Third-Gen Family Business Booms

Grapes and citrus are the company’s mainstay, but the brother team at the helm continues to scout out new opportunities.

by Sebastian Ramírez

The Hronis family’s story is one of constant progress, vision and growth, intertwined with an embrace of change. The family business, which was started by Jim Hronis in 1945, initially focused on the sale of alfalfa, cotton, wheat and vegetables. It wasn’t until the mid-1970s that he ventured into the grape business, farming approximately 1,000 acres at the time.

Today, the Hronis, Inc. headquarters, nestled in Delano, CA, boasts an immaculate building surrounded by neatly trimmed grass and towering palm trees. Situated in the heart of thousands of acres of family-owned grapevines, the headquarters warmly welcomes visitors.

Inside the conference room, which overlooks the cold storage plant where each grape harvested by Hronis is graded and packed, Pete Hronis, the company’s sales and marketing lead, narrates the history of this business and its journey to prominence.

“At the time we lost our father in 1991, we were packing a little less than 400,000 boxes of grapes a year, today we are packing around 7 million boxes of grapes and a million citrus,” he says. “We’re handling grapes on a 52-week basis, with joint operations in Peru, Chile and Mexico to supply our customers on a year-round basis.”

Pete and his brother Kosta, whom he fondly describes as his “best friend and partner,” have been in the business since the late 70s. After their father Jim’s passing, they assumed leadership of the company and soon launched their citrus business, enhancing their year-round product portfolio.

What distinguishes Hronis, Inc. from many other businesses is the hands-on approach adopted in everyday operations. Pete, who prefers wearing jeans and boots and driving a pickup truck, says this fosters respect among workers.

“Our workers respect us, because they know we’ve done the work,” he says. “We know where we came from, and the employees of the company get a tremendous amount of credit for Hronis’s success, so we’ve always been right with the people. It’s all about the people and with the people, and that’s how we operate.”

An energetic individual, Pete acknowledges his Type-A personality. “You have to be always, always on your A-game, on the ball, never let your guard down. I know it’s kind of unique, but it gets the job done.”

Indeed, the family’s hands-on approach has led to significant success. With a Hronis involved in all daily operations, the brothers ensure that nothing happens without their input. “Every field decision is approved by my brother, and every order that’s processed and shipped goes through my desk,” says Pete. “Keeping on top of everything isn’t easy, but by staying organized, we keep the operations running smoothly.”

Pete’s days start at 4 a.m., full of anticipation for the day’s challenges and opportunities. The brothers live a few hundred feet from the company’s main headquarters, underlining their commitment to the business and its appearance.

“Keeping this place like this is important to me. For example, once I had a customer come see me. When he arrived here, walking through the sidewalk he stopped and said, ‘If this is the way you handle your product, I don’t need to see anything else,’ and since that day, we’re still doing business with that company,” he says.

A Successful Family Business

The third generation of Hronis is already involved in the business. Demetri has been working for 15 years on field operations with his dad Kosta, while Nick and Chase have worked along with their father Pete in the sales department for over ten years.

“We work very well together. The real key, what has worked in this family for many years is that everyone has the right attitude of ‘leave your ego at home, come to work, do what’s best for the family and don’t worry about who gets the credit.’ That is the way we operate, and it is what has made us successful. You see other families that splinter when the next generation takes over, we don’t have that here because everybody toes the line,” says Pete.

Even though family businesses are the primary form of business all over the world, very few of them are able to last for a second or third generation. It seems to be that families often not only poorly prepare their next generation for responsibility, but they may descend into family conflict and/or lose their ability to innovate and develop their businesses.

However, for Pete, who will be turning 61 this year, “the successes in this business (table grapes) will continue to be the family-owned, operated and run companies.”

Passing down his penchant for forward-thinking, Pete has been able to build a team that works together toward one objective. “I always tell my kids, for example when I left my daughter at college, I said, hey, step forward, not back. That’s how we do things in this family. Don’t be a follower, you are a leader.”

Beginnings in Citrus

It is that ambition, the same one he tries to pass down to his kids, that led Pete into the citrus business. He started in it when he was very young, mainly as a way to complement the grape business.
Pete saw people picking oranges in winter, he thought: “We need to do that. We need to figure out how to make money in winter. We can not sit around all these months.”

But it wasn’t only about the money. Pete discovered that if he finished selling grapes in December, he would have no contact with the customers until July of the following year. Since the grape buyer and the citrus buyer were usually the same person, he figured if he stayed in front of his client year-round it would further cement the relationship.

