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Almond co-op now seeks new tonnage

It is a re-invented, leaner and hungrier Blue Diamond Growers than it was in a little more than three years ago when Doug Youngdahl became president of the 4,000-grower almond cooperative based in Sacramento, Calif.

Blue Diamond's new CEO claimed the industry played a key role in changing that attitude of the state's almond industry from being a price taker to being a price setter based on world demand.

Youngdahl pounds the table when he proclaims it “made no business sense” for 2000 almonds to be selling for less than $1 per pounds when the industry was setting shipment records.

At the same time Youngdahl was preaching his new attitude gospel to the industry as a whole, he was leading the effort to make Blue Diamond a super star.

Blue Diamond membership was closed for 15 years when Youngdahl took over. Its volume had been stable for years, but it was losing out on growth. Youngdahl convinced the Blue Diamond board to throw open the membership rolls.

“We have had good response to opening our membership because Blue Diamond's grower returns for the 2001 and 2002 crop years have been at the top of the industry,” said Youngdahl. He does not expect that to change in 2003.

Blue Diamond handles about 30 percent of the state's crop and is the leading branded almond processor in an industry that is largely a bulk commodity. Blue Diamond is to almonds as Sun Maid is to raisins.

“We have worked for the past three years to make our operation more transparent to the California almonds industry. We want growers to see clearly what we are doing,” said Youngdahl.

Blue Diamond is the only almond handler to publish financial statements. Last year Blue Diamond sales totaled $422 million.

In a volatile market like today, almond growers tend to “listen to the highest bidder.

Flawed strategy

“However, many growers realize the inherent risk in doing that. Those who made quick decisions at the front end of the last two crop years found taking the highest bid is a flawed strategy,” said Youngdahl.

“Patient, deliberate” Blue Diamond marketing over the past two years returned six to eight cents more per pound that most of Blue Diamond's competition, according to Youngdahl.

Blue Diamond is aggressively going after new tonnage with a leaner cooperative that has eliminated 68 percent of its mature products since 2001 that were not generating grower profits.

“That has taken a lot of the complexities out of our operation and simplified the way we do business,” he said. With that came the elimination of 35 percent of the cooperatives salaried workforce and 48 percent of its hourly jobs.

“We have re-invented ourselves into a pretty spry and energetic 93-year old cooperative with the most recognizable brand of almonds,” said Youngdahl.

Blue Diamond has set shipment domestic and export records for the past two years. Retail scanner sales last year were up 45 percent over the year before and are up 45 percent so far over last year.

Blue Diamond now has marketing ties with the NFL and auto racing.

Costco and Wal-Mart are big Blue Diamond retailers now.

Pleased with role

Youngdahl is pleased with the role Blue Diamond has played in reversing the fortunes of the state's almond industry.

“We are glad to see the smiles on the faces of all California almond growers and we believe Blue Diamond has played a unique role in that … now we want more smiling growers to bring their tonnage to Blue Diamond,” said an unabashed Youngdahl.

“Everyone in Blue Diamond is treated the same — no special deals. We think that is the fair way to treat growers,” he said.

“There is more demand for Blue Diamond almonds in the world than we can supply,” he said.

The cooperative has a wide array of “user friendly” programs to attract new growers; short or long term contracts; all or only a portion of a grower's tonnage; volume contract; accelerated payments; payment deferral options; crop deferral; pre-harvest advances based on crop insurance; pre-harvest advance based on crop set and stockpile advance.

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