Billionaires Stewart and Lynda Resnick, founders of Wonderful Company
The Wonderful Company
A rare peek inside their agricultural empire shows how Stewart and Lynda Resnick are going all-in on the innovative citrus fruit.
By Chloe Sorvino, Forbes Staff
On a sunny 58-degree day in Delano, California, Zak Laffite walks through groves of trees where he grows a special kind of lemon, and then stops to explain how harvest works. “What we want is the tree to justify how much fruit comes off,” Laffite says. “We don’t want it all to come off at the same time. We basically say, just give me a little bit.”Laffite picks off a lemon. He quickly takes a knife from his pocket and slices open the fruit to reveal the inside: no seeds, with a thin white rim around the edge and a light yellow rind. “We’ll come in here and if the fruit’s this size, it’s ready to come off. If it’s colored up, we’ll get it as well,” Laffite says. That first pick will leave two-thirds of the lemons still on the trees. More lemons are picked off in a couple weeks. Then there’s a third round.
“If you do that across so many properties, what you’re doing is you’re basically laying out a very steady supply curve,” Laffite says, before breaking out in a smile. “It’s really about redefining the lemons category.”
These seedless lemons are the latest novelty to hit the grocery store’s citrus section — one that America’s wealthiest farmers are betting will turn the industry on its head. The Wonderful Company, co-owned by husband-and-wife duo Stewart and Lynda Resnick, expects to sell 60 million pounds of the lemons this year. In 15 years, they want their exclusively licensed, seedless version to control 25% of the U.S. fresh lemon market, which would translate to 400 million pounds worth $370 million. Today, the industry is dominated by Sunkist’s estimated 50% share.
Wonderful has shaken up the citrus industry with a little marketing before. Back in the 1990s and early 2000s, they sold mandarins with business partners under the brand Cuties; then on their own they marketed the small, seedless fruit rebranded as Halos. What started out as a land play to hedge against inflation in 1978 has transformed into one of America’s largest private farming companies. Wonderful has swelled to $5 billion in annual sales. It’s grown from an equal combination of Stewart’s foresight to invest in Central Valley land and discipline running highly profitable farms over four decades, just as much as Lynda’s marketing gift. Half of American households have purchased one of Wonderful’s products.
That kind of popularity turned the Resnicks into billionaires, worth an estimated $5.3 billion each, and has secured Lynda a spot among the richest self-made women in America. Their wealth comes from pistachios, almonds, Fiji Water, the pomegranate juice Pom Wonderful, wine, as well as fruit like seedless lemons. But citrus is their oldest farming line — the first acres they bought had citrus and some almond trees — and citrus remains one of Wonderful’s biggest divisions.
A fresh-cut Wonderful seedless lemon, still in the grove
Chloe Sorvino
The Resnicks are throwing all they’ve got into making seedless lemons stick. That’s partly out of business necessity. Their citrus business is now one of the biggest in the world, and has its own 750,000-square-foot packing plant in Delano, located near the groves. The citrus business was built on using the popularity of their mandarins to sell grocers and distributors on also buying the rest of their citrus offerings, including navel oranges, grapefruits, lemons and limes. But as Wonderful pioneered the mandarin market, the hot sector got commoditized. Wonderful controls 30% of the mandarin market, as competitors have taken back around 20% over the past decade. Wonderful hopes that by taking market share from Sunkist lemons, the company’s citrus business will stay strong.
Says Laffite, the president of Wonderful Citrus: “I want my grandchildren to tell me, ‘Grandpa, isn’t it true that they had seeds in these lemons?’ And I’ll respond, ‘Yep. Let me tell you a little story.’”
The Resnicks’ history with seedless lemons starts 12 years ago, around the same time that Wonderful’s mandarin Halos were launched in stores. It was nearly two decades into the Resnick’s farming businesses. That’s when the couple bought the exclusive U.S. license to two different varieties of seedless lemons, acquired from an intellectual property company that represented both growers. One came from a farm in Australia, the other from South Africa. Both used years of natural selection to find a naturally seedless strain, and do not employ GMOs to rid the fruit of seeds.
Back in California, Wonderful’s citrus department went to work. They started testing out trees in the Central Valley’s soil, and later planted more on the Resnicks’ farms in Mexico and Argentina. They were meticulous about the process.
“Peak demand for lemons is higher in the summertime than it is for the winter,” Laffite says. “We’ve taken in all those factors. We really built out a demand curve and said, if from a volume and timing perspective it had to be this way, how would you overlay all of these growing areas? So that’s how we planted.”
The Resnicks have the acreage to make this kind of long-term investment, though a warming planet and water scarcity are expected to threaten lemon trees. The entire U.S. citrus industry is on just 638,000 acres. The Resnicks farm more than 30,000 of those acres, mainly in California but also in Texas. In all, the Resnicks own 155,000 farmland acres, with nearly 125,000 planted in California alone.
Wonderful also has the production space for seedless lemons. Its citrus packing plant in Delano currently runs 6 million pounds of mandarins a day. Some seedless lemons are already on the line, but the plant is still at two-thirds of its total daily capacity. So the facility, which opened 11 years ago, has room for more seedless lemons.
“I want my grandchildren to tell me, ‘Grandpa, isn’t it true that they had seeds in these lemons?’ And I’ll respond, ‘Yep. Let me tell you a little story.’”
Seedless is what the consumer wants, Laffite says. That’s why competitors are already trying to breed their own versions. Sunkist has a seedless variety on the market that still has a few seeds inside. For years, other breeding work has been happening across the industry, trying to crack the code. “It’s a big company,” Tracy Kahn says about Wonderful. Khan, the principal museum scientist of the Givaudan Citrus Variety Collection at the University of California-Riverside, which was originally founded as the Citrus Experimentation Station, has been working for nearly a decade with researchers to breed a seedless lemon, and they’re getting closer. A new set of selections are in field trials. “It’s like looking for a needle in a haystack,” Khan says. “But they have the money to buy what they want from various different places. Having exclusivity is what a company would want to get a market going.”
Adds Kahn, “But a lot of what marketing is now is telling a story that appeals to the public.”
So far, no competitors’ products are completely seedless, even if they’re marketed that way.
Wonderful’s exclusive licenses have a 12-year head-start on their competitors, and development is at least a decade-long process. It takes three years before the trees bear fruit and five years until the trees are mature.
Wonderful’s seedless lemons that matured in time for the 2020 debut sold 91,000 cases in that first year.
Shoppers will decide if not having to stick a finger in their cocktail to retrieve a rogue lemon seed is worth a higher price. The firm’s internal research points to a strong customer base among young families that are health-minded and, no surprise, higher income. Distribution is strongest in California, the Midwest and Texas.
Wonderful’s aim to control 25% of the U.S. lemon market would require growing on at least 15,000 acres in California and Mexico. Should that seedless dream become a reality, other crops that Wonderful currently sells will be less prioritized.
The seedless lemons are already planted on 7,500 acres — 4,200 acres of the Resnicks’ farms in California’s Central Valley and another 3,300 in Mexico and other areas. Wonderful expects production to grow about 280% in the next five years. Back in the lemon grove, branches grazing his arms, Laffite says, “We’re in step three of seven.”
He adds: “This is now the time where we have volume to experiment. This is where the magic really begins.”
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Source: https://www.forbes.com/sites/chloesorvino/2023/03/23/seedless-lemons-are-the-next-big-bet-from-the-billionaires-behind-halos-pom-wonderful-and-fiji-water/