Building a Foundation of Core Values - Blue Diamond Growers

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					                           Building a Foundation of Core Values:

By Gray Allen
A Foundation for
Nutrition is Laid
In just its second year, the
California Almond Growers
Exchange (now Blue Diamond
Growers) set out on a course that
has defined it ever since: innovation
in all things that lead to higher       Such fresh thinking along with a long-range vision
sales, lower costs, superior            for what the California and worldwide almond
quality and market leadership.              industries could become powered the
   In 1911, even with a small              association from its inception. During its first
crop that was selling well,                  two decades, Blue Diamond went where
T. C. Tucker, sales manager,                       no other almond marketer had gone
proposed a marketing idea                           before. It expanded the market for
that he believed could                              California almonds; pioneered an
help stabilize the almond                            industry-leading processing and
market from year to year,                            manufacturing facility; experimented
regardless of crop size.                             with new products, packaging and
He suggested developing                               market channels; and developed a
a branded consumer                                  relationship with state and federal
package of inshell almonds                       government officials that served the               T. C. Tucker with Harry S. Maddox, California
to be sold directly to                           cooperative well on issues of importance to                  State Director of Markets
department stores “to                           the membership.
increase demand for                                 In hopes of improving member returns for the long term, the association’s board of
California almonds and to                     directors authorized Tucker, who had become general manager, to buy a shelling machine,
standardize the price to                        a parcel of land on C Street in Sacramento,
growers and consumers year                     and to build a shelling plant to be ready for
in and year out.”                               the 1914 crop. Tucker believed high-quality
   Tucker’s idea launched the                  shelled almonds could be sold for a premium
Blue Diamond Brand and a retail                  on the east coast. He also thought that by
program that to this day adds an                 shelling a significant volume of almonds he
ever-growing margin                                 could a help stabilize pricing of inshell
to members’ crop                                       almonds. The one-story building had
returns, while building                                    been designed with expansion in
consumer awareness                                           mind with a foundation that could
of almonds and the                                           support a four-story building.With
brand.                                                       that development, Blue Diamond had taken the first step toward becoming the
                                                             world’s largest, most sophisticated processor of almonds.
10 May | June 2010                                                                                                                 Almond Facts
                                  Innovation an d Nutrition
                                                                       late 1920s, the marketing and manufacturing staff experimented
                                                                       with processes and packaging for products that would appeal to
                                                                       candy, baking and ice cream manufacturers, as well as consumers.
                                                                       The association not only pioneered sales to those markets but
                                                                       also created innovative products to expand manufacturers’ use of
                                                                       almonds. Told by many that
                                                                       California almonds could not
                                                                       be satisfactorily blanched and
                                                                              salted, Blue Diamond
                                                                                   proved them wrong
                                                                                   with blanched salted
                                                                                  in tin and glass,
                                                                                 Nonpareil medium
                                                                                in glass, roasted,
                                                                               ground roasted, whole
  In the early years, almonds were strictly a
                                                                             blanched, split blanched,
holiday treat and the vast majority of sales were
                                                                            blanched pieces, sliced
concentrated during that period. In 1915,
                                                                           blanched and sliced
Blue Diamond introduced a novel marketing
                                                                          natural, and ice cream
scheme in hopes of extending almond sales
                                                                         topping. By the end of the
into the spring months. Working with a
                                                                        1920s, the manufacturing department had become Blue Diamond’s
major department store in San Francisco,
                                                                       largest customer for shelled almonds.
Tucker created elaborate window displays, advertising
                                                                          Blue Diamond also pioneered quality grading, setting up a formal
and samples to attract consumers in March. A great success, the
                                                                       system in the early 1930s. Later, it used its proprietary grading
promotion was repeated in following years with sales growing year
                                                                       techniques and equipment developed on the spot by the association’s
by year. It evolved into a Blue Diamond nationwide advertising and
                                                                       staff to salvage salable
promotional program that focused on lengthening the sales and
                                                                       meats from the 1938
consumption period for almonds to move mounting surpluses.
                                                                       crop that had been
  New products and innovative manufacturing capabilities further
                                                                       seriously damaged by
expanded the market for California almonds in the 1920s. Blue
                                                                       peach twig borer. Over
Diamond, unable to find specialized equipment to manufacture
                                                                       seventy percent of the
some of the new products it had developed, invented the necessary
                                                                       damaged material was
machinery and processes,
patented them, and
                                                                          That same year, Blue
introduced a string of new
                                                                       Diamond ventured into
products to buyers and
                                                                       the European market.
consumers. Among the
                                                                       A short crop there
novel machines designed
                                                                       opened the door to California’s surplus almonds. The cooperative
and built in the 1920s by
                                                                       tested the market with a small shipment, found a good reception and
Blue Diamond staff were a
                                                                       discovered that some buyers preferred the California nuts because
scalder, grader, cooker, and
                                                                       of the soft shell and high quality. This sale set the stage for rapid
gum application and salting                 Cracking Machine
                                                                       expansion of export markets following World War II.
equipment. Previously, Blue Diamond had been granted patents
                                                                          One of Blue Diamond’s most successful innovations, that prepared
for an improved cracker, Lodi bleacher, Pierce Revolving Steamer,
                                                                       the way for tremendous growth in consumption worldwide in the
Pierce Bleacher, Fowler-Caulfield Bleacher and Kimber Separator that
                                                                       decades to follow, occurred beginning in 1940. Needing a way to
graded meats.
                                                                       win back customers lost to high prices following two short crops , D.
  As crops continued to expand beyond current consumption levels,
                                                                       R. Bailey, general manager, took advantage of the U.S. government’s
Blue Diamond turned its creativity to new uses of almonds. In the

