Closing of Cheribundi production plant leaves hole in local supply chain

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Cheribundi’s decision to pull out of production in the Geneva area and use a co-packer in Michigan will leave a hole in the Western New York food processing world.

Cheribundi announced in January that it will start contracting for its tart cherry juice products in Shelby, Mich., and closed down its production line the next week. The company’s administrative offices remain in Geneva, though it let go most of its 50 workers who had worked in production in the plant off Routes 5 and 20. It was unknown whether any production workers accepted jobs in Michigan.

A spokeswoman for the company, Sara Brady, said Cheribundi’s CEO, Mike Hagan, would not be available for interviews.  Hagan has been CEO since last June, though he has worked for Cheribundi for several years and is credited with helping make it a national brand.

The company began in an agricultural and food-processing incubator in Geneva in 2004, bottling pure and blended tart cherry juice. Cheribundi was first called CherryPharm to capitalize on the health properties of cherry juice. It has a high antioxidant content and reportedly encourages quicker muscle recovery, reduces inflammation and improves sleep.

Cheribundi works with more than 200 major league and Division I college teams, supplying the drink to their athletes. The juice is now sold nationwide in a variety of stores including major grocery chains and Walmart. But that success won’t be shared by as many local people anymore.

“I’m disappointed,” said Mike Manikowski, director of economic development in Ontario County. “We have 40-50 employees that are affected,” referring to plant workers.

The news surprised many locally.

“We call on all our strategic businesses once a year,” Manikowski said. “The call with (Cheribundi) was only four or five months ago, but there was no indication.”

But Manikowski said he understood the decision.

“They want to control their costs and they have found a way to do it,” he said. “This is not atypical in business these days across all sectors.”

Some local growers of tart cherries will lose a profitable market for their crop, and local produce transportation companies will no longer be carrying the cherries to the plant in Geneva.

Bob Debadts of Lake Breeze Fruit Farms in Sodus, Wayne County, had sold his cherry crop to Cheribundi for something like 12 of the last 14 years.

“They took the whole crop and it was a juice cherry so the cherries didn’t have to be perfect and blemish free,” Debadts said. “As far as paying for them, they were one of the better ones that paid,” and the company was easy to deal with, he said.

Debadts had been selling Cheribundi 1.5 million pounds of cherries each year, accounting for about 20 percent of his farm’s business.

Besides growing cherries that he sold to Cheribundi, he also helped package other grower’s cherries for cold storage until Cheribundi could use them.

“We hope we can do business with them in the future, who knows …” Debadts said. But he suspects the association is over. “They don’t need our cherries in Michigan. They grew too many.”

Debadts said he expects he’ll sell his cherries elsewhere locally, but at a lower price than Cheribundi paid.

Michigan produces about 75 percent of the nation’s supply of tart cherries. Indeed, Cheribundi had been importing Michigan cherries for years to make juice here.

Manikowski said he believes New York wouldn’t have been able to keep up with the company’s continued growth, particularly if hit by hail or pests, the way the state’s crop had been affected in recent years.

“We don’t have the cherries. There are cherries in New York State but they are dwarfed by Michigan.”

Manikowski said he talked with Hagan after the announcement and learned that processing resources in Michigan also dwarfed New York’s. He said they will be using a plant between 600,000 and 800,000 square feet. The plant in Geneva is 90,000 square feet.

Cheribundi had been the recipient of county economic development support as it grew, and its processes were honed by its association with what’s now known as Cornell AgriTech.

“We assist them along the way. Not only with space, but with a couple of working-capital loans,” Manikowski said. The county provided a loan to help Cheribundi ramp up so it could break into national markets, including the Kroger’s chain of supermarkets.  “The last loan was repaid maybe six years ago,” he said, so there’s no financial leverage the county can use to entice Cheribundi to keep its production line here.

Manikowski noted that the company will continue to be headquartered in Geneva.

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