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From small avocado packing company to global business
After more than 35 years at the helm, West Pak Avocado Co-Founders Galen Newhouse and Randy Shoup have stepped aside and appointed a new CEO, Mario Pacheco, to lead the company moving forward. Newhouse and Shoup are looking to ease off their responsibilities but will remain on the Board of Directors, in order to guide Pacheco and the rest of the team.
Newhouse and Shoup started West Pak Avocado at a time when avocados where almost unheard of. From selling fruit to local distributors from their small pack-house in California, the pair have grown the company into what it is today - a multinational distributor with five distribution centers delivering fruit from California, Mexico and South America to customers in North America, Asia and the Middle East.
"I had no idea back then that the avocado industry would be as prolific as it is today," Newhouse shared. "Prices were very low, and avocados were not common nor was the name. A lot of people considered them a vegetable versus the fruit they are. While working with another company I had met Randy. He was a client working as a buyer. He and I have always enjoyed an excellent friendship. He became good friends with my wife and my children and same thing with me; I was friends with all of the people in his circle. We thought that because we had an excellent relationship and we were very much alike, that we should start our own business."
Randy Shoup (left), and Galen Newhouse (right)
Navigating the early years
As Newhouse noted, back in the '80s, avocados were not the mainstream item they are today. Moreover, they had the additional challenge of being young, both in life and in business, and had to work hard to gain the trust and respect of those already well established in the industry.
"It was hard when we first got started because the growers were in the forties through sixties and we came in as field buyers in our twenties and early thirties," Newhouse shared. "It was difficult to get them to trust us, let alone sell to us."
He added that they were successful in the end and credits integrity, honesty and reliability with that success. "We won them over because we always delivered and did what we promised. We always did what we said we were going to do so, and overall we overcame the issue. But for the first two or three years, it was a serious roadblock. Now things have sort of flip-flopped, and there are a lot of young growers, young people in the produce industry. Now Randy and I are part of the older group. It’s interesting how things change over a period of 30-35 years."
Health benefits helped the rise in avocado popularity
One of the main reasons that avocados rose in popularity was the realization of it health properties. According to Shoup, it had previously been viewed as a "fatty" food, however once researchers designated it as a "healthy fat", demand substantially increased, and thus inspired West Pak to grow into a much larger business than was initially intended.
"Research from the California Avocado Commission (CAC) and the Hass Avocado Board (HAB) was starting to correlate the health benefits of avocados in the ‘90s, which really excited us," Shoup explained. "In previous years, the consensus was that avocados tasted great but were fattening. The LDL or "healthy fat" awareness exploded interest and demand for the fruit as people wanted to eat avocados not just for the fun recipes, but to be healthy.
"To keep up with the demand, we saw the need to explore other growing sources," he continued. "That’s when we opened our facility in Mexico, which was our turning point as a company. It was a fantastic feeling to know that we not only saw the potential of this wonderful fruit but also acted on our gut instinct as demand first started to grow."
Importing avocados a major milestone
Once West Pak began importing, they knew that this was a turning point in their history. The company took the step of importing avocados when California supply had run out one year, and never looked back. It was also at the time when the Chilean avocado industry was taking its first steps into the export market.
"One of the turning points in our journey was in 1989 when we talked about importing Chilean avocados," Shoup recalled. "At the time Chile was very small in the industry, but they were growing. It was a time when we were out of California avocados, so it was out of necessity. To facilitate product, we partnered with four or five companies export-wise. We got it going pretty quickly, but the volume was very light; we're talking maybe a container every other week. It had very modest beginnings, but obviously, it grew, and Chile became a very viable and important part of our business model."
West Pak was also one of the pioneers of the now considerably large Mexican avocado export program. "We also looked to Mexico in the late ‘80s and saw that the market was ready to explode," Shoup added. "Although it was a slow and painstaking process, over the next several years, we helped facilitate importing Mexican avocados into the U.S.
The progression started by allowing a small amount of avocados to be shipped into 13 northern states in the U.S. a few months out of the year. Once the process proved to be successful and the quality of the fruit and its handling to American standards, the restrictions were eased and then eventually lifted. Going into Mexico and spearheading this process proved to be one of the best decisions that we have ever made."
Moving forward and advice for fellow 'produce pioneers'
Both Newhouse and Shoup will not be entirely departing West Pak to enjoy their retirement just yet. They will remain on the Board in order to advise and guide the new CEO and his team to ensure West Pak remains a strong avocado producer, and will light the path to growth in the future.
"This transition has been in the works for years," Newhouse said. "We prepared financially, installed a board of directors with outside directors, and then we set out to find the best possible person for the job. Mario Pacheco was the clear choice, not just because of his background, track record, and 21-years of experience in the produce industry, but because he met a lot of our same values. It was Mario’s ethics and respect for culture and family that sold us. We are extremely pleased with our selection of Mario Pacheco as our CEO and look forward to his stamp throughout the organization."
Newhouse predicts that avocados will continue to grow and opportunities are always around the corner. "We anticipate sustained growth and plan to increase our customer base in North America, Europe, and Asia," he said. "The popularity of this green fruit has gained incredible momentum and is showing no signs of letting up. Per capita consumption of avocados in the U.S. and other key export countries such as Japan, Canada, China, and Korea, as well as throughout Europe, have extensive room to grow, especially when compared to many countries. To keep up with the increasing demand, California, Mexico, Chile, and Peru remain strategically essential to sourcing fruit, as well as other new areas in South America. We’re also expanding across Mexico as seven new states have recently been approved to export avocados to the United States after achieving U.S.D.A. protocol."
Right now, there are many growers, shippers, importers, and distributors of produce items that have not gained the attention that products like avocados have. The West Pak founders' journey should provide inspiration for these 'produce pioneers' that are working hard to introduce and promote new products into the market. Shoup has some advice for them, and it all starts with the basics. "Know your product well, maintain the best possible standards, and treat your growers like family. The true road to success is built upon ethics, attention to detail, and stellar business practices."
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