Almond Facts                                                                                                               May | June 2010 11
                     Building a Foundation of Core Values:
New Deal program to improve nutrition                                       faster packaging
in America. Bailey believed that                                            machines, new
“tremendous benefit can be obtained                                         roasting and drying
from the widespread dissemination of an                                     equipment, and bulk
almond nutritional story.” Blue Diamond                                     delivery and storage
had used the nutritional story in a modest                                  revolutionized
way in years past to promote almonds, but                                   almond processing
the science of nutrition had evolved and                                    and handling.
new studies were needed to update the                                          In the 1960s, Blue
nutritional story on almonds. Blue Diamond                                  Diamond pioneered
engaged the California Foods Research                  D.R. Bailey          almond paste and
Institute to make a complete analysis of the                                almond flour, two
nutritive values of almonds, which determined that almonds are rich         important ingredients for food manufacturers to build their product
in vitamins, minerals, protein and energy-producing fats -- among           lines upon. The association also offered buyers over 40 blanched,
the most important elements in a healthy diet. Blue Diamond took                        sliced, diced and roasted items, all produced with
the story to the media, cooking schools,                                                equipment and processes developed by Blue Diamond
nutrition classes all across America, the                                                staff. A revolutionary new shelling system developed and
buying trade, U.S. military, and scientific                                              perfected by Blue Diamond was shared with grower-
publications. Soon thereafter the U.S.                                                    owned hulling and shelling cooperatives to lower
government granted almonds an“essential                                                   their costs and increase the quality of nuts and meats
food” status which gave Blue Diamond                                                       delivered to Blue Diamond.
and almond growers special access to                                                             On the marketing front, Blue Diamond stepped up
materials and supplies during World War II.                                                 its export sales development, opening markets around
The public image of almonds was forever                                                      the world to provide an outlet for ever-increasing
enhanced and the foundation laid for future                                                  crops. A sales coup put Blue Diamond Smokehouse
campaigns based on nutrition.                                                                 Cocktail almonds on every major airline. In the
   The post-war era saw almond production                                                     1970s, the American consumer discovered health
boom as growers mechanized, planted in the                                                     foods. Blue Diamond jumped on the bandwagon
fertile bottom land and added irrigation and                                                   to market its almonds as a health food to cereal
modern methods to their tool kit. To cope with                                                  makers, trail mix and energy bar producers and
the surge of supply, Blue Diamond created                                               consumers directly. Marketing staff opened the fast-
new products and more appealing packaging to build retail sales.            growing food service business to Blue Diamond almonds, selling
One of the most popular and enduring products introduced was the            almonds as a healthful addition to every meal, and introduced new
                                        6-ounce tin of Smokehouse           snack items based on the nutrition message, such as Hickory Smoke
                                        Almonds. To increase sales of       Flavor Dry Roasted Almonds. In 1984, Blue Diamond introduced the
                                        its popular line of consumer        first almond cookbook to be published in the U.S. and in 1982 sent
                                        products, Blue Diamond              Blue Diamond almonds into outer space aboard the Columbia space
                                        started a gift-pack business,       shuttle as a “natural form”
                                        and opened retail stores in         food.
                                        several California cities.             Throughout the 1980s
                                           In the plant, Blue               and ‘90s, Blue Diamond’s
                                        Diamond engineers and               research department
                                        technicians developed               pumped out a string of new
                                        increasingly efficient              snack almonds, and products
                                        equipment and processes             for the food service and
that increased output, lowered costs, produced a steady flow of new         manufacturing trades, all of
products, and raised quality to even higher levels. Electric-eye sorters,   which served to expand

12 May | June 2010                                                                                                                   Almond Facts
                              Innovation an d Nutrition
the market for almonds as bigger and bigger crops poured in from
the fields. Manufacturers worldwide built
product lines around Blue Diamond’s nd’s
   Expanding its market horizons to
special needs populations, Blue
Diamond developed Nut*Thins,
a gluten free snack cracker, and
Almond Breeze, a lactose-free
beverage based on almonds and
rice. Both product lines were hits with the retail trade. As the 2000s
arrived, new emphasis was given to Blue Diamond’s growing retail
                 business, giving rise to numerous new products
                  in the snack and natural foods categories. Snack
                  almonds for different age and ethnic groups were
                              developed with great success in the
                                marketplace, unsweetened Almond
                                Breeze appealed to those who avoid
                               sugar, new flavors of Nut*Thins
                               broadened the line’s appeal. And
                               carefully researched flavors and
                              packaging were introduced to appeal to
                                 With nutrition again top of mind
                           for consumers in the 2000s, Blue
Diamond advertising and product
promotions built around the Heart
Healthy labeling granted by the U.S.
government to California’s almond
industry. Now the brand would be
sold on the basis of taste and smart
                   eating, tributes

                                      to Blue Diamond’s leadership in
                                   innovation at all levels and decades of
                    promoting almonds on the basis of good nutrition
as well as great taste. Consumers worldwide responded, retail sales
doubled and doubled again!
   Meanwhile, innovative products for domestic as well as export
markets, along with more sophisticated processing techniques that
sorted out the best meats for premium sales, elevated product values
in the industrial side of the business. Blue Diamond’s competitiveness
rose to new levels, proof of the bottom-line value of its 100 years of
innovation. .
Almond Facts                                                                 May | June 2010 13

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