Sno Pac Foods has stayed independent even as big players took over much of the organic food business

Minneapolis Star Tribune
By Mike Hughlett

CALEDONIA, MINN. — It’s the height of the pea pick, and rivers of emerald green are flowing down the production line at Sno Pac Foods. The peas come fresh from a field about 30 miles away, and they’re headed for the frozen food sections of co-ops and supermarkets across the country.

Oh, and these peas are organically grown. So are the green beans, spinach, carrots, blueberries, cranberries — any of the frozen vegetables and fruits sold by Sno Pac.

In recent years, organic food has become big business, dominated by publicly traded packaged food companies like Golden Valley-based General Mills Inc., a fact that some devoted organic consumers aren’t keen on. But Sno Pac has stuck to its roots: It’s family-owned and based in farm country, something many organic brands can’t claim.

The company was organic long before organic became trendy, eschewing the use of herbicides and pesticides since the 1940s.

While it’s certainly not some quaint farmstead — it counts its revenue in millions of dollars — it’s a business that captures an ethos prized by more hard-core organic consumers. It’s a relatively small company that primarily uses local foods grown on local farms.

What’s not for sale

Representatives from the big players have dangled offers before Sno Pac’s owners: Would they sell? But Pete Gengler, the company’s president, always says no.

“I get calls all the time,” Gengler said. “But I pretty much tell them we’re doing our own thing.”

Sno Pac’s thing is farming, as well as food processing and distributing. It leases or rents about 2,500 acres of farmland, mostly in southern Minnesota and Iowa. It also contracts with farmers who together tend another 1,000 acres. And it buys fruits and vegetables — blueberries from Michigan, cranberries from Wisconsin — which it freezes and sells under its brand.

The company’s primary sales channel is co-ops, and the Sno Pac brand is a staple at such local outlets as the Wedge Community Co-op and Seward Co-op. “We’ve been enamored with them for a long time,” said Elizabeth Archerd, a Wedge manager. Sno Pac also has a foothold in supermarkets, and can be found in the Twin Cities at Kowalski’s Markets.

The Sno Pac brand was created in 1943 by Gengler’s grandfather, Leonard Gengler. He owned farmland around Caledonia, as well as a cold storage warehouse. Leonard started “playing around with freezing fruits and vegetables,” Gengler said, and Sno Pac was born.

As chemical pesticides and herbicides became increasingly popular in the 1940s, Leonard Gengler resisted. “He just didn’t think it was a good idea, so he didn’t go along with it,” Gengler said.

Instead, he adhered to sustainable agriculture principles set out by J.I. Rodale, a Pennsylvania publisher often regarded as the father of organic gardening.

“Organic is a whole way of farming,” said Pete Gengler, who started in the family business as a kid, picking strawberries and scrutinizing pea batches for errant thistles. (A machine does that now.) “You’re doing your best to maintain your soil, to be stewards of the land.”

Pete Gengler’s grandfather was a pioneer, but the organic food market didn’t take off for decades. Interest began to grow in the 1970s, and by the 1990s the federal government was devising standards for exactly what could be considered organically grown.

Over the past decade or so, organics has become a big business. Retail sales of organic foods shot up from $3.6 billion in 1997 to $21.1 billion in 2008, according to a report by the U.S. Department of Agriculture. Sno Pac has participated in the boom: Its annual revenue, while still under $10 million, is about four times what it was a decade ago, Gengler said.

Organic subsidiaries

Organic food has become such a staple that many supermarkets have their own in-house organic brands, such as Supervalu’s “Wild Harvest” label. And “it’s safe to say” that the majority of U.S. organic food sales come from big packaged food companies, said Philip Howard, a Michigan State University food and agriculture professor who’s studied organic industry consolidation.

Kraft Foods, Kellogg, General Mills — all the heavy hitters have been snapping up organic food companies over the past dozen years. General Mills’ organic and natural food segment had $203.4 million in sales last year, and the bulk of that was from the organic market. The company’s Cascadian Farm organic brand is Sno Pac’s biggest branded competitor.

‘Organic ethos’

Big food companies tend not to put their corporate names on their organic brands, as they usually do with their mainstream brands. A box of Cheerios says it’s made by General Mills. A bag of Cascadian Farm frozen vegetables says it’s made by Small Planet Foods, an organic foods company General Mills bought in 1999. It’s now a General Mills subsidiary.

The majority of organic consumers don’t know who owns their favorite brands, and it’s fair to say many don’t care, either, said Laurie Demeritt, president the Hartman Group, a consulting firm.

But Hartman’s research identifies 24 percent of organic consumers as “core” — and they know and care about ownership of the brands they buy, Demeritt said. “The core consumer is much more passionate and intense about everything around organic.”

Historically, organic food enthusiasts have also been big on locally grown foods, as well as small, family-owned farms and food firms. “This very much did start as a value-based movement,” said Mark Kastel of the Cornucopia Institute, a nonprofit organic industry watchdog group.

There is an “organic ethos,” and companies and farmers who embody it have “authenticity,” Kastel said.

Does Sno Pac have it? “By all means, it does,” Kastel said.

Mike Hughlett • 612-673-7003

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