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- Welcome back to another episode of "Working Capital".

On today's show, we explore bushels of ways to turn a profit in our rural communities.

Join us for pressing business.

It's all about business on "Working Capital".

(edgy electronic music) Established in 1901, Rees Fruit Farm is the oldest commercial fruit farm in Kansas, and the second oldest business in Jefferson County.

They pride themselves on growing and producing the highest quality fruits in the area but their trademark item is their sweet cider slush.

Rex Rees is the third generation of its family to own and operate the 117 acre farm.

Welcome to "Working Capital", Rex.

- Thank you, thank you.

- So, to me, Rees Fruit Farm is kind of a staple of Topeka, of northeast Kansas.

You know, people have been going there for generations, really, to get their fix of apples.

But really your cider and everything else.

Tell me the history a little bit about your farm and your family and how Rees Fruit Farm came to be.

- Well, my grandfather started the orchard in 1901, basically in the same location we are now.

Half mile in one direction, half mile in another direction, but basically the same location.

That was in 1901.

Back then he grew blackberries, pears and apples.

There was always a need for orchards being close to population bases because at that point in time the consumers could not get fresh fruits and vegetables at their local grocery store.

So as time goes by, my dad got into the grocery store business.

- [Jay] Okay.

- And finally, in about early 50s, he decided to plant his own orchard and to supply the grocery stores.

- Oh, okay.

So kind of getting it on both sides of it, you- - Exactly.

He saw the need for fresh produce in the grocery stores, and so he established where we were located now at the corner of 24 and K-4.

- Do you have any other examples he was going off of?

Like had he been in some other larger metropolis where he'd seen this happening?

Or was he kind of the inventor here in Kansas really?

- Well, we don't get too far off the farm, you know?

If you go back far enough, you see that our relatives that were back in England did some type of produce and fruit raising.

But, you know, back in that timeframe, every homestead had apples.

They produced their own food, you know what I mean?

So this was just bringing the produce to a population base that maybe didn't have room to do that at that point in time.

- Well, with today being able to go to your local grocer and getting all these fruits and vegetables, how do you still maintain your business when it's kind of set up to squeeze you out almost?

- Well, and it is, to be honest with you, it is kind of a dying industry.

I mean, orchards and for that matter, even vegetable farms, were established near population bases to basically serve the customers from the city.

Well, as time goes by, innovations occur, and now we have fresh fruits in the grocery store year round.

They may not be as local.

Most of the time, especially in the winter, the fruits and vegetables aren't even coming from the United States.

But that's just, it adds the convenience to it.

And so how have we survived?

Well, we grow a lot less apples than we used to.

We diversified.

So now we grow 17 different vegetables and 14 different fruits, not in big quantities, just for being in season.

And the idea is that the stuff that we produce will have better flavor, be fresher, be more desirable to the consumer than what they can pick up in the grocery store.

- Have you been approached by any local restaurants or anyone that sources their fruit just from you?

- No, schools, restaurants are always interested.

The real problem with supplying schools and restaurants is that, take tomatoes for example.

We'll have tomatoes, but such a short window that we can supply tomatoes, that it's just more convenient for them to get 'em from a wholesaler that's buying tomatoes.

You know, the wholesaler may buy 'em for a month from the local producer, but the other 11 months they're gonna have to source 'em wherever they can.

So it's kind of a catch-22 because they want to use all the local and the fresh vegetables they can.

The thing that holds it back is, to be honest with you, is usually the price because I have to sell my product higher because I don't do the volume that the bigger producers do.

So they like a nice steady, what am I trying to say?

Source, that's gonna be basically the same price year round and they can depend on it year round.

Whereas a local producer may be able to supply all their needs but in a really short time window.

And then they're gonna have to go back to the source where they're getting 'em the other months.

So it makes it a little difficult to work with them but they are always interested in doing the freshest, the most local they can, so.

- It's time for short break.

When we return, we'll press a few more tips for success out of Rex.

We'll be right back.

You're watching "Working Capital".

(edgy electronic music) Welcome back to "Working Capital".

