Liberty Orchards Co., Inc.

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Liberty Orchards Co., Inc.

117 Mission Avenue
Cashmere, Washington 98815
U.S.A .
Telephone: (509) 782-2191
Toll Free: (800) 888-5696
Fax: (509) 782-4776
Web site: http://www.libertyorchards.com

Private Company
Incorporated: 1958
Employees: 80
Sales: $15.4 million (2007)
NAIC: 311330 Confectionery Manufacturing from Purchased Chocolate; 311340 Nonchocolate Confectionery Manufacturing; 311821 Cookie and Cracker Manufacturing; 454111 Electronic Shopping

FROM OLD ARMENIAN CANDY RECIPE TO NATIONAL FAVORITE

STEADY GROWTH FOR THE FAMILY-OWNED CANDY MANUFACTURER

SHIFT FROM CATALOG SALES TO MASS MERCHANDISER

PRINCIPAL COMPETITORS

FROM OLD ARMENIAN CANDY RECIPE TO NATIONAL FAVORITE

During the first decade of the 1900s, Armen Tertsagian and Mark Balaban, both young Armenians from Turkey, met in Seattle, Washington. The two opened a yogurt factory and then an Armenian restaurant in Seattle, neither of which was successful. Still intent on starting a business together, they moved to the eastern side of Stevens Pass at the foot of the Cascade Mountains in Washington state, a two-and-a-half-hour drive from Seattle, in the late 1910s. Feeling at home in the Cashmere valley, with its dry, rolling hills, ample water and sunshine, and fertile fruit orchards, the men purchased an apple farm and named it Liberty Orchards.

Although the 1918 fruit harvest was bountiful in eastern Washington, times were tough for most growers. Tertsagian and Balaban opened Northwest Evaporating, a dehydrating plant, to assist local farmers in dealing with their excess fruit and to raise additional revenue. The successful business also served the war effort by ensuring an “apple a day” for the U.S. troops in Europe; it continued to thrive throughout the next decade and led to the opening of Tertsagian and Balaban’s third business in the 1920s, Wenatchee Valley Foods, a cannery that also made use of growers’ excess fruit.

Still, Tertsagian and Balaban continued their search for other novel ways to make use of their surplus fruit, and Liberty Orchards began to manufacture Applum, a jam made from apples and plums. Then the men’s entrepreneurial spirit took a different sort of turn. They decided to use their excess apples to make rahat locum, a popular candy that they had loved as children in Turkey. After experimenting in their home kitchens, they came up with an apple and walnut recipe that became an immediate success at local picnics and gatherings.

When the owner of a nearby fruit stand offered to sell Tertsagian and Balaban’s candy, demand for the so-called Confection of the Fairies spread to nearby towns. With a market established, the men invested in packaging their product, which they named Aplets. The first Aplets came packaged in a box with a fanciful illustration intended to associate the treat with ambrosia and with the heavens. Later in the 1920s, a new, more earthly packaging theme emerged and Aplets’ tagline became “fruit and nut confections of the golden West.” By the 1930s, mountain imagery replaced the heavenly imagery on the package.

Throughout the 1920s and 1930s, Wenatchee Valley Foods grew rapidly, overshadowing Liberty Orchards’ other ventures and becoming Tertsagian and Balaban’s main business venture. The partners asked John Chakirian, Balaban’s nephew, to emigrate from England to join their company in 1930 and take charge of Wenatchee Valley Foods. Chakirian headed the cannery until the company sold it in 1945.

At the same time, Liberty Orchards continued to focus on the sale of its Aplets. Tertsagian began traveling throughout the Pacific Northwest selling the candy. The company took a booth at the American Exposition in San Diego in 1935 and at the San Francisco World’s Fair in 1939, where it introduced many more people to Aplets. It also built floats that appeared in parades throughout the Northwest and regularly won the grand prize at Seattle’s annual Seafair.

Within a few years, the demand for Aplets and the newer Cotlets, made from apricots and walnuts, had spread beyond the Pacific Northwest, although distribution was still limited to this region of the country. In response to letters from satisfied customers requesting to order Aplets and Cotlets by mail, Liberty Orchards would send out a price list. This informal mail-order department sent shipments throughout the United States.

STEADY GROWTH FOR THE FAMILY-OWNED CANDY MANUFACTURER

During World War II, sugar rationing severely limited the amount of candy the family company could make, but Wenatchee Valley Foods continued to flourish despite the fact that Chakirian left to serve overseas. In 1945, the men sold the cannery, anticipating the more widespread use of refrigeration and frozen foods. When Chakirian returned home, he went back to work at Liberty Orchards. So, too, did Dick Odabashian, an army pilot, who married Tertsagian’s oldest daughter. Odabashian logged many flight hours stateside in a small prop plane promoting Aplets and Cotlets.

For close to the next decade, the company continued to grow under the direction of its founders. Tertsagian died in 1952, and Balaban died in 1956. After their passing, Chakirian and Odabashian took over leadership of Liberty Orchards, and under their guidance, the company’s growth continued.

Several events took place during the 1960s that boosted national sales of Aplets and Cotlets. At the 1962 Seattle World’s Fair, the company introduced many hundreds of thousands of Americans to its confections, leading to broader national awareness of Liberty Orchards. Also during the 1960s and into most of the 1970s, a growing segment of the population became dedicated to health awareness and nutrition. Health food stores began to appear, and as chocolate sales declined, Aplets & Cotlets became the healthful candy choice of many.

