Water and the Wonderful Company

From ToxicLeaks

Wonderful Company background[edit | edit source]

You may never have heard of Stewart and Leslie Resnick, the American couple worth USD$5.6 billion, but there’s a good chance you know some of the products – Fiji bottled water, POM juice – their giant  Wonderful Company sells. That’s the rebranded name Leslie Resnick chose in 2015 to convey an image of health and healing for Wonderful’s fruit, nut and other products, but also to define its legitimately robust philanthropic efforts and corporate culture. The company also makes claims to “environmental sustainability in our processes, technologies and packages” that raises questions about the real truth.

“As one of America’s largest and fastest-growing produce companies, The Wonderful Company continues to build upon its position as the world’s largest grower of tree nuts and America’s largest citrus grower, while leveraging its new name to unify the company’s presence in the marketplace and deepen its connection with consumers,” the company said in its “Wonderful” naming announcement.

Yet for years, the Resnick empire hasn’t been wonderful for many across the globe. That’s true in Fiji, where single-use plastic bottles, anything but sustainable, are filled by tapping an aquifer in the remote Yaqara Valley on the island of Viti Levu. At the same time, Fijians are surrounded by rising seas while 12 percent of its roughly 900,000 residents don’t have access to safe drinking water. Farmers are hard-hit because of drought and water scarcity that Fiji’s government can’t fully address. In the United States, immigrant workers complain of unfair labor practices. Machinery failure killed a worker in January 2018.

Environmental activists complain that crops are irrigated with oil-tainted wastewater, a holdover from oil majors like Mobil and Chevron subsidiary Texaco that owned the land before selling to the Resnicks. Regional restaurants boycott Wonderful wine products because of clearcutting woods for the vineyards.

Meanwhile, the Resnicks live in a 2,300-square-meter mansion in California’s posh Beverly Hills. They’re celebrities in their own right, politically well connected and familiar faces among the Los Angeles A-list. They didn’t come from an agricultural background: The Resnicks are business and marketing pros, not farmers. What’s become worrisome is that the product they’re farming now is access to the water itself.

Scope of Wonderful’s operations[edit | edit source]

The Resnicks, who made their money through the Teleflora flower delivery business, bought their first parcel of California land, 1000 hectares of orange groves, in 1978 as a financial investment.  Forty years later, they were using more water than anyone else – than literally entire cities full of people – in California. As Wonderful grew, so did the demand for land and water and agricultural workers. By 1996, they had become the world’s largest producer and packager of pistachios and almonds. Pomegranates sold under the POM Wonderful label are grown on 9,000 acres (3,642 hectares), though the heavily marketed health claims the Resnicks made were shot down by the U.S. Federal Trade Commission and deemed misleading in a case with legal filings that have stretched across a decade now.

As of 2016, the Resnicks owned 728 square kilometers of input-intensive crops and irrigated two-thirds of them, not counting their citrus holdings outside of California. It takes 58 liters of water to deliver 16 almonds to a consumer; it takes 54 liters to deliver a mandarin orange. Multiply that across the jaw-dropping Resnick holdings throughout the Wonderful company, and the water consumption across its brands exceeds that of the all the homes in Los Angeles at nearly 450 million cubic meters annually.

Owning the water in California’s crisis[edit | edit source]

The Resnicks say that Wonderful commits $50 million each year to philanthropic efforts, much of that in and around the community of Lost Hills – the epicenter of Wonderful operations –  where they build schools, parks, housing and other amenities. At the same time, some estimates say 80 percent of the residents are undocumented migrant workers and three out of every four work for the Resnick empire. The January 2018 labor strike came as fruit pickers, paid by the bushel, saw a pay cut without any notice.

Yet the Resnicks command the resources, whether it’s unilaterally cutting worker pay, threatening a lawsuit over bees from neighboring farms, or harming the health and livelihoods of Fiji islanders half a world away. In California, where recurring drought strikes at the heart of the agricultural economy, the Resnicks have used the climate cycles to buy up land when other farms fail. It’s extended their holdings but also their own demand for water when supply is critical and the climate-change future is uncertain. So they’ve also bought the water. California’s arcane water regulations are confusing to even the most seasoned of the state’s native-born residents and growers, but essentially Resnick cut a deal that made him the majority stakeholder in the Kern County Water Bank – one of what some call California’s “water oligarchs.” Kern County was originally established by the state as an emergency reservoir for the City of Los Angeles, but privatization placed it under Resnick control. In some of California’s most dire drought conditions, the Wonderful properties remained in blossom while neighboring taps were running dry. A 2017 documentary on the Resnicks’ command over water advocates a return of water to public hands.

A 2018 investigative piece by Mark Arax, a water expert who served as consultant for the documentary, suggests there’s an even greater problem beyond Resnick’s diversion of Kern County water resources toward his own Wonderful empire. Arax traced an illegal pipeline that’s feeding Resnick farms from a Tulare County system, and discovered a Resnick partner who’s making millions from water desperation.

“Don’t let his boots, blue jeans, and ball cap fool you, the old-timers say,” Arax wrote. “He isn’t farming dirt. He’s farming water.” That’s a trend that does not bode well for California, where the outlook for 2019 includes more drought, and an increase of 48 percent of land in drought condition across 2018.  It also spells trouble for the United States, which relies on California for 13 percent of its agriculture.

The highest values, exceeding $6 billion each, are in Kern, Tulare and Fresno counties. In other words, Wonderful country.