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Duarte Nursery Inc.: Quality, Friendship and Service
John Duarte is a fourth-generation California farmer, as well as a second-generation owner of Duarte Nursery Inc. (Duarte). Duarte’s mother and father, Jim and Anita, founded the family business in 1989 after working for nearly two decades in the nursery business. Duarte is 100-percent family-owned, with the stock split between John, his parents and his brother, Jeff.
What began as a small grape vine nursery now employs 1,000 people during peak season, and has diversified to provide a variety of micro-propagated woody plants, serving farmers and gardeners along the West Coast and beyond. The nursery is located just outside Modesto, Calif., and commercially produces almond, cherry, citrus, grape, olive, pistachio, berry, poinsettia and walnut plants. Today Duarte boasts a 10,000-square foot lab and over 200 acres of greenhouses and benches for the plants to flourish.
Seeds of Science
Duarte is the only nursery in the world applying micro-propagation on such a large commercial scale. The process involves selecting tissue from an existing plant in early development and multiplying it genetically. Each plant sample is treated in a sterile, plastic container and can produce hundreds and even thousands of additional plants. The lab is privately funded entirely, and Duarte owns intellectual property rights on many of its processes. “It’s all private research,” explains John. “It is unpublished information and that gives us a huge capability to develop new techniques.”
These highly specialized plants are referred to as “clonal rootstocks,” which offer Duarte a big advantage. “It’s not a genetically modified organism,” explains John. The rootstocks are carbon copies of plants with the best trait, which is more like selective breeding. This type of plant reproduction creates plants that are more pest-resistant, stronger and more prolific. “In the lab, we can grow plants in vitro,” explains John. “We can manipulate our plants more precisely than operations that propagate in soil.”
The nursery is building a presence in a broader market by expanding its customer base. “We’ve greatly expanded our retail product line,” explains John. “Most of our products were for farmers before, but they’re interesting to consumers as well. We’re in Lowe's, Whole Foods, Safeway and Vons. We’re taking our product into new regions.”
The business is still concentrated mainly on the West Coast, where the available plants thrive best. “We have a decorative patio citrus product that will be nationwide in a few years,” says John.
Duarte distributes through a few different avenues, relying heavily on relationships with garden brokers. “We’ve been able to take and develop shipping and point of sale solutions for our products,” explains John. Duarte has developed a rack system, in use with pants that can be stacked two pallets high with 240 fruit trees in one pallet footprint. “It’s solved a lot of logistical problems,” explains John. “In smaller containers we can stack our products and ship them farther.” The Duarte team has decided to invest in packaging for the retail operation, something that is outsourced for products geared toward the farm.
As Duarte expands its line of products and services, John says it has become necessary to expand physically. In 2010, the nursery broke ground on a facility expansion project that is estimated to take five years total. “We’re in the second year of rebuilding,” explains John. “We’re taking out some of our older wooden greenhouses and putting in some additional greenhouse space.” According to John, his loyal customer base and the company’s knack for innovation have been the greatest factors in the business’ success. “Reinvesting revenue is the best way to continue to offer leading services to our clients,” he adds.
John expects the business to double in size over the next few years, although he says there are some challenges that the team will have to work with. “Agriculture is cyclical,” explains John. “If we’re doing well, we’re doing super well. If it slows down, it might just stop. Our diversification helps to keep the business stable.” Duarte is celebrating 25 years in the business in 2014, and John credits the team’s innovative capabilities for the company’s longevity, despite the sometimes volatile nature of the market.
The biggest constraint for Duarte currently stems from environmental factors. “Many of our customers are having difficulty getting land and water to farm,” explains John. Recent droughts have made growing operations exceedingly difficult in the last few years. “There’s lots of land that is adequate as far as space, but doesn’t have a permanent supply of water,” John continues. “The availability of farm labor is shrinking, and these operations require a lot of manpower.”
Duarte will continue to offer a broad variety of products and services with success, which John says is measured not just in margins, but the team’s ability to provide technologically advanced agricultural solutions. John’s experience keeps him optimistic. “When you grow up in a family business, you learn not to let the ups and downs and uncertainties affect the other things too much,” he says. “You learn to keep everything at a constructive level, because you know that there will be a counter-cycle.” Duarte Nursery Inc. has developed a manageable business model, despite the ups and downs, and, as time goes on, the highs of the cycle are getting higher.