All right, so we talked about the commercial scale about the business and all.

What are some of the biggest challenges right now running your size of a farm?

- Well, I think I have some of the same issues that every business does.

In the orchard business, labor.

90% of the things we produce are hand harvested, hand sorted, hand sold.

Well, as everybody realizes now, labor is always an issue with high intensity labor businesses.

So labor's always an issue.

You know, and that's just not from the people that are harvesting the products, but you also have to have labor to sell the products, to keep the store open, to turn on the lights, labor's always a real issue.

Is that the most limiting factor?

It's right up there at the top.

You kind of see that is why farmers markets are getting so popular because anybody can go in their backyard and grow some fruits and vegetables and go Saturday morning and sell 'em and feel good that the consumers got a- - A fresh product.

- A healthy fresh product.

- Out of their one bushel they got outta their backyard.

- Yeah, yeah.

They're not gonna make a living off of it, but it's added a little extra income.

So labor is really an issue in our business.

- How does your labor force ramp up when it's time to pick?

I mean, do you have just a normal stable of people?

Do you have volunteers that ever come in?

Because I know some of the wineries have picking days and people will just show up and pick for free.

- I love wineries that have come in and they're gonna feed 'em a meal and they're gonna give 'em a bottle of wine.

And I think that's great, don't get me wrong, I think it's brilliant.

- [Jay] Yeah.

- But that's pretty cheap labor for us if you really look at this because, you know, when you have employees, you have payroll taxes, you have, you know, withholding taxes, you have a lot of responsibilities.

So if you can get volunteers, that is great.

That's a great business sense.

But like I said, it's usually just for a couple weekends in the fall when they're harvesting grapes.

So even wineries that have this volunteer picking crew, they're still gonna have to have employees to tie those grapes up, to net 'em, to plant 'em, to trim 'em.

A lot of other things that go into it.

It's just not the volume of people they need when harvest comes around.

And it's the same with us.

I have about four full-time employees and then when we're harvesting apples, are the biggest labor thing that we harvest, I have had up to 30 to 40 people that I hire on a temporary basis to harvest the apples.

- Wow, okay.

And, really it's, you guys after a while started having to have other products, you started producing other things.

- [Rex] Oh, absolutely.

- Your apple cider, which I think is some of the hands down, it's my favorite.

I mean I've had it since I was little, so I'm a little biased, but apple cider donuts, you know, cider slushies.

- Absolutely.

- So tell me a little bit about how you find certain products you want to carry that really showcase what you've been growing.

- Well, we've always tried to not get too far from the main thing of the fruit and vegetables.

So the, you know, the apple cider is real interesting because up until the 60s, the 70s, the idea was to grow and harvest as many apples as you can, store them and you'll be able to sell 'em because the grocery store will not have apples.

Well that all changed in the 60s and 70s and now the goal is to harvest them and sell 'em as quick as possible because by the time we get into December, January, there's fresh apples coming in from Australia, New Zealand.

So the goal is to get it gone as quick as possible.

Well, what were we gonna do with all these apples?

So you either dump 'em in a ditch or give 'em away or turn 'em into apple cider.

So the apple cider really came about, was something to do with the apples that just weren't number ones.

Over time it's developed into a revenue stream that now we designate apples that we're picking to go straight to cider, where it used to be the only apples that wound up in the cider were the off grade stuff.

- Gotcha.

- So, and you know, and one thing leads to another.

You do apple cider, you might as well put in a slush machine.

My dad actually bought the second slush machine that was ever invented.

Yeah, they were invented here in Topeka.

- Wow.

- The (indistinct) manufacturing.

And that's another whole story.

- Yeah.

- The guy that invented the slush machine saw employees at Dairy Queen with five gallon buckets stirring it, and he said, I can make a machine that'll do that.

So he did that and so dad bought the second one.

And for years dad was on his promotional material drawing a cider outta the slush machine because it had the right amount of sugar and bricks so it would freeze and you wouldn't have to add anything to it.

So it worked out like a champ.

Well of course then if you have slushies then, well, you know, we can do apple flavored donuts and we can do apple flavored ice cream.

