It got in my blood.  Now I am like any other farm guy.  I fell in love with the food industry.  It is a great industry.  Every day you get to interact with the guys with shovels all the way up to the presidents of these major businesses.”

Stuart’s move to the top position at Woolf Farming was somewhat evolutionary.  He and his older brother, John, were working on the farm management side of the business about the time his father was relinquishing the top position.  “But John wanted to be out on the farm.  He stepped down and recommended that I run it.  My dad wasn’t ever put in the position of having to choose one son over another.”

Each of Jack Woolf’s other five offspring have their own farming entities and are on the board of Woolf Farming and Processing.  The company continues to strive for vertical integration, which it has achieved in both processing tomatoes and almonds with processing facilities as well as farming operations.  “We are looking to move in that direction with pistachios as well,” Stuart said.

 

The Future

While many of the third generations of Woolfs are in the business and Stuart makes no bones about the fact that his last name was instrumental in achieving the top spot, moving forward the company has a policy of picking the best person for the job…not the best Woolf for the job.  The board includes four non-family members and Stuart said “we are committed to hiring the best person in each role.  We have a non-nepotism policy.”

But a nephew is in-house counsel and many of the third generation are working in one entity or another.  The Woolfs are strong believers of going outside of the business to get experience.  In fact, on Stuart’s resume in his early 20s is a stint at Fresh Express in the 1980s where he worked for Bruce Taylor, and had a front row seat during the beginning of the value-added revolution in the fresh vegetable industry.

Stuart said he is “cautiously optimistic” about the future of farming in California.  The company has built its model around the state’s unique farming advantages, which he believes are too great to ignore.  While he notes the pendulum has swung to a very anti-farming position at the current time, he is hoping for a swing back in the near future.  He believes the state’s advantages in the agricultural realm are just too great to ignore, and, at some point, the powers-to-be will see it the same way.

While he absolutely loves the Westside, which he calls “beautiful”, Woolf said there is not a clamor for urbanization in that area and it should remain a viable ag option for generations to come.  He said the state has enough water, it is just a matter of how it is managed.  “Farming has taken a disproportionate share of the water woes.  We have a global competitive advantage.  All you have to do is add water to make it flourish.”

He believes the time is coming when the state’s farming potential is embraced and allowed to flourish.  In fact, he believes the drought is helping to turn the tide in agriculture’s favor.  As more and more people are forced to conserve and cut back on their water use, Woolf sees a greater understanding of the need for increased supplies and what that water can do.

 

On a Personal Note

Stuart and his wife of 30-plus years have five kids ranging in age from 18 to 28, with four sons and a daughter.  His oldest, Coulter, is involved in the processing tomato business, while son number two, Morgan, works in Nicaragua in the coffee business.  Jack is involved in almond orchard development.  His daughter Haley recently graduated from the University of Colorado and is living in Santa Barbara, while his youngest, Wiley, will be a senior in high school this year in Fresno.

For fun, he said the family has “a couple of cabins in the Sierras.  We enjoy Carpinteria and we love to travel, eat well and enjoy wine.”