2(XVJ 



MAUKETING 



MARKETING 



n-jtioiis. They an? inm-)>rofit ooiporations orpsmizod 

 uiutor I ho laws of California. Stock is issued to each 

 meinlHT in pro]>ortion to his boarinn acrcase, to the 

 nunibor of boxes he ships, or in eqiKil amount to each 

 pn'wor. Tlie nianajjeni.ent is in the hands of a board of 

 directors cht>seii from :unon); the •srowers. A packiuR- 

 house is owikhI or Uwsed and jiroperly equippeti. No 

 profits iire acciunidated nor dividemls declared. 



As the fruit is assembled in the packinsi-house, tlial 

 of each member is ke))t .separated until it is inspected 

 and jiraded, wliich fiives a basis for uiakinj; the returns 

 upon the "pool" system. An association may market. 

 any part of the crop at any time during the picking 

 season they desire and, in some cases, this privilege is 

 extended to the individual members. 



The lenpth of the "pool," whether a week or a month, 

 dejHMids upon the desires of the association. Each 

 association hjis a brantl name for each grade of its fruit, 

 and this name and label is the exclusive property of 

 the iissociation. \\'hen a carload is ready for shipment, 

 it is marketed through the "district exchange" of which 

 the local association is a member. 



The district exchange. — The local exchanges are 

 federated into seventeen district exchanges, which are 

 non-profit coriMrations. There may be one or more in a 

 community, depending upon local conditions. Their 

 function is to act as a clearing-house in marketing the 

 fruit for the local exchanges through the California 

 Fruit-(i rowers' Exchange and to act as a medium 

 througli which most of the business relations between 

 the Exchange and local associations are handled. 



The district exchange officers order the cars from 

 the railroad and see that they are placed at the various 

 local exchange packing-houses. They keep a record of 

 the cars shipped by each local association, with their 

 destination, and receive the money from sales through 

 the head office and turn it over to the local exchanges. 

 Other functions arc to keep the growers informed 

 through the head oihce of all iihases of the citrous 

 marketing business, and place this informatioTi before 

 the local associations, where in turn it is passed on to 

 the growers, and return the proceeds to the associa- 

 tions. 



The central exchange. — The California Fruit-Growers' 

 Exchange is a non-profit corporation formed by the 

 seventeen district exchanges and managed by a board 

 of seventeen directors, one from each district exchange. 

 The hea<lquarters is in Los Angeles. Its function is 

 to furnish marketing facilities for the district exchanges 

 at a pro rata share of the cost. The directors hire a 

 general manager anrl a.ssistants. Bonded sales agents 

 for the principal markets of the United States and 

 Canada are appointed and managed from this office. 

 Telegraphic advice is received every day from these; 

 agents of the sale of each car, together witli information 

 on the conditions and prospects of the market. This 

 jnfonnation is sent daily in a bulletin form to tlu; local 

 as.«ficiations. The business is on a ciush b;isis and 

 prompt accounting returns arc made to the growers 

 through the district exchange. Other functions are the 

 attention to any litigation that may arise in connection 

 with the marketing of fruit, handling all claims, con- 

 ducting an advertising campaign and endeavoring to 

 develop new markets. This work is supported by h^vy- 

 ing an aascs-sment against each district exchange for the 

 pro rata share of the exix;nscs on a basis of the numlier 

 of boxes shipped. In the Exchange, everj- shipi)er 

 reserves the right to regulate and control his own ship- 

 ments, to develop his own brands of fruit, to use his 

 own j<jdginent as t« when anrl in what manner it shall 

 hf; shipped and to what markets it shall be shipped, and 

 the price he is willing to receive; reserving the right 

 of free cyjmpetition with all other shipments inclu<ling 

 the mrrrnV^crs of the same organization. 



Merntership in the Exchange is voluntary. A grower 

 may withdraw from a local association at the end of (he 



year; the local a.s.sociation may withdraw from the 

 district exchange, and the district exchange may w'ith- 

 draw from the central exchange. One-third of the entire 

 shipments are .sold at public auction and the remainder 

 through um-estricted jMivate competition. There is no 

 imiformity in price of the dilTerent brands. 



The lOxchauge is organized in .several divisions: Sales, 

 liCgal, Traliic, .\dvertising, Meld, Insiu'anCe and Mutual 

 Protection, and a Supply Uei)artment wliic^h furnishes 

 materials usetl in packing-houses and groves at cost 

 to members. 



(b) A Canadian organization. 



As the California Fruit-Growers' Exchange is the 

 largest agricultural cooperation for marketing ptirposes 

 in the United States, so the Uniteil Fruit t'ompanies of 

 Nova Scotia is a prominent examjjle of successful 

 cooperation by Canadian ap]jle-growers. This com- 

 pany is located in the famous Annai)olis Valley apple 

 region of Nova Scotia. There arc forty-eight coopera- 

 tive companies in this Valley; forty are federated into a 

 central as.sociation, which is incorporated under the 

 name of the "United Fruit Companies of Nova Scotia, 

 Limited." The membership of the subsidiary compan- 

 ies varies from ten to one hundred twenty, the average 

 being .about forty. Each company owns a warehouse or 

 central packing-house where the fruit must be packed 

 by experts under the direction of the company manager 

 and an insjiector sent from the central ollice, who has 

 the authority to order re])acking, if in his judgment it 

 is necessary. Orchard- or home-packing by the indi- 

 vidual members is not permitted. It is the business 

 of each company manager to become acquainted with 

 each member and with the type and grade of fruit he is 

 growing. Before picking, the man.ager sends to the 

 central office an estimate of the crop of his members and 

 its condition. Pickers may be sent from the central 

 office to assist the local growers. The picking and 

 hauUng is done under the direction of the local company 

 manager. This rule has been found desirable to prevent 

 large quantities of fruit from being delivered at the 

 central packing-house unexpectedly. Fall apples may 

 be hauled to the pacldng-house in unheadcd barrels, a;3 

 they are usually packed at once; but winter apples are 

 delivered in tight barrels. Every barrel has the growers' 

 name marked upon the side and a receipt is given for 

 the quantity and variety delivererl. The deliveries of 

 every day are recorded in a book in which one or more 

 pages are assigned to each member. On the left side 

 are the series of columns, one for each variety, under 

 which is recorded the date and number of barrels 

 delivered. On the right page is a record of how these 

 ai)plcs were graded or "packed out." 



The business of marketing the entire output of all 

 the subsidiary companies is performed from the central 

 office, which is at Berwick. This office maintains and 

 directs an organized force of salesmen. European sales 

 are conducted through the London office and tlie 

 .South American business through the Buenos Ayres 

 office. The apples of all the local companies are pooled 

 and the returns made to all upon the average selUng 

 I)ri(^e of each grade of each variety. 



Some of the advantages to the growers that have 

 been brought about by the cooperation, in addition to 

 b(!tter jirices, are the convenience of an improved type 

 of box-car especially adapted for sliipi)ing apjiles in 

 extremely cold weather, and a shorter shipping time 

 for transatlantic shijiping, and better V)oats. 



(>)Oi)erative buying is an important f\mction of the 

 iussociation. The central office makes large purchases 

 of supplies directly from the manufacturers, thus secur- 

 ing tiu^ lowest price, as all the cost of selling, bad debts 

 and other ex7)(?nses are eliminated. 'I'he supi)lies are 

 shii)ped in'carlots directly to the central packing-houses 

 of the local companies and, ui)on arrival, the memljers 

 are advised and come with their ie;iiiis to haul home the 