One thing just leads to the other.

But it all goes back to being able to draw more people into your business and having something unique, so.

- And I really like your apple cider 'cause it is all your own apples, but it slightly changes flavor profile over the full year, right, depending on what apples you had in season.

So it's always delicious but it, I mean, if you have the store bought brands, it's a little watery.

With this one you feel like, I mean you're drinking apples.

I mean it feels healthier.

I don't know if it is or not, but.

- All cider, apple juice, apple cider starts the same way.

Just crush the apples and you catch the juice.

If you're a national brand, you take that juice and you dehydrate it down to a concentrate and then you ship it off to a bottler who puts water in it so it's consistent all the time.

We can't do that, you know?

I love to have, I have an ideal recipe of the fruit that I want to use in the cider, but that only happens for a little time period 'cause I like a sweet apple and a tart apple.

Well those are only gonna be available in this little time window right in the middle of the fall, and early fall I have mainly tart apples so it's not gonna be as sweet.

At the end of the season I have more sweet apples, so it's gonna be a little on the sweeter side.

So my cider changes in flavor.

Whereas if you get a national brand, it's gonna be consistent all the time.

Good, bad, otherwise it's just a fact, so.

But it all starts the same.

- Well thank you Rex for your insight into this 'cause like I say, it's one of the, if you haven't been there, go out and try at least a cider slush if not pick up a full gallon of cider.

Anything they have out there is delicious.

So we really appreciate you being on the show today, Rex.

- Well thank you.

- It's time for another short break.

When we return, we get lost in the corn.

Stay with us.

You're watching "Working Capital".

(edgy electronic music) Welcome back to "Working Capital".

Every year as fall settles in, families trek to Grantville for a visit to Gary's Berries.

What started off as a berry farm in 1993 has expanded into a full fledged festival for fall and winter.

The experience is anchored by a corn maze, pumpkin patch, hay rack rides, apple cider slushies, and dozens of other activities.

Gary has planted the seeds for generational memories.

Welcome to Working Capital, Gary.

- Thank you.

- So like we said in that little little tease there, you started off as a berry farmer in 1993.

- Yes.

- So tell me about the journey from being a producer to just producing memories.

- Ah, that's a great question.

So in 1993 we thought we'd start out with a berry farm.

I told my grandfather years ago that if I had 25 acres I could make a living raising berries.

So we planted two acres of strawberries, three acres of blackberries, three acres of raspberries, March 23rd, 1993.

That week drilled a well and put up a pump house.

Thought we were doing something.

Little did I know was weeds love them just as much as we love the berries.

So there's a lot of work to it.

And then in 2000 we decided to diversify a little bit, realizing that the fruit side of it wasn't gonna make a living.

But it did allow us to raise the children out there and homeschool 'em and teach them some work ethics.

They learned inventory, they learned going to farmer's markets, sales, everything else.

But with the 2000 we decided to do a corn maze.

Pendletons over in Lawrence had done it.

We thought, well we'll do that.

We called up Brett Herbst outta Utah who started the Maize Company.

And we got in with him and then I said, well hon, we need to raise pumpkins.

You know, that wasn't going over too good either 'cause we hadn't raised anything that was really successful.

And so we negotiated and I prevailed.

We had pumpkins and a corn maze and a green Army tent.

That was it.

No buildings out there at all except for our home.

- So that first year you had a corn maze.

- Yes.

- How many people did you have come through?

- That's a good question.

I think we had a couple thousand people.

- Okay, so let's just jump forward real quick.

This year, how many people came through the fall festival part?

Do you have an estimate?

- Yeah, it's somewhere between 28 and 30,000 people for the fall festival.

- How many weeks is that?

It's just Friday, Saturday, Sunday?

Or is it open during the week?

- No, five weekends.

That's not counting the school groups.

There is about, there's over 2,000 kids.

Janelle has taken on school groups and she really got it going this year.

So we had over 2,000 children come out for school group, school tours.

- Wow.

So as you're growing this, how do you decide what new attraction, what new food to add into the repertoire there?

