Ahead with reds

BUXTON, N.D. -- It's Christmas, and NoKota Packers Inc. is cranking out the reds, hoping to bring in some green to ring in the holidays.

The reds, of course, are NoKota's famous Red River Valley red potatoes.

Tim Lee, vice president and plant manager, gives a tour at the company's Buxton-based wash plant and says his company is handling more red potatoes than ever before. The company is continuing to thrive with an experienced crew, an expanded sales force, and new grading and bagging technology, as well as a beefed up marketing approach.

NoKota is one of 13 wash plants in the valley. It employs 16 full-time, year-round people including office employees. Another 18 seasonal employees work from Sept. 1 to about the end of April.

The business was started in 1979 by Malcolm Tweten, his brother-in-law, Maurice Gjelsness, and their respective sons -- Steven Tweten and Ron Gjelsness. Steve is the president and sales manager. Ron is in charge of storage and transportation and long-time shareholder Tim Lee is vice president and plant manager, and other family members are now involved.

"We're going full-steam ahead, and we will be until the end of April," Lee says.

Always big in reds

NoKota Packers handled its first crop in 1979. Since then, it has had several storage expansions and additions. This year, NoKota will process about 700,000 hundredweights (cwt.) of potatoes and will pack out 630,000 cwt.

The company acquires potatoes from seven different farming operations. Its largest grower delivers roughly 300,000 cwt., and the smallest brings 40,000 cwt. "In the past, we had growers that brought 12,000 to 20,000 cwt., so the growers are bigger," Lee says. "Today, our smallest grower has 220 acres of potatoes."

The company stores about 550,000 cwt. of potatoes on-site. One grower has an 80,000 cwt. warehouse near Grafton, N.D. NoKota processes another 75,000 cwt. off the field in the fall.

This year "should be the biggest year ever," Lee says, of the processing season. NoKota handled more potatoes in September than it has in other years and handled more acres, as a result of expansion among the growers.

"We try to average 50 semi-loads a week out of this facility," Lee says. "Some weeks we do 40. Other weeks we've done as many as 65 semi-loads." Each semi holds 425 cwt. (42,500 pounds), and on an average day they send out about 10 of them. The bulk of NoKota Packers' products go out under a private label. Very few go out under NoKota's own brand name.

Odenberg Grader

Three years ago, the company installed an Odenberg Grader, which "grades" or sorts potatoes for quality, Lee says. The grader has two cameras that take pictures of the potatoes and sends them to a computer which tells the machine which potatoes to kick out, Lee says. "It takes the No. 2s and culls and grades out for No. 1 grade potatoes.

The company runs about 500 to 600 100-pound bags worth of potatoes through the machine in one hour. "We'll go through and run as much as 5,000 hundredweights in an eight- to nine-hour day," Lee says. "It's got good capacity."

"It's the real deal," Lee says, of the machine, which he says does the work of six to eight human graders. "It's probably 90 percent accurate, and it shows up every day" Lee says.

Still, he emphasizes it takes experienced human graders to do the final grading. "The camera is only two-dimensional, so it doesn't always see 100 percent of the potato," Lee says. "The camera might not detect a bruise, so the machine will miss it and (employees) have to grade it out on their end."

Everything the company bags gets a final grade inspection -- the Odenberg Grader and four graders on the "table." The company has seven packing lines it can pack from, with various sizes and grades.

New year, new crop

Every year, every crop is different, Lee says.

It was dry in August and September during the 2012 harvest, which added to bruising concerns. "If the rains would have come a month earlier, it would have been an awesome crop," Lee says. "If we would have had 2 inches of rain two weeks prior to harvest we would have totally eliminated" some bruising and lumps in the early harvest.

"Luckily we got some rains in October, and the potatoes dug later in the season were definitely better than some of the early-harvested potatoes," Lee says. "It was an average, or a little bit above-average crop: some excellent quality, some fair."

While the volumes have been good, Lee acknowledges that the pricing for red potatoes has been weaker than last year because of abundant supplies. For instance, Idaho planted more potato acres in 2012.

The market price was $10 per cwt., down from about $20 a cwt., the year before. "And we had weather-related problems -- a dry growing year -- so there is extra bruising, expenses are obviously up. It's not going to be a real profitable year for the red potato grower in the valley as a whole this year," Lee says.

Marketing power

NoKota continues to react to market changes with technology and manpower.

In the past two years, the company has added two salesmen -- Mike Rerick, and Steve Johnson. The two salesmen broker the company's own potatoes, plus potatoes from the summer crop in Minnesota. "This past year, they brokered about 550 loads out of Minnesota and they're hoping to expand on that," Lee says. "We're getting more business, and the business that we want."

In the spring of 2012, NoKota became part of Fresh Solutions Network LLC, a marketing, category management and innovation services company.

Started by family-run growing and packing companies in Pennsylvania, Ohio and Washington state, Fresh Solutions Network now also includes NoKota and companies in Maine, Idaho and Canada. Three of the companies in the group together own a state-of-the-art packing facility in Michigan, to pack Michigan-grown potatoes to supply the network partners.

The company's president and chief executive, Sherrie Terry, deals with retail and food service customers across North America on the network's behalf. The network announced the NoKota addition on Aug. 1.

The network allows the member companies that are specialists in a particular potato -- such as reds -- to provide larger customers with a whole range of products, including russets, whites and yellows, and even onions. On the demand side, Terry helps customers analyze their marketing data to help improve performance within and among categories. "All the partners are multi-generational, family-owned growing operations, as well," Terry says.

The network provides "innovative marketing, category management and operational solutions," according to its own description. It also offers "best-in-class category management analytics" and "innovation, merchandising, shopper marketing and other strategic marketing tools."

Customers work directly with "a Network Partner for seamless, yet transparent order management and logistics for the best quality local, regional, national and international product supply and service."

The network connection "doesn't change how we do things -- cosmetically or even internally," Tweten says. "We're still selling to our customers as before, taking care of business as usual. But as opportunities arise where we can, as a group, go after a national chain -- like a Kroger's or Wal-Mart -- it gives us resources to do that."