The market outlier


0312_Profile_DonKruger_02Few operators make the transition to a farm-direct business. Kruger has.

Share this article!

BY PETER BELAND

0312_Profile_DonKruger_01
Don Kruger at his farm market in Southeast Portland. After years of ups and downs, his farm-direct markets are thriving.
// Photo by Alexandra Shyshkina

Don Kruger paced fretfully but purposefully in his denim shirt and puffy vest, contemplating his next move like a futures trader going over the latest economic indicators. He scanned rows of squash and broccoli one last time at his farm stand in southeast Portland before scuttling off for tea and a pastry at a nearby bakery. “I used to be perfect. Everything was perfect and everything was expensive. But I was losing,” says Kruger about the demise of his high-end produce markets of the 1990s.

Kruger, owner of Kruger’s Farm on Sauvie Island, started as a produce manager at the now-defunct Daily Grind market in southeast Portland in 1984. Two years later he started Holiday Market in Lloyd Center and then co-founded City Market in northwest Portland in 1990 as its produce vendor. “I was on fire, I was on a run,” he says. “Then it started to erode. Zupan’s Market opened up. That hurt. Then the farmers market started to ruin our summers.” By 1996, he lost his lease to Holiday Market and was heading for disaster if he didn’t change something.

In the late 1980s and early 1990s, Kruger did a TV spot for a local news channel called Green Grocer at Noon. On the show, he visited a farm on Sauvie Island. “I thought some day it was something I might want to do,” he recalls. In 1999, Kruger ran into Dennis Grande who was retiring and couldn’t find a buyer for his 75-acre farm. “I’d never farmed before. I had a garden and it wasn’t even that good,” says Kruger of his initial scouting mission. “I walked away from it a dozen times. Ultimately I took the plunge and signed a 10-year lease.”

As Y2K fever swept the country, Kruger wrote in his journal about his desire to grow produce and then sell it in his high-end markets. But when he took on the farm, he got with it a traditional farm management plan geared toward maximum production for the commodities market.

By late 2000, he was broke after losing $150,000 that year. He sold his share in City Market and another market to pay the $100,000 he owed to produce vendors. He went bankrupt in 2002.

 


0312_Profile_DonKruger_03
0312_Profile_DonKruger_04
AT TOP: Kruger’s brand of salad dressings.
ABOVE: Kruger’s markets sell affordable produce, Ghanaian baskets and other goods.
// Photos by Alexandra Shyshkina

Kruger shrank his staff and production and plodded along until 2004 when he got a call from his ex-brother-in-law about a batch of Ghanaian baskets he had acquired from a wholesaler. “I told him to send me 75 and I’ll give it a run,” he says. “They sold out that weekend.” That fall, he bought 8,000 baskets and sold a third by the end of the year. He then went to a North American Farmers’ Direct Marketing Association trade show in Sacramento to set up distribution to farms throughout the country.

Within a year he went from bankruptcy to a solid financial footing. He now sells roughly 40,000 baskets a year nationally, worth $500,000 in gross sales. With the added capital from the basket sales and with a firmer grasp on how to manage his farm, he started allowing weddings on his property.

In 2008 he bought the front 75 acres he had leased and entered into aggressive payback lease agreement for an additional 75 acres on an adjoining property. But Multnomah County said his wedding events violated land-use laws. After two years and $60,000 in legal fees, Kruger lost the case and with it a fourth of his income. Using what money and strained credit he had left, Kruger decided to do what he had wanted to do for nearly a decade. He was going to grow food and sell it in simple, low-overhead markets instead of high-overhead upscale markets. He started an open-air market in St. Johns in June 2010 and secured the lease at open-air produce market Uncle Paul’s in southeast Portland later that year.

Nearly two years later, Kruger’s Farm Markets are filled with affordable produce from Kruger’s old produce connections and his farm, and Ghanaian baskets. The southeast Portland market also has fish and meat from local vendor Flying Fish. He plans to invest $50,000 into the St. Johns Farm Stand to set up food carts, a bakery and a stand for Flying Fish. The 59-year-old Kruger is something of an outlier in the business. Few middle-age operators make the transition from traditional farm production to farm-direct, a transition that requires farmers to understand inventory management and have critical people skills.

“I could have four [markets]” says the unsinkable Kruger, who in the past always believed he was right.

“Whether it’s the right thing for me to do … I’m not sure about that.”

 




Latest from Oregon Business Team