I mean, where do you get your ideas from?

- Great question.

So we're in with the Maize Organization, there's about 300-odd farms just like ours.

We go around visiting them and we even have a Corn Maize conference.

- [Jay] Wow.

- We're going to San Diego this year.

So that we get a lot of ideas.

I steal a lot of ideas.

As far as the food side of it, I get those ideas from 'em also.

But now US Foods is coming out, bringing their chef to present ideas for us.

Like for Christmas last year we had nothing but sugar and people wanted protein coming out there right after work.

And so now we've got a new item, we don't know what to call it yet, but it's stuffing with mashed potatoes and gravy over it and two big size meatballs that are just, they just really did a great job with it.

- Okay, so I mean you guys are even creating stuff from scratch out there.

- [Gary] Yes.

- (laughs) Okay.

So on the business side of things, how many employees are you working with now and how do you manage seasonal employees?

How do you find people that wanna do this?

Is it people that come year after year to work for you or is it every year you have 70% turnover with that?

- I'd say 50% turnover.

Michael Majors, I'll pick on him a little bit, he probably won't appreciate me doing that, but he threw the hammer for us (indistinct).

He started when he was 14 and is out of college, working full-time, he still comes back.

So that kind of tells you.

We get some of those type of folks they just love it out there.

We get a lot of 14 year olds too and, you know, everybody says, "Well, they don't wanna work."

Well, I disagree with them.

I got 14 years olds that will go above and beyond.

It's probably the key to our business.

Our business is more focused on the employees and making sure that they get taught something new, they get shown values, they become part of our family.

And that's our goal.

- For some of these kids this is their first time.

I know it's not a producing farm anymore, but is it some kids who have never been on the farm and worked that way before?

I mean, 'cause really we're getting to where we're missing farmers coming up.

And to me, I know it's a farm festival, but you get a lot of city kids who get a touch of farm life who may end up being farmers down the road.

- We've had some of that.

We've had some of 'em now in K State, they're going through their horticultural degree to do landscaping and things like that.

It's kind of in that area.

Yeah, so they get a taste of it.

You know, we've had 'em out there to where, you know, 14 years old, they never ran a screw gun.

Well that's just commonplace.

My kids grew up with all that stuff.

Or they may have not or drove a tractor or a skid loader.

I've taught a lot of kids how to drive a pickup.

Don't do that quite so much anymore because there's about 125 of 'em on the farm, so.

(laughs) - It's time for another short break.

When we return, we'll pick some tips from Gary's patch.

We'll be right back, You're watching "Working Capital".

(edgy electronic music) Welcome back to "Working Capital".

All right, so the winter festival is coming up.

I know you will launch that on Black Friday.

- Yes.

- Every year, Black Friday, look forward to it.

- [Gary] Yes.

- Over a million lights.

And you told me this year you bought more pallets of lights, so I know we're getting up bigger there.

Tell me a little bit about the light show going on.

- Well, the light show, it's a great, to me it is just phenomenal.

I never thought, I never could understand why anybody would wanna go see lights until I started seeing 'em lit up out the farm.

So part of it's secular.

You can go in there and you can see different scenes from movies and stuff like that, and there'll be music from them.

You can take pictures with them.

But you go on the back row, it's called The Greatest Gift.

And so it depicts the birth of Christ.

We tell the story of it throughout the back row of the farm, and then you come back around to the side of it and you're gonna see more picture opportunities like wings and the swing.

And we got a 38 foot bumble, that's the abominable snowman, and you can take a picture with him.

And we got stomp pads where you can actually stomp on 'em, they change colors like a lily pad and they are just phenomenal, everybody loves 'em.

- So yeah, probably adults will be pushing kids off so they can get on them, I'm guessing at this point.

- [Gary] Yes, totally.

(laughs) - We talked a little bit before the show about some of the new technology, I mean.

- [Gary] Oh yeah.

- Tell me about the, we're gonna have some magic wands out there.

- Oh yeah, so Chris has come up with an idea, Chris Bloom, he's got a RFD reader he's attaching to our princess wands and our pirate swords, to where if you have one of these, there's about 20 stations.

