MEDFORD, Ore. — In business, bigger is better — except when it’s not, as the Naumes family has found in more than seven decades operating a fruit growing and packing company.

After its inception in 1946, Naumes Inc. expanded from Southern Oregon to include farmland and packing operations in Washington and California, peaking at about 7,500 acres.

Changes in the economic and regulatory landscape convinced the family to eventually divest its out-of-state holdings, however.

The company now produces pears and grapes on more than 1,200 acres, as well as packing, processing and cold storage facilities, entirely on its home turf in Oregon’s Rogue Valley.

‘Always nimble’

While smaller in size, Naumes Inc. has continued to evolve by venturing into the wine industry, supplementing its traditional trade in pears.

“We’ve always been nimble,” said Laura Naumes, the wife of Mike Naumes, whose father founded the company.

“We’re very good at pivoting,” adds Cynthia Naumes, one of Mike and Laura’s three children.

The decision to scale back was driven by the increasingly burdensome regulatory regimes of three different West Coast states, as well as changes in crop markets and the company’s financial priorities.

“We eliminated our debts. That was part of our program of selling,” said Mike Naumes. “Thankfully, we don’t have to work with any bankers any more.”

Retailers consolidate

The ability to adapt is indispensable for fruit growers, who’ve had to contend with increasing consolidation among their customers.

Mergers among major grocery retailers have endowed the handful who remain standing with more sway over their suppliers.

“They have more buying power, so they can dictate what they want,” Laura Naumes said. “If you’re not driving profit with your commodity, you’re out.”

For pear producers like Naumes, that means dealing with 15 or more different types of packaging, whereas their fruit was traditionally packed into a couple standard carton sizes.

“They want to stand out and be different from the other retailers,” Laura Naumes said.

To further complicate matters, grocers try to reject various bags and boxes over time, leaving pear packers with unused inventories.

“We end up with a lot of obsolete packaging sometimes, which is a problem,” she said. “Packaging is huge because it’s very expensive.”

The shifting packaging demands have an upside, however. Naumes can keep its pears in cold storage and spread out the packing season over a longer time.

Whereas the company once packed each year’s crop within 10 weeks, relying on about 300 employees and three packing houses, the process now requires about 6 months, 150 workers and one packing house.

More mechanization

Even with this reduction in labor, the company would like to see more mechanization of the packing process at its headquarters in Medford, Ore.

However, the irregular shape of pears has been an obstacle to such advances — because apples are rounder, for example, they’re more amenable to optical sorting technology.

“The packing house is an area that can use a lot more automation,” Mike Naumes said. “It’s going to have to come to that, because you can’t find the packers anymore.”

Though pears are still the company’s mainstay with about 1,100 acres in production, its foray into wine grapes has become an important component of the business over the past decade.

Diversification

The diversification into wine was driven by Laura Naumes’ passion for viticulture as well as the availability of prime grape-growing sites on the family’s property, but the crop’s propensity for mechanization didn’t hurt.

“One thing about grapes is they are more automated than pears, for sure,” Mike Naumes said.

The company has acquired a grape harvester, hedger, pre-pruner and leaf puller to assist in the vineyard, as well as an optical sorter for winemaking.

Due to the Rogue Valley’s abundance of microclimates, the region is known for its ability to produce wine varietals “from Albarino to Zinfandel,” said Chris Graves, the company’s winemaker.

In 2015, the company built a “custom crush” facility that produces wine brands under contract for various customers, using the family’s grapes and those from other growers.

Custom crush

The facility works with expert winemakers who are deeply involved in the process as well as novices who are more hands-off, Graves said. “Some customers just drop off grapes and say do your thing. It really runs the spectrum.”

Lori Osborne, an alcohol retailer in Bandon, Ore., began hiring the Naumes custom crush facility several years ago to produce her signature cranberry wine under the “On the Waterfront” label.

“It’s very difficult because a cranberry is a very tart berry,” said Osborne, who also contracts with the company to produce several other varietals.

While she considers the wine her “baby” and closely guides the production process, Osborne said she appreciates the company’s equipment and expertise.

“They’re there to help you and be with you the whole time,” she said.

To showcase their grapes, the Naumes family decided to produce some of their own wine, eventually culminating in their own label and the opening of a tasting room in nearby Talent, Ore.

“The wine was phenomenal so we had to get a label and that was the beginning,” Graves said.

The company manages about 140 acres of vineyards and is willing to plant more, providing it’s confident of demand.

“We have a lot of ground available,” said Mike Naumes. “It’s just a matter of having a market for the grapes.”

Founded: 1946

Headquarters: Medford, Ore.

Ownership: Mike and Laura Naumes, and their three adult children, Cynthia, Joe and Sean

Crop production: 1,100 acres of pears, 140 acres of grapes

Other operations: Packing house generating up to 500,000 boxes of pears a year, 250,000 square feet of cold storage facilities, 16,000 square feet of freezer storage, custom crush wine facility producing 30,000 cases a year

Employees: 100 year-round, 500 at peak season