Minnesota Soybean Business

Rising Sun

March - April 2018 by Drew Lyon

SunOpta, a global organic and nongenetically modified specialty food company, was built with organic soymilk. “We got into this because of soymilk,” says John Ruelle, the company’s longtime senior vice president, during a tour of SunOpta’s Hope, Minn., facility. “That’s the foundation of what SunOpta is today. We think we’re a large fi sh in a small pool in the specialty market.” The company’s Hope location handles a signifi cant amount of organic corn and soybeans that doesn’t even touch the facility.

“We source all the way down to Arkansas and up to Canada, but we’re situated heavily in Minnesota and Iowa,” Ruelle says.

SunOpta works with about 5,000 growers throughout the world, including 16 states in America. “We like to manage turnkey from the farm gate all the way to the store shelf,” Ruelle says. “That starts with having a direct relationship with the growers.”

Minnesota is SunOpta’s second largest organic soybean producer. In 2017, Minnesota’s organic soybean growers harvested nearly 23,000 acres, accounting for more than
10 percent of the nation’s organic soybean production. Soybeans make up about two-thirds of the Hope facility’s production; corn takes up one-third.

“Soybeans are the number one plant-based source of protein as far as effi ciency,” Ruelle says. “They have the lowest grams of protein per-dollar of input, per-gallon of water. It’s the unicorn source of plant-based protein.” SunOpta has 26 facilities around the world, has 2,200 employees, is a publicly traded company and works
with some of the largest grocery retailers in the country (Walmart, Albertsons, Kroeger, etc.). “You’re far more apt to see our products in Whole Foods than a traditional grocer, but all the traditional retailers are trying to fi ll that organic demand, too,” Ruelle says. “For example, we focus on the stuff that’s made out of real fruit —it’s only about a tenth of the market, but it would be in your ‘premium’ section.” Ruelle oversees a footprint of locations throughout North America. Th e company has deep roots in Minnesota; it was founded by a group of Minnesota farmers and through a series of mergers and acquisitions, the organization changed its name to SunOpta in the late 1990s.

“This facility was bought so we could get into soybeans and then they bought a facility in Alexandria, Minn., where we could turn the soybeans into the liquid that would make soymilk and a packing facility to put the soymilk,” Ruelle says. “Th at’s our business model – farm gate, get the raw material, turn it into an ingredient and put it into a consumer package.”

The organic food market in America has been growing in recent years, and now retains around 14 percent of the market share. Th ose numbers, Ruelle believes, are continuing to move in a upward trajectory. “We have been doing this since before it was a fad,”Ruelle says. “But we don’t think it’s a fad. We think it’s a trend.” Ruelle believes SunOpta is well-positioned for shifting buyer attitudes by looking through the eyes of the consumer. The younger consumers of today, Ruelle says, will be making food decisions for their families in the near future.

“Consumers today read the ingredients, they want to know what’s in their food, they read the nutritional profile,” he says. “They look for frontal label claims – they want to see the USDA organic on the labels, or that it’s non-GMO; then they perceive it as being healthy and good for you, and that’s clearly a trend for the younger generation.” A link in the supply chain Demand for non-GMO products has been a governor for growth, Ruelle says. SunOpta has long been active
marketing non-GMO and organic foods in Japan and Southeast Asia, but the palate profile in Asian markets
differs from the American consumer’s tastes.

“We understand what genetics are going to produce the best product for the end customer need, and that varies in different parts of the world,” he says. “In America, we want to see our soymilk white and with as much milk as we can. In southeast Asia, they like the bean-ness and a bit more yellow product.”

Even just four years ago, he didn’t even have a spec sheet for non-GM soybean oil in the United States because of a dearth of demand and familiarity.

“I think it comes down to education. Customers are confused,” Ruelle said. “It kind of drives me crazy when I see a product that says ‘USDA organic’ and then ‘non-GM.’ I don’t think consumers understand the difference between organic and non-GMO – they think non- GMO is almost organic and it’s just not true – but at the end of the day all of us in the supply chain are here to supply the consumer what they desire.”

SunOpta has a strict protocol for accepting organic soybeans at its Hope facility. Firstly, their growers must complete three crop cycles before becoming certified organic, but SunOpta also works with them during the transition process.

“Nothing passes our scale unless the guys probing the truck approve it,” says Jon Meyer, SunOpta’s plant manager. “They’re running test strips for pesticides. We’ll know before it leaves the scale if it’s organic or not. We are dedicated to handling organic or non- GMO.”

Education and “level playing field” economics are paramount to sustaining growth in the organic food industry, Ruelle says.

“As an industry, we just need more growers to understand the growth, especially with commodity prices where they are,” he says. “When you get into specialty crops, it’s a game changer. But we know how to do this because we’ve been doing it for decades, and we know what genetics process well and meet consumer profiles.”

Minnesota is a leader in organic soybean production. In 2017, Minnesota harvested nearly 23,000 acres of organic soybeans.


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