Liberty Orchards introduced a third flavor, Grape-lets, to its product line in time for the 1974 World Expo. It also changed its package illustration again, using photography this time to ensure that customers understood the ingredients that went into making its candies. The result was dramatic: an almost immediate 30 percent increase in sales. The company’s candies could be shipped farther, too, thanks to Chakirian’s packaging innovations that extended the shelf life of the candies.

COMPANY PERSPECTIVES

Every piece of delicious Liberty Orchards candy, from kettle to package, is meticulously scrutinized for quality by a dedicated staff of first-rate candy-makers.

When Chakirian retired in 1981, Greg Taylor, Tertsagian’s grandson, became president of Liberty Orchards. Under Taylor’s leadership, the company continued to experiment and grow. Around 1982, it established a full-scale mail-order department. In 1984, it added Fruit Festives (later renamed Fruit Delights), using Tertsagian and Balaban’s original recipe, but with different fruit and nut combinations intended to appeal to a broader audience. These included pineapple and macadamia nut, strawberry and walnut, raspberry and pecan, orange and walnut, and blueberry and pecan.

By 1994, Liberty Orchards had annual sales of $5 million. It sold most of its candy by mail order, through catalog, online, or wholesale, and shipped products around the world. The company nonetheless remained small, family-owned and -run. Despite being one of Cashmere’s largest employers—Liberty Orchards employed 175 in its home town of 2,500—the company maintained only a small administrative staff. In addition, the relationship between Liberty Orchards and Cashmere was friendly, viewed by both company and municipality as mutually enhancing. The town thrived primarily on tourism, and many of those who arrived in Cashmere did so to visit Liberty Orchards. In 1995, the company welcomed 55,000 visitors from the United States, Canada, and Japan to its facilities.

SHIFT FROM CATALOG SALES TO MASS MERCHANDISER

However, after the collapse of one of its major storage facilities under the record snows of 1996, that relationship underwent some changes. With 64,000 people touring the factory in 1997 and the retail store important to the company’s marketing, Liberty Orchards needed space to expand its store and parking lot and a means of attracting travelers into Cashmere from nearby Highway 2. There appeared to be no adequate space for the company in small Cashmere, and strict state law prohibited any sort of advertising on the highway. Liberty Orchards began to consider leaving Cashmere for nearby Leavenworth, Washington.

The search for a new home for Liberty Orchards drew national attention, much of it negative. Taylor insisted in Industry Week in 2000 that the company had been merely “exploring a move, we thought confidentially, when the mayor and a group of councilmen came to us and said, ‘You can’t do that—it would devastate the town.’” According to Taylor, the city council, mayor, and the company together drew up a list of suggestions to increase tourist traffic. By contrast, the New York Times ran an article that presented the company as strong-arming the Cashmere City Council into accepting its “demands” or losing its second largest employer. These “demands” included selling Liberty Orchards the town hall building, making the town the official “Home of Aplets and Cotlets,” and changing the name of one of Cashmere’s major streets to Aplets Way. After the article appeared, some customers withdrew their orders in protest.

Presented with the possibility of losing Liberty Orchards to Leavenworth, the city council approved the changes in 1998. Revenues increased to $7 million for Liberty Orchards in 1999. During the summer of 2000, visitor counts to Liberty Orchards were up by more than a third.

During the next several years, Liberty Orchards reevaluated its marketing tactics. According to Taylor in 2003 in the Seattle Times, “There’s been a lot of consolidation in the industry. We now do business with Wal-Mart because we have to, having lost many of our former top 10 customers, such as Frederick & Nelson, Payless, and Pay ’n Save.” The company thus shifted its emphasis from regional and mail-order distribution to national distribution through several drugstore chains and clubstores, such as Costco, and mass-merchandising arenas, such as Target and Wal-Mart. It also decreased its catalog circulation in 2000, although it still continued to issue large sample mailings and to prospect for additional customers through mailing lists. During the holiday season, when it did about 50 percent of its business, it contracted with an artist to create a proprietary theme to make some of its products look more seasonal.

In 2003, 80,000 visitors toured Liberty Orchards’ factory and company store. Although Costco Wholesale had become the company’s best customer, almost 2.5 million pounds of Liberty Orchards’ candy sold through its catalogs or over the Internet. During the next three years, foreign sales increased with significant business in Japan, England, Mexico, and Canada. The company also branched out with a new product. Fruit Chocolates, manufactured by Warrell, were pieces of strawberry, blueberry, apricot, raspberry, and other fruits that were swirled in a layer of milk chocolate and colored white chocolate.

KEY DATES

1918:: Armen Tertsagian and Mark Balaban found Liberty Orchards.
1930:: John Chakirian joins the company.
1945:: The company sells Wenatchee Valley Foods.
1952:: Tertsagian dies.
1956:: Balaban dies; Chakirian and Dick Odabashian take over leadership of the company.
1981:: Chakirian retires and Greg Taylor becomes president of the company.
2003:: Some 80,000 visitors annually were touring Liberty Orchards’ factory and company store.

Although revenues held more or less steady— “We’re just not a fast-growing company,” Taylor admitted in 2003 to the Seattle Times —business was still good for the small company located in a small town, all of whose stockholders were family members of its founders.

Carrie Rothburd

PRINCIPAL COMPETITORS

Brach’s Confections, Inc.; Haribo of America Inc.; Hershey Foods Corporation; Jelly Belly Candy Company; Mars, Incorporated; Nestlé S.A.; Russell Stover Candies Inc.