Monday, Mar. 11, 1946

The Fruit King

 

Amid the sunshine and fruit trees on his 10,000-acre ranch near Arvin, Calif., Joseph Di Giorgio, 71, imperiously watched workmen pour concrete for what will be the world's largest winery.

Like many a little king, Joe Di Giorgio was not satisfied, although he grows more plums and Bartlett pears than anybody else in California, more oranges and grapefruit than anybody else in Florida, more grapes than anybody else on earth. So he was spending more than $1,000,000 for his new winery, which will eventually hold two million gallons in fermentation tanks, another 20 million in storage.

Partly, this was insurance for Di Giorgio grapes. Now, if the price is not right, or frost comes early, the fruit king will turn his grapes into wine. But it was also an aggressive invasion of the wine business.

Tough & Tougher. Joe Di Giorgio has been battling ever since he ran away from his home in Sicily at 14. At 19, he was operating his own fruit commission house in Baltimore. At 21, he started the Atlantic Fruit Co., imported bananas in competition with big United Fruit. When it cut prices to fight Di Giorgio, Joe proved that he was tough, too. He invaded United Fruit's European market, became such an annoyance that United Fruit made peace.

He founded the Baltimore Fruit Exchange, bought control of the New York Fruit Auction Corp., extended his jobbing business. When shippers' loans to growers started running as high as $4,000 an acre during the land boom following World War I, Di Giorgio limited loans to $350 an acre. Others scrambled for business he lost. When the boom collapsed, most of them went broke.

The Desert Blossoms. But Di Giorgio had plenty of cash to buy cheap desert and range land in California's Kern County. Irrigated, the desert blossomed with fruit trees and grape vines at Arvin and on a 5,000-acre ranch north of Delano. Since then, production has been the main business of the Di Giorgio Fruit Corp. In 1930, he sold out his prosperous Atlantic Fruit & Steamship Co., an outgrowth of Atlantic Fruit.

About the same time he got a heady taste of the wine industry, souring under Prohibition. Di Giorgio made a deal to deliver grapes free to the Italian Swiss Colony winery in exchange for 90 gallons of wine for each ton of fruit.

When Repeal came, he had 500,000 gallons aging in the winery. Italian Swiss, which had thought Di Giorgio crazy to give away his grapes, was glad to buy back his wine. His take: $250,000.

With the cash, he bought a small winery of his own—primarily as crop insurance. (Frostbitten grapes, unsalable as fresh fruit, are usable for wine-making.) This paid off a few years later when the grape crop was frosted. His winery turned what might have been a half-million-dollar loss into a half-million-dollar profit. Last year he sold out for almost $7,000,000, but did not get out of winemaking.

New Wine, New Bottles. Most of the actual work of running the new winery, along with Di Giorgio Fruit, has fallen on the heirs apparent to the fruit empire, four of the childless little king's nephews. All told, they boss dozens of enterprises (orchards in the Sacramento Valley, a cannery and 8,000 acres of citrus groves in Florida, a box factory in Oregon, etc.), which netted $4,212,000 last year.

On doctor's orders, the little king, who has always run his empire like an absolute monarch, has supposedly retired. Sample behavior in retirement: when he went to the races to relax, he ended up buying a string of race horses.

Actually, he is as busy as ever, hopes to get his winery crushing and have half the capacity in by July. Most of the wine and brandy will be sold to big distillers. But as a hedge against a price squeeze, the canny little king plans to keep his best wine, sell it under his own label.

ref:  http://www.time.com/time/magazine/article/0,9171,776733,00.html

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