MINOT, N.D. — AGT Food Inc. is moving the needle on what can be done with pulse crops.
The company — with North Dakota processing facilities in Minot and Williston and U.S. offices in Bismarck — makes a variety of products from pulse crops, including pulse-based proteins, texturized protein and “veggie crumb,” a coating used as a bread-crumb replacement.
Pulse possibilities seem endless, said Eric Bartsch of AGT’s Bismarck-based division head for global food ingredients. AGT acquires almost all of its grains directly from farmers through new-crop contracts and spot purchases.
AGT’s main crop is yellow peas, but they also buy green peas, red lentils, green lentils, chickpeas and faba beans. They’ll contract this winter for fall production. The pulse crops come primarily from North Dakota, Montana and South Dakota.
The AGT plant has grown to a capacity of up to 140,000 tons of pulse crops every year, which it makes into ingredients, and it operates at near-capacity every year and at times exports a significant amount. To compare, the entire domestic market is 300,000 tons per year market for all pulses, including ingredients. Ten years ago, the entire U.S. market for pulse crops was 20,000 to 40,000 tons per year.
AGT has access to a new Rail Modal Group intermodal port across the street, which could help them in exports.
"Having a consistent supply of containers right in our backyard is absolutely one of the most critical pieces that we need, as a state, to take those products from here to our customers,” Bartsch said.
Saskatchewan native Murad Al-Katib started AGT in 2003. Al-Katib earned a master’s degree in business and worked for the Saskatchewan provincial government, working to promote business investments. In the 1990s, the pulse industry started up in Canada and northwest North Dakota and Montana. Still AGT's president and chief executive officer, he built his first factory at Regina, Saskatchewan.
Al-Katib, whose parents were Turkish immigrants, saw products like red lentils and whole dry peas being exported across the world, where the value was added. He started his own company and attracted investment from Arbel Group, of Mersin, Turkey, a company that then was the largest red lentil splitting company in the world.
Pulse crops have been around since the Stone Age.
AGT eventually developed a Minot location, which had been the site of earlier efforts to build a lentil-splitting plant. It was a single empty building and eight exterior bins. They shipped their first product from the facility in June 2013.
Initially, AGT’s pulse product growth came from the pet food market.
“At the time there was really a drive from consumers for what they called ‘grain-free’ diets,” omitting corn and soy and wheat, Bartsch said.
AGT built their plant using concrete construction, making it easier for standards looking ahead to human food markets.
“We knew that the (human food) market was there, but at the same time we were making a multimillion-dollar bet that the market was ready for these products,” Bartsch said.
AGT first cleans the products and uses a mechanical process to peel the pea and “split” it into the dicotyledon halves. Then they separate protein from the starch and concentrate the constituents for their nutritional benefits, and distribute them into different markets.
Protein can be used in pet applications, increase protein levels in human food, or increase the “functionality” — for things like ‘expansion,” egg replacement or texture. Starch fractions go into pastas or snacks.
Initially, AGT’s volume of sales for pet food was 70% to 80% of its production.
Today, the food market has caught up. To spread market acceptance in the food market, AGT officials had to go on what Bartsch recalls as a “road show” to demonstrate the food benefits. Starting in about 2013 to 2014, food companies developed food products, and many of those have taken off in the past two or three years.
Some customer companies are cost-conscious and focus on yellow peas. Each can carry unique benefits and color.
“It comes down to labeling. What do they want on their label? Are their consumers more agreeable to buy it if it says chickpeas, or lentils, or yellow peas on it?" Bartsch said.
The AGT Minot plant is large enough today, but could expand beyond the existing facility. They’ll add equipping within the facility. AGT’s goal is to make foods consumers eat every day more nutritious and tasty.
Bartsch said he sees more pulse-based dairy-free beverages that weren’t on the scene a decade ago.
Besides functionality, customer companies are interested in farmers and how they grow pulses. They want to know how pulses fit into crop rotations, and with no-till techniques.
“A lot of food companies see that as a ‘sustainability’ story. They all have sustainability goals and guidelines,” Bartsch said.