A single plum hangs from a tree — a symbol of what was supposed to be. The entire fruit crop at a farm outside Santiago, Chile, has been destroyed by a winter freeze that is unusual in this part of the world.
We toured around the farm that grows apples, cherries, walnuts, and blueberries. “We have to plan ahead — make early decisions, plant at the right time, and hopefully a good crop will give us a payoff in about 6 years,” remarked Patricio, head of operations.
We teach our students about environmental uncertainty in business, but the impact of climate on productivity can require divine intervention.
The competition is fierce, the outcome unpredictable. Patricio spoke passionately about the business — clearly not for the faint of heart. We visited the export distribution center. It is modern and cutting edge with sophisticated technology. They have the technical capability to sort thousands of cherries by size and color in minutes to establish grades of quality.
70 percent of their product is shipped to China. They have done their cultural homework. “We package the best fruit in red boxes — red symbolizes quality. If you package the same fruit in yellow boxes, the price per pound drops dramatically.” They sell the lowest quality fruit in the local markets. It’s driven by a combination of affordability and strategic choices.
I walked away impressed by the commitment of the leadership to quality, and marvel at how well they handle the uncertainty of the business. Next time you pick up a plum, remember: it took 6 years in the making.
About Hemant Rustogi