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Blue Diamond welcomes tons, members

Blue Diamond Growers is poised to handle more tonnage, and more members, as world markets absorb California's billion-pound almond crops, says the Doug Youngdahl, president of the Sacramento-based cooperative.

Speaking at the organization's recent annual meeting in Fresno, Youngdahl said, “The days of looking at large crops with trepidation are over. Ever-larger crops will be needed in the future to support global consumption growth.”

As proof of Blue Diamond's presence in the market, a confident Youngdahl pointed to member returns at a record $2,900 per acre in 2003, up from $2,245 in 2002. The previous record return was $2,500 per acre on the 756-million-pound crop of 1997.

Returns for the 2004 crop, to be shared by the 3,500 members from Bakersfield to Redding, will be even higher, he predicted. According to the California Agricultural Statistics Service, the 2004 crop is estimated at 1.08 billion pounds, up slightly from the 1.04 billion of 2003.

Other notable Blue Diamond numbers for 2003 are near-record sales of $541.9 million, a 38 percent reduction in revolving reserves used to finance the organization, a 43 percent hike in retail brand sales, and annual savings of more than $9 million brought on by technological improvements.

New plantings

Youngdahl said his organization is ramping up to continue its leadership in the spate of new plantings ignited by high industry returns. “Whenever an agricultural industry achieves success like the California almond industry has, it invariably leads to additional plantings. New plantings are on line to exceed 50,000 new, net acres each year for the balance of this decade.”

The industry, he added, will need to find homes for the swell of production coming in 2007-08. “When this wave comes, it will be absolutely critical that the industry have a strong leader, Blue Diamond, leading the way for new products, new consumption, and new markets throughout the world.”

As the co-op proceeds with its marketing plan, he said, one chief element is acceleration of growth of its consumer products division, crucial in market positioning for the future production gains.

“This strategy has been increasingly successful. Sales of Blue Diamond products in grocery outlets have increased nearly 50 percent in each of the two last years, and Blue Diamond is clearly the No. 1 snack almond brand in America, commanding a 43 percent market share.”

The Blue Diamond brand — so named by the company's founders 94 years ago for blue diamonds, the most precious gems - also relies on strong consumer recognition to differentiate it from competitors.

Youngdahl credited their “strong industrial management team” for its focus and execution to market, process, and sell members' production.

Leveraging brand

“The combination of all these efforts is leveraging our brand to produce consistently competitive returns while we are building an even stronger organization.”

Departing from his prepared remarks, Youngdahl appealed to members to help sign up more acreage. “When you have meetings in your area, I'd be pleased to come and talk to other growers about why they should place more, all, or at least some of their production into Blue Diamond.”

He went on to say they have untapped processing capacity. “The more volume through that facility simply means lower costs and higher returns, so that we continue to be a strong force in the California almond industry.

“There's no doubt that the success we have achieved in the last three years in substantially increasing your returns has led to substantial new plantings, and we should get a share of those new plantings.”

Board chairman and Chico grower, Howard Isom, reminded members of several benefits they enjoy. Those include brand power, industry leadership, competitive returns, management talents, and member-owned processing facilities. “It's more than just receiving a check in the mail.” Isom, who came to the board in 1988 and has been chairman since 1991, said their slogan, “A Can A Week, That's All We Ask,” has gained worldwide recognition.

Exciting period

Although the almond industry and the culture of the cooperative have changed during the past 94 years, Isom said this is the most exciting time since he's been on the board. Since Youngdahl's appointment as president in 2001, Isom said, “we have continued on a path of improved operations, and become more competitive, demonstrating to the industry that we have the brand power to continue to lead.”

Concurrently with big crops and higher returns, the organization has cut back its revolving reserves to 2.5 percent, down from 4 percent and 6 percent earlier.

He said one strategic goal is to build their capital investment to more than $100 million over the next several years. “We are on our way to doing that, which is why we were able to reduce the revolving reserves in 2003. When we finalize the 2004 crop, we will evaluate the reserves again and we hope it will stay in the same range.”

Plans are that the investment in facilities will support efficient and competitive operations for new products and bolster grower returns.

“We also want to grow our volume,” Isom said, “and we would like to increase our share of the California crop over the next five or six years by 75 million pounds. This additional tonnage will definitely make us more competitive.”

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