NOVEMBER | DECEMBER 2016
Almond Facts
9
Last year, with the market pricing bubble and subsequent
bursting, pricing volatility was four times the normal. We
calculated that a handler selling its inventory only one
month earlier would have gotten a $.20 return advantage.
With our size and business model,
Blue Diamond Growers
must sell throughout the year. Those who attended District
Meetings heard my concern. Fortunately, not only did we
beat every handler, but we achieved a record competitive
return advantage of nearly $.18 a pound! That in the most
volatile year ever,
Blue Diamond
achieved the best competitive
return is testament to our value-added business strategy and
the extraordinary people of
Blue Diamond
. The calendar year
is not complete, but once again your CFO, Dean LaVallee,
estimates that your tax advantages from co-op membership
will be as significant as your competitive return advantage.
It is a universal truth that until something becomes
scarce, we fail to realize its value.
Blue Diamond
members
... Congratulations! You had the vision and trust to join
the
Blue Diamond
co-op. Your
Blue Diamond
membership
is incredibly valuable. Next to your land and trees, your
membership may be your most valuable asset. Every year it
gives you the highest returns in the almond industry.
Margin enhancement, what some might call cost cutting
or increasing efficiency, is the fuel that funds
Blue Diamond’s
growth. There is tremendous innovation, change management
and organizational effort that goes into margin enhancement.
Last year, the team was very productive. They overcame all
challenges to deliver margin savings of $13 million! Each
year we maintain these improvements, so over six years we
have a compounded total savings of over $64 million. This
work has allowed
Blue Diamond
to build new warehouses and
factories, grow marketing investments, develop the talent of
the organization and most importantly, ensure our growers
see the best returns.
We are managing supply, but please know we are still
aggressively growing. Right now, our innovative new Salida
warehouse holds 50 million pounds of your best Nonpareil
almonds. In Modesto, it was front page news and deservedly
so. This innovative design creates the industry’s gentlest
handling, ensuring maximum quality premiums.
In Salida and Sacramento, we increased maximum
processing capacity by more than 50 million pounds each.
At Turlock, we designed and built the first phase, with a
maximum capacity of 89 million pounds. Last year, we
blew away our original expectations and processed over
105 million pounds! For so effectively building our capacity,
congratulations to Brian Barczak and the over 1,300 people
on his
Blue Diamond
manufacturing team.
With our new
Almond Breeze
advertising,
Blue Diamond
created
its 2nd best all-time campaign. By modernizing our classic
“Can a Week” ads, we told consumers that the best almonds
make the best almond milk. And the best almonds come
directly from the best almond growers.
2016 was an Olympic year which means it was the focus
of our marketing and promotion. We sponsored USA
Volleyball and USA Swimming and Diving. This was the
first Olympics where we had advertising spots for both snack
2011
2012
2013
2014
2015
2016
$10.5
Margin Enhancement is Fuel for Growth
Cumulative
Annual Margin
Savings
(Millions)
$34.5M
$42M
$23M
$51M
$64M
2016
+$13M!
