Blue Diamond Comes Out of Its Shell

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Steir continues, “They could have squeezed out a lot of smaller companies by dropping their prices, but it would have put the entire industry at risk. They did the smart thing. They defined their pathway and hoped that the rest of the industry would follow. I have a lot of respect for that. We’re holding the line on prices, too, because none of us can stay in business if we don’t.”

Prices topped out in 2005 and almond prices have remained about $2.80 per pound over the past two years despite the record-breaking crops. “That price is right, because buyers are getting a good deal, and it’s allowing us to refill our coffers, which had been bone dry for the years previous,” says Steir. “Hey, I find fault with the way Blue Diamond does business from time to time, but on balance they have been a terrific force for all growers.”

To counter the concept that almonds were a health risk, Blue Diamond commissioned and encouraged a number of studies into the nutritional value of almonds. Independent research done by the American Heart Association and the Mayo Clinic found that almonds may actually lower cholesterol and reduce the risk of heart attacks. They also contain high amounts of healthful fiber. A study published in the Journal of Nutrition found that almonds may help diabetics, and Youngdahl says new studies indicate that almonds may also help prevent Alzheimer’s.

Armed with these findings, the company launched a full-court press. It opened or improved markets in more than 90 countries, including the monsters of potential — India and China. Blue Diamond was instrumental in opening the India market in the 1970s, and India became one of the company’s top five foreign customers.

FIRST INDIA, THEN THE WORLD

However, in 2003 the Indian government declared the California almond growers’ use of the fumigant Phostoxin a health hazard. With India consuming about 50 million pounds of California almonds annually, the loss of the market would have hurt badly. Blue Diamond went to work. It secured a grant from the U.S. Department of Agriculture to develop a research plan to study the effects of Phostoxin. The study, approved by the USDA, indicated the fumigant was not dangerous to human health.

Today, California produces 82 percent of the world’s almond crop. (Spain is next at 5 percent.) Western Europe, Russia, Brazil, China and India are big consumers, but Eastern Europe and Asian markets such as Korea are coming on fast.

“Our foreign markets are vital,” says Youngdahl. “But most of us here feel we’re only scratching the surface. The U.S. is still our primary customer base, but the potential of the foreign markets is obviously very large.”

The company’s final move was to automate the huge Sacramento processing plant. State-of-the-art metal detectors are everywhere, as are the computerized control panels that monitor the high-speed machinery. Gone are the more than 1,000 employees who used to do this work. Now, nearly 700 workers don their earplugs and enter the processing plant each day.

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