At a Glance
Number of employees: 90+
Operation: Buy, sell, distribute,
and broker a wide range of organic fruits and
vegetables. About 25 percent of what they handle
is regional; 95 percent is certified organic.
1800B Prairie Rd
Eugene, OR 97402
27, 2005: The world headquarters of Organically Grown
Company—with some 90 employees and $20 million in annual
sales—is little more than a few cramped rooms squeezed
between the loading docks and the cold rooms in an anonymous-looking
warehouse complex on the outskirts of Eugene, Oregon. In the
marketing office, a dozen staff people work telephones and computer
screens at desks ranged around the walls. Low windows at the
front of the room give a view of the parking lot; at the back
of the room, invoices are conveyed to the packing room floor
via a sliding window, a clipboard, and a length of string.
His knee in a stabilizer from a basketball injury, OGC marketing
director David Lively pushes back from one of the desks and
then escorts us, hobbling, into a tiny conference room. On
the walls are a 1938 Department of Ag soil associations map
of the United States, produce availability charts for the
Pacific Northwest and a collection of OGC wall calendars stretching
back to the early 1980s. Lively—who has been with the
company from the beginning, after a short career participating
in a cooperative farming effort with his brother, Tom, and
others—leans back and recounts the history of OGC with
a mixture of intensity, ingenuity and informality that seems
endemic to the business as a whole.
Organically Grown was originally formed in 1978 as a non-profit
co-op for organic farmers looking to pool purchases of inputs
and supplies and share information, Lively explains. But within
a few years it morphed into a producers' co-op, one which
sought to move away from a system in which organic farmers
were forced to “beat the hell out of each other in the
market” and toward a system based on collaboration and
information sharing. "It’s no fun calling a store
and talking them out of buying from your friend to buy from
you," says Lively. "It’s no fun, and it’s
not worth it.”
||Within a few years [Organicaly Grown]
morphed into a producers' co-op, one which sought to move
away from a system in which organic farmers were forced
to “beat the hell out of each other in the market”.
In the early years, Lively continues, "a lot of what
we struggled with were trust issues" related to the principles
of co-operative marketing. On top of that were infrastructure
and capitalization challenges. “It damn near died away
in the early ’80s,” Lively recalls. “Distribution
was a huge issue back then—getting from point A to point
B and keeping [the produce] cold.” A lifeline appeared
when two other Eugene-area retail co-ops folded and the remaining
assets were used to set up a micro-lending organization called
the West End Fund, which made capital available to eligible
applicants at very low interest rates.
With a few small grants, OGC established a centralized distribution
center, invested in post-harvest equipment like coolers and
refrigerated trucks, and developed an informal network of
farmers and retailers. From the mid-'80s on, the number of
growers expanded and the retail service area spread up and
down the West Coast from San Francisco to Seattle and inland
as far as Bend. Today, OGC offers a full-service brokerage,
covers the territory from Ashland to Seattle in their own
trucks, and contracts with other companies for distribution
to more distant points. Although the main office is in Eugene,
their biggest loading dock is in Portland, where two-thirds
of the company's business takes place. They also maintain
satellite offices in Central Point and in Kent, Washington.
Balancing local, regional, and beyond
To get this far, clearly, OGC has had to continually balance
realism and idealism while adapting to a rapidly changing
organic scene. Lively and his farmer colleagues realized at
an early stage in OGC's evolution, for instance, that if they
wanted to survive they needed to be operating 12 months a
year. If you shut down in the off-season, Lively explains,
your relationships with your retailers go stale and then when
the season arrives, you're way behind. Gradually, they started
adding pineapples from Hawaii, off-season tomatoes from California,
mushrooms from Connecticut—"anything to keep the
doors open," as Lively puts it—all of it certified
organic, but sourced from across the country and even around
If you shut down in the
off-season, Lively explains, your relationships with your
retailers go stale and then when the season arrives, you're
way behind. Gradually, they started adding non-regional
organic produce. "Anything to keep the doors open,"
as Lively puts it.
Similarly, OGC had to make an early call with respect to
the certification issue. When the first organic certification
programs appeared in the late 1980s and early 1990s—the
Washington state Department of Ag's program was among the
earliest in the country—OGC passed a bylaw requiring
all its members to get certified. “Once you were competing
against people using certification as a tool, everybody had
to fall in line,” Lively recalls. OGC representatives
also formed part of the Alliance of Organic Certifiers, a
regional group that in the late '80s met to hammer out reciprocity
agreements among certification programs in California, Oregon,
and Washington long before creation of the National Organic
Program enforced interstate harmonization.
