In 2023, leaders of Blue Diamond Growers launched a three-year strategic plan designed to increase efficiencies while also improving return to grower-members. Mid-way through the effort, they’re already seeing the results, but they admit there’s more to do.

“It’s been a tough year, no doubt,” said Blue Diamond President and CEO Kai Bockmann as he led a panel discussion with senior managers at the co-op’s recent annual meeting in Modesto. Bockmann outlined five goals: strengthening the co-op’s value-added businesses, accelerating growth in international markets, expanding food service, innovating new products and doing more with less.

For the 2023 crop marketing year, which ended in late July, Blue Diamond returned an average of $1.83 per pound for Nonpareil and Supareil nut meats. Adding in quality premiums, growers could receive a maximum of $1.97 per pound. Nonpareil is the most widely grown almond variety in California.

Nut meats of other varieties garnered less per pound. The returns don’t include tax deductions for grower co-ops that Blue Diamond passes through to its members or sustainability incentives.

For Nonpareil and Sonora inshell, the co-op returned an average of $1.97 per pound with a maximum of $2.07 per pound with quality premiums.

“The return was lower than what we would like but better than many expected,” Bockmann said. Although he said he was not satisfied with the return, he noted it was a difficult year.

“We had to find efficiencies and do more with less,” he said. “We had to right-size the business and make cuts in some areas in order to fund activities in other areas with greater potential.”

USDA in July issued its 2024 objective almond estimate of 2.8 billion pounds industrywide, which has brought stability to the marketplace, said Ben Goudie, Blue Diamond director of member relations. The co-op’s internal estimates continue to track close to that.

Several growers attending the annual meeting said they were encouraged with the size of the 2024 crop as it hung on trees before harvest. But once it was delivered to handlers, the overall weight came up light. Many of those same growers blamed the July heat wave for shrivel as well as lighter-weight kernels.

While navel orangeworm (NOW) damage decreased in 2024 from the disastrous 2023, Goudie said NOW rejects still appear to be the second worst in several decades, surpassing the “train wreck” season of 2017. Rejects from brown spot and gumming, caused by plant bug feeding, are on the increase though still not the magnitude of NOW.

New partners

One of the co-op’s core businesses is its branded almond snack line. While Blue Diamond continues to lead in that market, inflation’s impact on consumer spending has definitely been felt, said Carmen Bourgaize, chief commercial offer.

“The market is tough out there, to be fair,” she said. Retail food prices have climbed an average of 20% since the pandemic, which means consumers either must spend 20% more for the same shopping cart or put 20% less food in their cart.

As a result, consumers are reducing discretionary spending, and that includes plant-based foods and snacks. Blue Diamond’s new consumer campaign aims to drive sales in new ways.

The co-op, for example, has partnered with fresh produce grower, marketer and distributor Oppy to position an array of new almond and almond-dried fruit blend snacks in the produce department. The new products are likely to begin showing up in January and February.

Blue Diamond debuted the line at the International Fresh Produce Association Fresh Summit annual trade show in Atlanta in October, when it handed out about 25,000 samples to rave reviews.

Grocery shoppers typically start in the produce department, then work their way around the store. The goal is to capture sales when their carts are empty and their wallets are full, Bourgaize said.

In addition, Blue Diamond also will launch Almonds and More mixed nut products early this year.

Doubling Down on Export Markets

In international markets, the co-op for years had focused on the ingredient business. The effort has expanded to a two-prong approach that also includes boosting sales of its branded snack nuts and Almond Breeze beverages, said Tony Laurenzana, vice president of international trade.

Frequently, marketing internationally involves partnering with a local processor or distributor. In the case of Japan, Blue Diamond teamed with Kagome, a major food processor that also has processing tomato facilities near Los Banos, on Almond Breeze.

“They proved to be a better and more flexible partner,” Laurenzana said. “They really want our business and have made concessions for more business.”

Closer to home, Blue Diamond continues to work to increase almond consumption in Canada, where there’s “a lot of growth happening. We’re right on track to hit strategic growth of 30%,” Laurenzana said. Eventually, the co-op wants to sell as many almonds per capita in our neighbor to the north as it does in the U.S.

The strategy involves having the right product line and correct price point as well as developing custom flavors for the Canadian pallet. In addition, Blue Diamond is courting more retailers from large chains to convenient stores to handle its products.

Lessons from the Pandemic

Learning from logistic issues experienced during the pandemic, the co-op has diversified its shipping and warehousing to become more agile, said Steve Shult, vice president of global supply chain. This allowed Blue Diamond to remain nimble even during port strikes along the East Coast, the Canadian rail strike and the Middle East conflict.

“Volatility is the new reality,” Shult said.

Blue Diamond has always shipped out of the port of Oakland, which continues to remain its top export outlet. As part of a five-port strategy, the co-op added Los Angeles, Long Beach, Houston and Norfolk, Va.

“Supply chain is absolutely a critical part of our strategy,” Bockmann said.