6
Almond Facts
MAY | JUNE 2016
PRESIDENT’S CORNER
President’s Corner
Mark Jansen
President and CEO
“What Got You Here Won’t Get You There”
– Marshall Goldsmith
Often we can look to history for a repeat of market
conditions. However, the dramatic market correction
from unprecedented high almond prices to more
historical averages represents a “first” for the
industry. In this instance, history was written. We
are entering a new era for almond processing. Here’s
why doubling down on marketing and innovation
investments to accelerate value-added sales growth is
key to our continued success.
In 2010, we were presented with a business challenge –
accelerate sales growth while improving our grower returns
enough to attract additional grower tonnage. And with onset
of drought, we would need to do it with ever-inflating almond
prices in the market. Since 2011 we have delivered on this
challenge by improving our margins, accelerating investments
in future growth, transforming into a value-added almond
business and growing our competitive advantage.
Today we face a new challenge. Crops will be larger
bringing almond market prices back to historically normal
levels. We must grow our value-added sales faster than our
almond handle or we will dilute the competitive return
advantage of
Blue Diamond
. By growing our marketing and
innovation investments, we are safeguarding our ability to
accelerate value-added sales growth while managing our
optimal almond supply.
Blue Diamond
was built for opportunities such as this.
Through the decades, our mix and competitive edge have
moved from growing commodity sales over to the higher
profitability of our value-added businesses. We are prepared
to increase consumption and sales by optimizing our brand
and ingredient offerings while maintaining a stable base of
commodity sales. Managing to this optimal mix will ensure
we deliver on our mission to maximize the returns of each
grower who entrusts
Blue Diamond
with their almonds.
Looking ahead, the 2016 crop appears to be strong and will
likely surpass last year’s production. The Almond Board’s
recent assessment increase was in response to the looming
growth in supply and affirms the need for a full industry effort
to move almonds into market channels. The quickness of this
crop supply increase requires an “all in” team approach.
Blue
Diamond
will be a valuable member of the team. Examples of
our commitment to grow marketing investments have already
begun. We introduced new TV advertising for
Almond Breeze
and we are also committing to significant advertising of
snack almonds during the upcoming Summer Olympics. Our
global ingredients business is securing a steady pipeline for
our high quality almond flour and working with global brand
partners to again make almonds their “nut of choice” in new
and existing products. Exciting opportunities for expanding
Almond Breeze
almond milk,
Almond Breeze Barista Blend
and
snack nuts into food service brands are on the rise.
As we progress into the second half of this decade you will
see our innovative new product development ramp up, our
promotion and advertising of all brand categories increase,
our branded products placed into new countries, and our
expansion into food service products all while reenergizing
our global ingredient businesses.
For many companies, including marketing co-ops, changing
directions is difficult. Successful strategies are often
repeated long past their usefulness, ignoring changes in the
marketplace. It is usually after a crisis of performance that a
real change in direction is implemented. It is my hope that
Blue Diamond
can lead the almond industry in avoiding this
success trap. From a position of strength we are changing our
course to address the dramatic revision in market prices and
the expectation of increasingly larger almond crops. This will
require significant investment with the idea that foregoing a
few pennies today will ensure a more profitable future.
At
Blue Diamond
our intention is to continue to provide
industry-leading returns, but we will not maximize
short-term returns at the expense of long-term demand
generation and its sustainable profitability. We are
optimistic in the future of the almond industry and
energized by the opportunity to lead your co-op. Because
we are proactively managing change, I am confident that
at
Blue Diamond
the best is yet to come.
