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100 years of almond innovation.

Their goal in 1910 was straightforward and vital to growers: to bring order and prosperity to a chaotic and often unprofitable almond market. Founded by almond growers as the California Almond Growers Exchange (now Blue Diamond Growers), the co-op propelled California from being a small player in the almond industry into the world's major producer.

Blue Diamond today is a processing and marketing cooperative of more than 3,000 California almond growers with annual sales approaching $1 billion with its products sold in 95 markets around the world.

DEEP ROOTS

California growers first experimented with commercial almond production in the 1840s. By the 1880s, an industry had been born, but too many growers with too many trees and not enough marketing clout yielded them unprofitable results.

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In an effort to gain some marketing leverage, growers tried pooling their crops for sale through local dried fruit associations. But the small associations were no match for the handful of buyers and speculators who played one group of growers against another.

The necessary marketing power growers sought could be achieved by forming a statewide growers' association. On May 6, 1910, in Sacramento, nine local grower cooperatives representing 60% of the state's almond production organized into a single marketing cooperative: The California Almond Growers Exchange.

The first year proved difficult. The Exchange reported: "Growers who were outside (the co-op) came under cover by selling out at prices a little under our quotations. It is regrettable when growers have their output placed so that it competes with other growers."

While others attempted to sink the co-op, the Exchange hired a new manager to travel East to learn as much as possible of the market potential abroad. Meanwhile, the co-op stood its ground with buyers who were attempting to beat down the Exchange's prices.

In 1912, the Exchange introduced what would become one of the world's most widely recognized food brands: Blue Diamond almonds. Four-pound cellophane packages of unshelled almonds were sold in department stores on both coasts.

In the early years, almonds were strictly a holiday treat. In 1915, Blue Diamond introduced a novel marketing scheme in hopes of extending almond sales into the spring months. Through elaborate window displays in department stores in San Francisco, an ad campaign and sample distribution, Blue Diamond was able to extend the traditional sales period and boost almond consumption.

PIONEERING NEW PRODUCTS

From the beginning, the association worked to expand the market for California almonds by pioneering new almond processing and manufacturing technologies.

Told by many that California almonds could not be satisfactorily blanched and salted, Blue Diamond proved them wrong. By 1926, the co-op was offering blanched/salted almonds in glass jars and in tins for retail sale. It also sold roasted almonds in barrels for ice cream manufacturers. By 1928, the product line included Nonpareil almonds in jars, as well as roasted, ground-roasted, whole-blanched, split-blanched and sliced-blanched almonds. It also sold almonds processed for ice cream topping.

High rail freight rates and unreliable scheduling plagued the almond industry from the start. With the outbreak of World War I, those problems became worse. The effort to remedy the situation included the launch of the co-op's government relations program, which to this day helps Blue Diamond Growers to achieve its legislative, regulatory and foreign trade goals.

EUROPEAN BEACHEAD

In 1938, Blue Diamond ventured into the European market, which would eventually grow into the No. 1 export market for California almonds. The cooperative tested the market with a small shipment, found a good reception and discovered that some buyers preferred the California nuts because of the soft shell and high quality.

One of Blue Diamond's most successful innovations occurred in 1940. Needing a way to win back customers who had been lost to high prices following two short crops, Blue Diamond took advantage of the U.S. government's New Deal program to improve nutrition in America.

Blue Diamond engaged the California Foods Research Institute to make a complete analysis of the nutritive values of almonds, which determined that almonds are rich in vitamins, minerals, protein and energy-producing fats. The co-op publicized the story across the nation. Soon afterward, the U.S. government granted almonds an "essential food" status, which gave Blue Diamond and almond growers special access to materials and supplies during World War II. The public image of almonds was forever enhanced and the foundation was laid for future campaigns based on nutrition.

SEEKS MARKETING ORDER

Pursuing all avenues to deal with rapidly growing crops, Blue Diamond lobbied hard for an amendment to the Agricultural Adjustment Act to include almonds. In June of 1949, President Harry Truman signed the bill to make almonds and filberts eligible for federal marketing programs.

Blue Diamond hoped an almond marketing order would enable the industry to bring supply into balance with demand through set-asides and to set import quotas on the flood of cheap almonds arriving each year from Europe.

Quotas were finally approved in 1951, and set-asides as high as 25% of the crop helped balance supply from year to year. Production continued to soar, however, rocketing up 375% in just over a decade.

In the 1960s, Blue Diamond pioneered almond paste and almond flour, two important ingredients for food manufacturers. The association also offered buyers more than 40 blanched, sliced, diced and roasted almond products--all produced with equipment and processes developed by Blue Diamond staff.

On the marketing front, Blue Diamond stepped up its export sales development, opening markets around the world to provide an outlet for ever-increasing crops. A sales coup put Blue Diamond Smokehouse Cocktail almonds on every major airline.

In the 1970s, American consumers discovered health foods. Blue Diamond jumped on the bandwagon, marketing its almonds as a health food to cereal makers, trail mix and energy bar producers and directly to consumers. In 1982, Blue Diamond almonds were launched into outer space aboard the Columbia space shuttle. In 1984, the co-op introduced the first almond cookbook to be published in the United States.

Throughout the 1980s and 1990s, Blue Diamond's research department pumped out a string of new snack almonds and products for the food service and manufacturing trades. All of these efforts expanded the market for almonds as bigger and bigger crops poured in.

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.

As the 2000s arrived, new emphasis was placed on the co-op'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, unsweetened Almond Breeze appealed to those who avoid sugar and new flavors of Nut*Thins broadened the line's appeal.

With nutrition again top of mind for consumers in the 2000s, Blue Diamond advertising and product promotions built around the qualified health claim labeling granted by the U.S. government to California's almond industry. Consumers worldwide responded as retail sales doubled and doubled again.

Meanwhile, innovative products for domestic and 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.

THE FUTURE

Blue Diamond's founders would undoubtedly be amazed to see how the California almond industry has blossomed, and their crop has grown from less than five million pounds in those early years to a crop that now tips the scales at more than 1.65 billion pounds and accounts for over 80% of the world's almond supply.

"In the years ahead, Blue Diamond will continue to develop new products and technologies and use the expertise gained in its century in the business to open new markets at home and abroad for almonds," says Doug Youngdahl, the co-op's President and CEO. "It will do this while ensuring that growers are the major beneficiaries of the value their co-op adds to the crop."

On its 100th birthday, Blue Diamond remains a prime example of what farmers can accomplish if they stand united and invest their resources and time to build a strong value-added business with top-notch management, governed by a board of growers with strong business skills and who never lose sight of their ultimate responsibility to the membership.

Buried waist-deep in their crop, California almond growers were featured in humorous television and print ads asking consumers to buy "A can a week, that's all we ask." The original campaign, which spanned from 1986 through the mid-1990s, brought so much success to Blue Diamond that its slogan has reappeared in recent commercials advertising the new oven-roasted product line."

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by Gray Allen, former Editor of Blue Diamond's bimonthly magazine, Almond Facts
COPYRIGHT 2010 Henderson Communications, LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2010 Gale, Cengage Learning. All rights reserved.

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Title Annotation:THINKING OUTSIDE THE BOX
Author:Allen, Gray
Publication:Agri Marketing
Geographic Code:1U9CA
Date:Oct 1, 2010
Words:1456
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