January 14, 2013 | Melonie Magruder

It’s enough to make you cry. Gills Onions is one of the largest family-owned onion farming operations in the nation. But the Oxnard-based facility doesn’t just grow the tears-provoking vegetable. They control every aspect of production from growing, harvesting, processing, packing and shipping the bulbs in handy, diced up packages to retailers, food service outlets and industrial manufacturers throughout the nation and Canada. And they do so using some surprising sustainable production practices that have lowered their operating costs over a million dollars a year.

Allen Gill had been farming in California’s Central Valley since the 1940s when he brought sons Steven and David into his Rio Farms business.

Steven Gill established Gills Onions in 1983 when he was asked by a salsa manufacturing company to provide them with already diced onions. Before then, the only way to wash, skin, slice and dice onions was laboriously (and tearfully) by hand in the kitchen. The Gills developed proprietary equipment to process the vegetable and deliver fresh-cut, packaged onions directly to manufacturers and retailers. Business boomed.

But as environmental concerns became socially prevalent and the farming operations expanded, economies of scale forced the farmers to focus on more sustainable methods.

“Sustainability as such wasn’t such a big issue in the 80s,” Steven Gill said. “But farmers have to operate as sustainably as possible in a free market anyway. It means the difference of making a profit or not at the end of the day.”

Today, Gills Onions has developed systems to utilize virtually all waste in their production line to power their processing facilities, composting whatever is left over and selling the very last dregs to other farmers for cow feed.

“We commissioned an anaerobic digester in 2009,” company Director of Sustainability Nikki Rodoni said. “It’s part of an Energy Recovery System U.C. Davis helped develop coupled with fuel cell technology. We have a comprehensive sustainability program at our plant now to deal with our waste stream and it has entirely changed the picture.”

Gills Onions has a significant “waste stream.” During the busy season, they process a million pounds of onions daily. One third of each onion is lost in the skinning and dicing procedure, generating some 300,000 pounds of waste each day.

“In the past, we would just throw that waste back out into the fields,” Rodoni said. “That alone would cost us $450,000 a year in diesel fuel and labor. It was also taxing to the soil and had a potential for ground water contamination.”

Instead, they squeeze out 30,000 gallons of onion juice daily that is pumped into a 145,000-gallon anaerobic digester tank to convert to methane and biogas. The hydrogen stripped out generates 600 KW of energy to power their 100,000 square-foot plant in Oxnard – enough to power 460 homes annually. In doing so, they save themselves some $700,000 a year in electrical bills.

“An operation this size has to consider waste efficiencies versus inefficiencies,” Rodoni said. “It’s not enough to just examine water usage and baseline metrics of operation. When state regulatory issues come our way, we have facts on the table.”

In an agricultural environment like California’s, water is of paramount concern. Gills Onions utilizes drip irrigation and soil moisture sensors. They perform regular soil tests to determine measures of fertilizers and measure fuel usage in the fields via pumps – all methods to increase the sustainability factor and – hopefully – their profit margin.

“We feel we are greening the supply chain with customers like Costco or Safeway or Walmart,” Rodoni said. “As consumers become more aware of where their food is coming from, it’s a chance to educate everyone in the industry about better and smarter growing and processing methods.”

Such sophisticated methods don’t come cheap. Their Energy Recovery Systems cost about $10.8 million, requiring, Rodoni said, a certain effort to educate lenders as to the viability of the system. However, they figure such an investment will see a return within six or seven years.

“It’s a lot of work,” Gill said. “It took me 10 years to develop the whole system and a lot of the savings goes to debt service and further research. But I figure I save at least $100,000 a year. My Dad would never have believed it.”

Gill admitted California’s notoriously strict regulatory agencies “slow down” progress. He says they could generate enough biofuel to “pump back into the pipeline” and contribute substantially to a clean fuel source, but that such a proposal also poses significant investment of time, effort and money. Permits, feasibility studies costing from $10,000 to $100,000 and equipment running upwards of $700,000 would be a part of the equation.

“The folks in Sacramento just don’t understand the process,” Gill said. “They get wind and solar but the state needs to be educated. We work with the California Energy Commission and they are working with the state agencies to bring them up to speed. It just takes time.”