When Blue Diamond began planning for the first phase of its massive new Turlock plant, executives thought the increased capacity would see the company through at least five years of growth.
But now planners think the factory’s first phase might meet demand for just two years, with a full three shifts per day, thanks to unprecedented, surging growth worldwide for Blue Diamond’s almonds.
It’s just one sign of the outstanding growth experienced by Blue Diamond, which posted record-breaking revenues of more than $1 billion in fiscal year 2011-2012. That’s $300 million more in revenue than the co-operative pulled in just two years ago, an unprecedented surge tied directly to Blue Diamond’s shift to branded and value-added businesses following President and CEO Mark Jansen's 2010 appointment.
“We are getting our good going,” said Chairman of the Board Clinton Shick, during a presentation at the annual grower’s meeting Wednesday in Modesto.
The global ingredients business, supplying almonds for other food companies’ usage, accounts for nearly 80 percent of Blue Diamond’s sales volume. But by refocusing those ingredient sales on value-added products rather than raw nuts, Blue Diamond has seen sales surge. Blue Diamond is now the number one supplier of nuts used in new product ideas, across the world.
“If you've eaten a manufactured product with almonds, chances are they are your Blue Diamond almonds,” Jansen said.
That value-added business sees Blue Diamond slice, dice, and blanch almonds before shipping them off to food suppliers worldwide. And the demand for Blue Diamond almonds in products from cereals to chocolate bars has surged since 2010, up 69 percent.
Blue Diamond’s global consumer-branded business has jumped too – up 45 percent in the same period. And it’s not just because more Americans were choosing to eat a can a week of the company’s famous snack almonds. All products posted at least double digit gains.
In large part, the increase came due to surging demand for Almond Breeze – Blue Diamond’s branded non-dairy milk substitute beverage. Sales surged 47 percent for refrigerated Almond Breeze, and 21 percent for non-refrigerated product. Blue Diamond will introduce a single-serving package of the almond milk this year.
Sales are increasing worldwide for Blue Diamond, which has launched Almond Breeze and other products in the United Kingdom, France, and Australia. In all territories, growth is beating projections.
And a large part of that increasing demand can be directly attributed to Blue Diamond’s new ad campaign, “Get Your Good Going,” which debuted during the 2012 London Olympic Games.
Naysayers in the industry told growers that Blue Diamond could never recover the costs of the multi-million dollar ad-buy.
But Jansen said the sales proved them wrong, with snack almond sales during the Olympics alone increasing 43 percent. In the fiscal year ending Aug. 31, sales were up 21 percent.
And growers reaped the profits, with returns 5 to 7 cents per pound more than competitors, Jansen said.
Turlock the big story in Almonds
Despite the outstanding growth, it was another story that reigned supreme, Shick said.
“Let’s talk about the biggest story of the year for almonds – Turlock,” Shick told growers.
The Turlock plant is the largest capital investment in the history of Blue Diamond, though officials will not reveal its cost to either media or growers. Blue Diamond officials say the expenditure may be the largest in the entire almond industry’s history, and did reveal that it financed the entire equipment purchase for 15 years at 2.65 percent.
“In our lifetimes, we may never see rates this good again,” Jansen said.
The first phase of the largely-mechanized plant will focus on that value-added business – dicing, slicing, and blanching almonds for Blue Diamond’s global ingredients business.
The expanded capacity will allow Blue Diamond to take on new business it previously had to leave on the table. At the same time, the new technology will allow Blue Diamond to process almonds more quickly, at a lower cost, and more safely for both workers and consumers.
“When Turlock comes on line, that business will be available to us,” Shick said. “… Sometimes, under investing can be as costly, if not more-so, than overinvesting.”
Despite the facility’s hefty cost, Shick said growers can expect to earn more next year, even as they start to pay the plant’s costs down, thanks to the efficiencies and added business. The facility will cost growers just 1 cent per pound in 2012.
Phase one of the new 88-acre Turlock plant will open in May 2013, hiring up to 100 employees. Turlock Mayor John Lazar had previously stated that he expects between 500 and 800 jobs at the facility in the first five years of development.
The final roof beam was lifted into place just weeks ago. The roof has been sealed, and some equipment is now on-site.
“We’re on schedule, which is good,” said Ulli Thiersch, director of the facility's construction.
The second phase is expected to add almond-roasting and flavor coating capacities. Full build-out is expected to occur in 15 years.
Blue Diamond is building at its Sacramento headquarters too, constructing an “Innovation Center” to better develop new products.