Organically Grown's expansion necessitated a change of legal
identity, from producers' co-operative to S-corporation, since
federal law prohibits producers' co-ops from handling more
non-members' produce than members' produce. (The name was
changed from Organically Grown Co-op to Organically Grown
Company to reflect the shift.) "We continue to look at
other models, other examples of production-marketing hybrids,"
Lively comments. "One example is an Alaskan group of
fishermen and cannery workers." Employees, as well as
farmers, can now be approved to purchase shares in the company.
But OGC's background as a growers' group continues to guide
their way of doing business. “I think our instincts
are the same as they were when we were growers," reflects
Lively. The bottom-line question for OGC is the same as it
is for individual organic farmers: Where’s your market?
Just as important, their principles have remained the same:
“We wanted to be able to access growers where we were
selling, and we wanted to push organic in the Northwest,"
Lively says. “Those are the two big issues.” “It’s
a really broad mission and it’s always been a mission-from-God-type
deal in terms of promoting [regional organic produce]".
As a way of distinguishing their locally grown organic produce
from organic produce coming in from farther afield, OGC launched
their Ladybug brand in the early 1990s. Originally promoted
as "Oregon's Own" produce, the Ladybug label now
graces fruits and vegetables from 29 organic farms in Oregon,
four in Washington, and one in British Columbia. (The tagline
has been broadened to "The Northwest's Finest Organically
Grown.") Every packing label is also stamped with the
name of the farm of origin of the produce inside. (For
a New Farm story about one of OGC's Ladybug farms, Groundwork
Organic in Junction City, OR, click here.)
“It’s a really broad mission and
it’s always been a mission-from-God-type
deal in terms of promoting [regional organic
Today, Ladybug produce accounts about 25 percent of the total
product OGC handles. That may not sound like a lot, but by
the standards of your average produce broker or distributor,
it's huge, and represents an extraordinary commitment to supporting
"the local deal." Organically Grown backs up the
Ladybug brand with a well-crafted publicity effort, exhaustive
communication with retailers and high-quality consumer education
materials. “Our focus is we’re going to be a full-blown
wholesaler but we really want to develop the local deal big
time,” Lively explains. “The whole brand has always
had a local component.”
Some of their best local crops for regional distribution
include rhubarb, blueberries, raspberries, cranberries, winter
squash, and parsnips. With items like these, Lively says,
the reality is that "you can get better money putting
them on the road than you can locally," especially at
certain times of year.
From co-op to co-ops
OGC’s diverse account base now includes everything
from small neighborhood natural foods stores to the locally-owned
and –operated New Seasons Markets in Portland to 'multi-department'
Fred Meyer stores (a division of retail supermarket giant
Kroger Company). While some retailers have been strongly supportive
of OGC's mission over the years, according to Lively, others
have not and a few have actively tried to subvert what they're
doing. Still, part of what Lively refers to as the "the
mission-from-God level" is to "deal with as many
vendors as we can."
Their biggest single account is PCC Natural Markets in Seattle—aka
Puget Consumers Co-op, the largest consumer-owned natural
foods co-op in the United States, with seven stores and 40,000
members. Lively readily acknowledges that the growth and development
of OGC is intimately linked to the Pacific Northwest's strong
consumer food co-op presence.
“We’ve been real fortunate in that retail co-ops
have not only survived but thrived” he says. “There
are 13 food co-ops with 21 stores in the Northwest, and we
deal with 11 of them.” This amounts to between a third
and half of OGC's total business. Lively rattles off bits
and pieces of the complex regional history of food co-ops
like they were members of his own extended family. What was
once a community food store in Ashland joined the co-operative
ranks two years ago. In Eugene, the existence of good independent
natural foods stores has made the formation of a food co-op
unnecessary. The aggressive expansion strategies of Whole
Foods and Wild Oats has threatened the co-op landscape, Lively
says, but for the most part shoppers have remained loyal to
their locally owned stores.
