Partnering for Growth, Leading the Way

Blue Diamond is an incredibly valuable business and our grower-owners know that second only to their land and trees is their ownership stake in the cooperative. Grower-owners have a responsibility to ensure the business is well run and the most important action is to elect a strong board of directors. I am pleased that in this responsibility, our cooperative has done well. In 2017, for governance, Private Board Magazine awarded Blue Diamond Growers Board of the Year and we honor Chairman Dan Cummings and the entire board for their excellence in governing Blue Diamond.

Every year growing and marketing almonds is an adventure: two billion pound crops, monsoonal weather during bloom, record summer heat, late season navel orange worm infestation, resulting reject kernels, and market premiums for high quality almonds. Frankly, that every crop and each day presents new challenges and opportunities is part of what makes the work fun.

I have never been more honored to serve as Blue Diamond’s President and CEO. The cooperative is always innovating and looking for new ideas. At our annual grower meeting last month, we welcomed HP Hood Executive Vice President Jeff Kaneb (pictured left). Ten years ago HP Hood, the second largest dairy processor in the U.S. and a family-owned company, entered into a licensing partnership with Blue Diamond that took a small shelf-stable Almond Breeze business into the refrigerated section. At first, the biggest concern was producing small enough quantities to avoid throwing away old-age product. At that time, soy milk represented 75 percent of the non-dairy category with Silk the dominate brand. Today, Blue Diamond Almond Breeze is the share leader and almondmilk dominates the non-dairy category with 70 percent share. From the beginning, the son of the owner was Almond Breeze’s champion at HP Hood. His leadership and partnership in building a $400 million retail business is helping to grow Blue Diamond.

When I came to Blue Diamond, I always asked growers, “What do you need from me?” They always responded with the same three answers, “Return, return, return.” At the time, Blue Diamond was arguably the best in the almond industry. The 10-year return average had beaten the competition by $.01 per pound. However, to get noticed, it was clear that we needed to set the bar higher. So, we set the audacious goal of consistently beating the competition by $.10 a pound.

In the first three years with Blue Diamond, the average beat improved to $.05 a pound. In the next three years, Blue Diamond better navigated the turmoil of the drought pricing bubble and subsequent price correction that destroyed the returns of handlers with less credit-worthy customers.

Last year, the cooperative’s great return was in part due to unusual challenges experienced by competitors. We said that if we exclude the unusual market conditions, Blue Diamond performance was responsible for achieving a $.10 beat. For the 2016 crop year, pricing was remarkably stable, so returns better reflected the performance of the cooperative. For this reason, the $.11 advantage may represent Blue Diamond’s best-ever performance, and our stretch goal of $.10 competitive beat is now becoming our expectation. For this accomplishment, we should thank the employees of Blue Diamond. We will continue to raise the bar. Each year, it is our intention to increase this competitive advantage by another $.01 per pound.

California almond crops are getting larger and new plantings can be seen throughout the state. Yield will also improve with normal rainfall and bloom conditions. By 2020, our existing Blue Diamond growers will deliver an additional 120 million pounds. To put this in context, it is like adding the second largest almond handler on top of our existing co-op business. For this reason, in addition to return, we are chanting, “Growth, growth, growth.” Preparing Blue Diamond for profitable growth is our key strategic imperative.

The massive price increases at the end of the drought were good for growers’ balance sheets, but bad for market demand. Last year, with the return to historical pricing, we committed to reinvigorating almond sales growth and we delivered in a big way with growth of 8 percent. The business press is reporting that most food companies are struggling to grow. Blue Diamond will continue to defy this trend. By investing in our brands, opening new global markets and innovating new almond products, we are working toward an annual growth rate of 10 percent.

Every year, I ask our grower-owners to rise together and take positive action on behalf of Blue Diamond. Last year, we successfully persuaded a club store that Spanish almondmilk was not a substitute for locally owned, grown and produced Almond Breeze. Thanks to our grower-owners, we are back on the shelf in Northern California and selling very well! With 3,000 farm families and 1,500 employees we are powerful when we stand together.

This year I asked that we take on Congress. Our voice is needed in the political arena. We come from all ethnic, economic and political backgrounds, but we are all united by one mission: maximizing the returns for each grower who entrusts their almonds to Blue Diamond. Any benefit to the cooperative is ultimately passed down to our grower-owners.

Tax reform became an area of focus as the U.S. House proposal would have put a significant increased tax burden on our members. The Blue Diamond team has been positively influencing the tax reform bill and I want to thank all grower-owners who contacted your Senators and Congressmen to encourage them to better represent California agriculture, farm families and the Blue Diamond cooperative.

Politics may not be your personal passion. Most of us would prefer to get to work on what we do best, whether it is farming, running a business or leading a family. Candidly, I am so passionate for Blue Diamond that each day I wake up excited to go to work. I have been given the best job in the world and I am so thankful that our grower-owners entrust me with their almonds. Together, we will work through challenges in the political and regulatory arena. On behalf of the amazing team members of Blue Diamond, I can confidently state, “The Best is Yet to Come!”

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