10-8-2005
Allyn company takes a healthy bite
out of the natural foods market
By Rodika Tollefson
L-R: The father and son team of Bob and
Ron Sagerson, owners of the Stretch Island Fruit Co.

Drivers passing through Allyn, heading east on State Route 3, may not be aware that the occasional whiff of sweet fruit in the area is the smell of success of a multimillion-dollar company in this rural neighborhood of North Mason County.

But the name — Stretch Island Fruit, Inc. — is a familiar one to those health-conscious natural-foods buyers who need an alternative to sugar-packed snacks with ingredients that require a chemist's degree to pronounce. By comparison, the company's most popular flavor of its fruit leather, strawberry, for example, has five recognizable ingredients: apples, pears, strawberries, natural flavor and lemon juice.

The ingredients may sound too simple for a tasty buy, but these “100 percent fruit,” “100 percent natural,” Kosher-certified snacks have been winning the hearts of consumers since 1976.

What is their secret (besides good taste)? No added sugar, no preservatives, no hydrogenated oils - in times when healthy eating, childhood obesity and diet trends are hot topics, consumers are starting to look past the bright boxes with cartoon characters peddling snacks that may not be as good for them as they try to sound. While Stretch Island Fruit doesn't try to “battle with the big boys,” it offers something other companies don't: nearly 30 years of selling a unique, natural, quality product while maintaining a family-owned business philosophy.

The company, which now employs 85 people working in three shifts and sells products across the country and abroad, had humble beginnings on nearby Stretch Island. Two couples, Ron and Mary Sagerson along with Harry and Mary Branch, got together with the idea of making healthy snacks. Ron Sagerson was especially interested in finding a way to use a certain kind of island-grown grapes. He had tried to make wine, but gave up. “You really have to fight the grape to make wine out of it,” he said.

Sagerson started making fruit leather - named so due to the snack's smooth, leathery feel — at home with a dehydrator, and noticed that the kids “would not leave it alone.” Essentially, the kids were the first testers of the idea, and encouraged by results, the two couples decided to forge ahead. Harry Branch was a born salesman, and Sagerson told him he would figure out how to make anything that Branch would figure out how to sell.

The first “production space” was in the laundry room of Harry Branch's sister, Bonnie.

During the week, the 15-foot by 15-foot room was a place to dry and wrap the snacks; on the weekend, everything was cleared out so she could do her laundry. Soon, Sagerson discovered his idea of using island grapes would not work: To make the snack efficiently, they needed puree concentrate. Making that in-house would have required a significant capital investment, so instead they started purchasing the puree for the company's first flavor: grape-pair.

The Sagersons bought out their partners after one year, moving the production to a large garage near their home. In 1983, the company moved to its current location, which has undergone several expansions. The last expansion, completed recently, doubled the manufacturing facility's size to 25,000 feet.

Sagerson, a chemist by training, said he was good at bootstrapping because he knew “a little bit about many things.” He and Mary started out with one employee, and took care of all the company's functions. Marketing, with Harry Branch gone, proved the most difficult part.

“Mary was a huge part in the growth of the business,” he said. “We were a good team.” Mary, who is fighting muscular sclerosis, is no longer involved with the company. Ron himself is hoping to retire soon, which is why their son, Bob, came on board in 1994. He is now the company CEO while Ron is president.

Bob Sagerson had no intention of joining the family business when he went to college to study economics, and taught high school math after graduating and receiving a teacher's certificate. Yet his parents started looking at an exit strategy, and told him if he had “any inkling” about continuing the family tradition, it was a good time to talk about it. At the time, Bob was soon to be married.

“The notion of continuing the family business was appealing, and the economics of being a teacher and a provider, perhaps sole provider, for a family, was daunting,” Bob said. “It sounded like a good opportunity.” Bob married in August of 1994, and next month he started his new career.

Just like in the early days, marketing remains one of the most challenging aspects of the business. The natural foods industry has grown tremendously and the concept is no longer “counterculture,” as Ron described it as being in the '70s and '80s era. The growing public awareness about healthy choices has increased the interest in products like the Stretch Island Fruit leathers (currently offered in nine original flavors and five organic).

“We fit many eating trends over the years…everything except Atkins (diet),” Bob said. Even so, on a bigger scale they have to compete with mainstream products. Often times, those are megapower companies with savvy, multimillion-dollar advertising campaigns.

Parents who've watched television with their children are unlikely to escape the plea, “Can we get that, please?” after a commercial advertising sugary snacks that make you fly or food bars pretending to be healthy make your eyes pop or your face change colors. It's not easy to compete in an environment where kids are easily stimulated by those types of commercials, especially since the company does not use TV for ads.

“Our main technique is working with events, giving the product away, and telling consumers why they should buy it,” Bob Sagerson said. They also buy ad space in consumer magazines.

When it comes to marketing for kids, “we focus more on the parents and moms who are making the purchases,” he said. “Typically if we can get the kids to try it, they really like it.”

The company's products have also been featured on some television shows and in many magazines and newspapers.

“To take it to the next level… really requires a push mainstream and investing a lot of time and energy in educating your consumers,” Bob said. “You need to do it on a grander scale.”

Some of that push is already occurring, with stores like QFC integrating their healthy foods into the main isles, instead of stocking them in a special section. While that means having to compete with companies that pay high fees for best placement, that move is not necessarily a bad thing, the father and son believe, because when presented side by side with others, their products do well.

Growth, eventually, may bring the business to a new crossroads. The company cannot grow much more due to infrastructure limitations at its site. Ron Sagerson said they made a conscientious decision years ago to keep the business in the country, with its attractive lifestyle. While that brought challenges like having to pay for their own infrastructure or having a more difficult time recruiting for the several company's highly specialized jobs, the idea of having a short commute and a good environment made sense.

Will the company have to move away from its roots? It's perhaps a decision for another time. For now, as Stretch Island Fruit gets ready to celebrate its 30-year anniversary next year, it has demonstrated that an idea can blossom into sweet success through hard work, a vision, and good decisions - even an idea that gets started in an ordinary laundry room.