(Left) The California almond harvest will be smaller this year due to a lack of winter chill and ongoing drought conditions, but the largest marketer of the crop reports a positive outlook for the almond business.
"The historic drought has brought new challenges of water insecurity, unpredictable consequences to intermediate production and supply, as well as unprecedented media attacks," Blue Diamond Growers Chairman of the Board Dan Cummings said.
Addressing an estimated 1,200 people at the cooperative's 105th annual meeting last week, Cummings said he believes California "needs to manage its water better, and stakeholders traditionally at odds over the water allocation need to work together to develop a long-term water strategy."
Blue Diamond President and CEO Mark Jansen said the almond sector became a target in both traditional and social media over its perceived water usage.
"In year four of the drought, many of us believed that the almond industry was under attack. Talk show hosts, bloggers, newspapers were all looking for a villain—and for a while, almonds were that scapegoat," Jansen said.
Reporting eventually became "more balanced," he said, following what he called a "concerted effort" by Blue Diamond, the Almond Board of California and others in agriculture.
"California is the best place to grow almonds," Jansen said, thanks to its unique, hot and dry Mediterranean climate, adding that the state's growers are 10 times more productive, efficient and sustainable than their counterparts in Spain, the world's second-largest almond-growing region.
Cummings, who grows almonds near Chico, reported that Blue Diamond had achieved a new high of more than $1.6 billion in sales during its most-recent fiscal year, while marketing almonds and products to more than 90 countries around the world.
"Worldwide demand remains strong," he said, "maintaining our historic returns."
Jansen noted that the cooperative saw its revenues grow by $200 million, even in a short crop year, by focusing on sales of value-added products.
"Blue Diamond is the unusual food company that is averaging 20 percent growth," Jansen said. "We are really getting near our revenue goal of $2 billion and more importantly, we remain very optimistic on the future growth prospects of almonds."
The cooperative's leaders also cited its efforts to develop new products and its investments in new processing facilities as key factors in its results.
"With our Almond Innovation Center creating an unending stream of new almond products, Blue Diamond is in fact the industry leader in developing new products, new markets and expanding the use of almonds," Cummings said.
At some point the drought will end, almond supplies will grow and prices will fall, he said, and when that happens, "Blue Diamond will be ready to seize the opportunity with innovative, new products, expansion into new markets and smart, highly visible promotional programs."
In recent years, the cooperative has focused on expanding its Blue Diamond brand of products such as its nondairy beverage Almond Breeze, crackers and new flavored snack almonds; Sriracha-flavored almonds were added this year. It has also worked to export those products to buyers in additional countries.
"International retail is our most rapidly growing business," Jansen said.
During the past five years, Blue Diamond said it has begun projects and upgrades to expand total capacity and develop new value-added almond products. The company completed the first phase of construction of a new manufacturing and processing plant in Turlock in 2013, and plans additional expansion during the next few years.
Last week, the company's Salida facility unveiled a new warehouse designed specifically for nonpareil almonds.
Hosting a bus tour of the warehouse, Blue Diamond maintenance supervisor Eric Tualla said it features an automated design with sloped floors, which allows almonds to move into the plant "so that no man will touch the product"—a design intended to promote food safety. The new warehouse has a 60 million-pound capacity.
Jason Costa, main production line manager at the Salida plant, noted that upgrades and new and gentler equipment in the main production line have resulted in less almond breakage. Total capacity for the Salida plant is 240 million pounds.
Almond grower Chris Morgner of Chowchilla took a virtual-reality tour, donning a headset that allowed him to see how almonds flow into the plant.
"It was pretty realistic and it is a nice way to get a look inside the new warehouse," Morgner said.
Grower Sonny Johns of Modesto, who attended the meeting with his son Clayton, said he was happy to see that the cooperative is growing for the future.
"It's exciting to see it grow. It's very exciting to be part of Blue Diamond," Johns said.
California farmers account for approximately 83 percent of the world's almond production. Bearing acreage has increased to 890,000 acres. Government estimates put the total California almond crop at 1.8 billion pounds, down 4 percent from the previous year.
(Christine Souza is an assistant editor of Ag Alert. She may be contacted at csouza@cfbf.com.)
Reprinted with permission: California Farm Bureau Federation