Quarterly Note

Jake Samuel, CEO Sunrise Fresh Dried Fruit

Hello Everyone,

I started to write this out in August and here we are in October! It has been a very busy, long, and full summer for Sunrise Fresh. We made it through another cherry harvest – one of the largest California crops in 10 years, making it one of the most challenging.  As the summer continued Blueberries, Peaches, Pears – and now Apples – have all been harvested and are continued to be in some parts!! Our family also farms and harvests nuts, so we have kept busy harvesting our almonds and now our walnuts. Hope to slow down by Veterans Day!

This year has been a challenge on all fronts, and you’re not a farmer if you don’t complain about the weather. Mother Nature provided ample rain for California this winter, and she conspired to delay harvests of all our crops by about two weeks. This made the big push of harvesting the fresh fruit and processing of fresh to dried a challenge as the peak season came quickly and was a volume I had never seen before. With the delay across all crops, the harvest came in about 20% over estimates, making the marketing and sales for the fresh produce harder than anticipated and pushed our processing ability over capacity.

Now we are well into Fall, and at least things have cooled off a little.   The cooler September helped most crops but has made our almond harvest longer, and other crops begin later than usual. There is a lot of talk around another wet El Nino year, so the push to be done by Halloween is on!

As for the inflationary points, I am cautiously optimistic.  From all that I have been following it looks like there may be a soft landing and there is some hope of leveled interest hikes. One thing is for sure is that the Fed is like the cherry harvest, the only consistent point to be worried about is their inconsistencies. A lot of the inflated pricing we saw a year ago, which had been pandemic-driven increases, have leveled off, and shipping, thankfully, is no longer the crap-game it had become.

Fuel prices are still up in California, as hurricanes and Middle East conflict seem to deter the pricing from going downward. Although pricing bounces around daily for fuel and oil, the costs from our other major suppliers have stabilized: fiber (cardboard), plastic and fertilizer.  This makes planning a little easier as we start looking to 2024. Unfortunately, we expect some increases in other areas as labor and insurance costs continue upward. 

Consumer behavior is the unpredictable factor influencing our current economic landscape. Despite the Federal Reserve raising interest rates, consumers still purchased essentials and dine out. Their confidence is essential for business growth. Earlier this year, a wave of caution impacted consumers and major Consumer Packaged Goods companies, alongside large hospitality chains, leading to a slow-down in orders during our peak season. This caution was primarily attributed to anticipation around the Consumer Price Index and the Federal Reserve's decisions on interest rates. However, as the holiday season nears and a semblance of balance emerges between inflation and the Consumer Price Index, we are witnessing an encouraging uptick in orders.

We’ve also managed our first full season with Sunrise Dryers, our facility in Colusa, CA – and it’s been great and challenging to have that capability right at our fingertips.  This is part of our integrating more of our operations to make a more efficient process for our customers and our consumers!   

Jake Samuel