You go around and touch that station, it'll turn on the lights and the music.

It's phenomenal.

It's technology he created on his own.

- Wow.

So where are you gonna go from here?

I mean, what else can you do for a winter festival?

I mean, I know you probably have some ideas already for next year.

(Gary laughs) I mean, how do you keep improving?

- That's a good question.

But what I have found was that the more I turn over control to others, the more it expands.

I had a business coach tell me, "Gary, you're hindering it.

Get out of the road.

And once you do, you'll see it grow."

And by golly gosh, the last two years it has.

It just, it takes on a whole other dimension.

I've got Chris, or not Chris, but Hope, I call her, well Faith, she works out there and she comes up with ideas, she manages it.

Chris comes up with ideas.

And then my son, he's got his own set of ideas, Michael.

And they just go with it.

Andrina, you know, she manages the farm basically, she's got another set of ideas.

And we go around to different farms and look at this and it's amazing what we come back with.

We go to a Christmas light show in St. Louis every year.

We met a guy there by the name of Shane Dobbs, and he's in Alabama.

He went from haunted house to Christmas light show, and it's just been phenomenal.

Yeah, he's been out the farm as an advisor, and yeah, we steal ideas.

- Yeah, 'cause I mean, with your, the Maize Company, right?

- Yes, yeah.

- Is that where, are you even sharing like, you know, these kind of snacks are working or, you know, we set up this, I mean the jump pads and stuff, is that- - Yes.

- Where you saw those first?

- Yeah, that's where we get the ideas.

The jumping pillows are sold through the Maize Company.

The jump pads, we got that at the light show and the Maize Company got us set up with them.

And so it's about 300 different farms that come together and share ideas right down to numbers, dollars and cents, what works, what doesn't work.

Hey, you know, in Texas, donuts don't work.

In Michigan, it's apple fritters, or they call 'em elephants ears or something like that.

- [Jay] Okay.

- That are better.

But they still sell a lot of donuts there.

- Okay.

So you really have the community body.

I mean, everyone's going out there to make memories.

- [Gary] Yes.

- How do you guys give back to the community?

I know you do a little bit of outreach that way.

- Yeah, we do.

It's through our employees, but last year we were able to give five different organizations in Jefferson County, $5,000 a piece to help feed those that were in need.

We do a lot of that type of thing.

You know, also our employees are our family.

If, you know, you take care of your family first.

Somebody may need tires because they're driving out there on that gravel road and they're blowing tires out three times in one week.

You just don't question it, you take care of people.

- That's been, especially this season, some of the other businesses we've talked to, you know, they've gone with the route where the employees have bought in more, they're more part of the ownership.

So they really do want to make it grow along with you.

So I think that's fantastic.

- [Gary] Yep.

- And you even help some community groups that coming in, like, I think we're talking about Seaman's Band or there's opportunities there for people to kind of help with their own organizations.

- So the Seaman Band tries to raise money every year to go on their trips and we offer 'em volunteering positions to where mom and daughter or mom and dad might, and one of the kids may come in and volunteer.

And then we give them money to their organization, donate it.

They may be cooking turkey legs, they may be serving up hamburgers, but it's a time for them to work together also.

- Which sounds more amazing than, you know, your standard candy bar drives or that kind of door to door.

- [Gary] (laughs) Yeah.

- You're making some memories even before you make your memories on your trip, so.

- But we have all turned to (indistinct) for that also because we find good ones, we invite 'em back to work for us full time.

(laughs) - Well thanks Gary for joining us tonight.

- My pleasure.

- Well, that's a wrap for tonight's show.

I'd like to thank Rex Rees from Rees Fruit Farm, along with Gary Starr, from Gary's Berries for joining us on "Working Capital".

If you know of an interesting business or management technique, we want to hear from you.

So give us a call, drop us an email, or send us a letter.

We look forward to hearing from you.

See you next time, and thanks for watching.

It's all about business and you've been watching "Working Capital".

(edgy electronic music) - [Announcer] Additional funding is provided by The Friends of KTWU.