“A lot of people don’t want to change and take chances, like starting e-commerce, getting into citrus or buying a citrus processing plant. But I always felt that if we didn’t change and get on the boat, the boat was leaving without us, and we were going to be on the dock empty-handed.”

Challenges of Producing in Delano

Even though Pete seems very confident about tackling every difficulty or challenge that comes the company’s way, every season brings new challenges. Water and labor have been the main issues for producers in the region in the past couple of years. “The water situation should be much better this year with the winter we had, but over the past ten years it’s been substantially dry,” says Pete, who has been a member of the local irrigation district for more than 30 years, overseeing the supply of water in the region. His work as a board member has helped him adopt better water usage practices that have helped in times of drought.

“Growing up, we were flood irrigating everything, but we have since converted everything to drip irrigation — so the savings have been tremendous. As a local district, we are probably using two-thirds the amount of water from when I started, just because of the efficiency in these irrigation systems.”

In terms of labor, during harvest, the entire operation requires around 2,500 people to run all the processes, which is why labor accounts for the largest part of the budget.
“Labor costs have continued to rise in California, therefore there is an ongoing concern for the rising cost of our product.” The Covid pandemic further exacerbated these issues. Supply chain issues and pallet costs increased from $14 to $50, and box and bag prices also skyrocketed. “All the materials we need to operate went up. Fortunately, and I never thought I’d be able to say this, but this year I was quoted on my pallets back to pre-Covid levels, which is amazing.”

Additionally, the war in Ukraine created a huge fertilizer shortage. Pete admits that he was “unaware that so much of our fertilizer came from Ukraine until we were unable to get it. So we’ve had to make adjustments to our production and growing techniques to adhere to what is now available for us.”

When asked about what types of adjustments they’ve had to make, “We’ve had to use other fertilizers from other parts of the world.”

Overall, the table grape industry has had a couple of challenging years, mainly in terms of costs and revenue, and Hronis has lived it all. “It seems that now costs are leveling off, and the revenue side is picking up. Retailers know that they need to have us in business here next year. Grapes are the No. 1 money maker in the stores during summer, so they need grapes.”

Online Sales

The latest milestone for the company, which was implemented a year ago, is selling their products online, directly to the consumer.

“We have multiple people that call here looking to buy our products direct. Now, they can go to our website and buy products, and I will ship it right to their house.”

This is not something normal for the table grape industry, according to Pete. However, he was getting too many requests from people looking to buy his product directly, so he figured they needed to take the next step — e-commerce. The test was done with citrus, but this season they will debut grapes on their online site.

Pete was actually the one who proposed this idea, but not everyone was happy with the decision at the beginning. “It’s a vision I had of starting e-commerce direct to consumer, so we’ll see where it goes. To be honest, we’ve been pretty successful with everything we’ve tried, I anticipate we will make this work as well.”

The first time he proposed the idea, everyone thought he was crazy, but Pete is not one to give up. “When they tell me I’m crazy — then I’m just going to do it more — that’s how I am. Just watch. We’ll figure this one out,” he says.

The biggest challenge has been to keep the fruit cold during shipment, and for the past year, Hronis has been testing every possibility. “I’ve been shipping to a relative and getting the feedback,” says Pete. “That’s been my test, and I send him products every week because I need to know how it arrives. Listen, I don’t want to miss anything. My brother and I try not to miss anything, because that’s the one thing that’s going to get you in trouble. As soon as you think that it’s okay is when you start to miss the important stuff.”

Outlook for the Future

With generational experience comes the ability to project what will happen in the near future and prepare for what’s coming. For Pete, he thinks there are wonderful opportunities for the grape business in the next five years, especially considering that “the complement of varieties coming out of private nurseries and the USDA are tremendous. The appearance, quality and taste are giving our consumers many choices. I really think now that retailers understand the costs involved, and they are assisting in making it successful for both sides. I’m really excited for what’s to come.”

ete thinks the company’s involvement in e-commerce will grow, especially with evolving consumer trends following the Covid-19 pandemic. Delivering directly to home is not going away anytime soon. “People will continue to eat grapes, they are healthy and an easy snack — so I think the vision is to continue to improve on varieties and continually monitor what’s the next best thing.”
Ultimately for Pete, success boils down to a good family farm such as Hronis, with generations of farming tradition. “We are going to continue,” says Pete, because as he says, grapes and citrus are all he knows. “We are professional grape growers, and the legacy will continue at Hronis to the next generation and then continue down that path.”