Growing growers, carefully
Despite OGC's success and its good relationships with regional
organic growers, Lively, and OGC’s buyer Kurt Jacobs,
are no Pollyannas when talking to farmers about growing for
the wholesale market. Most OGC growers also sell at farmers'
markets or through CSAs, Lively notes, and that mix of wholesale
and direct marketing is crucial. "It works for these
guys if they’ve got some diversity and they do some
wholesale for us," he says, but wholesaling is by no
means a complete marketing strategy for small or even medium-scale
A mix of wholesale and
direct marketing is crucial. "It works for these guys
if they’ve got some diversity and they do some wholesale
for us," he says, but wholesaling is by no means a
complete marketing strategy for small or even medium-scale
Likewise, although OGC is ready and willing to add to their
stable of regional growers, they are not actively recruiting.
Lively and Jacobs occasionally receive calls from conventional
growers interested in getting into organics, or from mixed
organic/conventional farms that so far have been selling into
the organic processing market—growing cucumbers for
Cascadian Farm organic pickles, for instance—and are
considering doing fresh. "If they call us we're ready
to talk to them," Lively says; but he knows from experience
how challenging it is, and he's not going to push anyone into
Lively's cautionary approach to grower recruitment also reflects
the fact that organic farming in the Pacific Northwest is
well into its second generation, with a significant number
of established, experienced organic producers. In the old
days, OGC did quite a bit of consulting with growers on basics
such as pest management and soil health. “That was one
of the hard things for us in the early years," recalls
Lively; ”growers weren’t giving us the crops they
said they were going to give us, so we thought it would behoove
us to help them out.” Nowadays, though, “growers
have gotten to the point that they’re pretty good at
what they’re doing." Even better, "the first
generation organic growers have spawned new farms and new
farmers"—places like Persephone Farm in Lebanon,
Ore., Gathering Together Farm in Philomath, and Spring Hill
Farm in North Albany.
“Growers have gotten
to the point that they’re pretty good at what they’re
doing." Even better, "the first generation organic
growers have spawned new farms and new farmers."
Still, OGC works closely with their existing farmers, developing
crop plans and production estimates, addressing consistency
issues, sharing information about varieties, and organizing
production pools on high-value, high-demand items like blueberries.
A final testament to OGC's dedication to its local growers
is that at the end of each year they sit down with each farmer
individually to assess returns and make plans for the following
season. “We have enough comprehension [to know] that
if a grower is not making it, nobody’s gonna,"
Lively emphasizes. "That's the key to the regional deal,"
he goes on. "You have to establish relationships; you
have to get on the phone and get talking."
Looking ahead, Lively says OGC is open to diversifying into
products beyond fruits and vegetables: They already distribute
Café Mam coffee; the day New Farm visited, Lively was
headed into a meeting with a raw milk producer from California.
They're also starting to look at expanding their brokerage
(but not distribution) activities to the national level.
In terms of their regional mission, Lively hopes to see more
local growers implementing season extension techniques so
that OGC's Ladybug brand can maintain a wider variety of products
year-round. “I think over time we’d like to get
to where we’re 12 months [a year with locally grown
product], if we can figure out the crops to do it,”
he says. Already, he points out, improvements in hoophouse
design and other technologies are making diverse, year-round
local production more feasible.
||"We try to do local when we can,
and if we can’t we reach outside of it."
On the other hand, Lively makes no apologies for OGC's participation
in the international organic produce trade. Five years ago,
he recalls, he attended a big meeting of growers, distributors,
and ag consultants in San José del Cabo, in Baja California,
and was hugely impressed by the positive impact international
organic markets can have on local communities. "You gotta
be aware of who you're dealing with," he cautions, particularly
with regard to social responsibility and fair trade issues.
“I think it was a huge mistake for the organic rule
in the U.S. to blow off fair trade," Lively laments.
"How can you leave the human equation out of [the idea
of sustainability]?" But with that said, he argues, there's
no reason not to support the expansion of sustainable ag in
Ultimately, Lively regards the whole set of questions about
scale, efficiency, and sustainability as unresolved and unresolveable—and
rightly so. "The world is more complex than that—I
thought that's what we figured out back in the '60s,"
he jokes. "What's most efficient? There's more to it
than the size of your tractor, or NPK levels." Every
distribution model has its drawbacks, he notes. "A hundred
people driving out to a CSA to pick up a bag of food each—how
much sense does that make?"
"We try to do local when we can, and if we can’t
we reach outside of it," Lively concludes. Overall, that
attitude has sustained a business model that is both successful
in its own right and beneficial for the organic farmers and
consumers of the Pacific Northwest.