Simplot bows out of fresh spuds market - The Packer

Simplot bows out of fresh spuds market

09/04/2002 12:00:00 AM
Todd Foltz

(Sept. 5) IDAHO FALLS, Idaho — When Eagle Farms Inc. finalized its purchase of J.R. Simplot Fresh Produce Co. July 1, an era in the fresh market potato business came to an end.

Simplot, a company that got its start in fresh potatoes and made it big in processed, finally left the fresh potato market entirely.

Neither Simplot nor Eagle Farms released terms of the deal. Newman Giles, president and owner of Eagle Farms, also owns Roberts-based Eagle Eye Distributing, a shipper of potatoes, onions, tomatoes, cucumbers and hydroponic fruits and vegetables. Eagle Eye also has offices in Nogales, Ariz.; Visalia, Calif.; and Clearfield, Utah.

Michelle Green, controller for Eagle Farms, said the company bought Simplot’s fresh operations to expand its potato sales.

“They (Simplot) didn’t want in the fresh pack side anymore, and this was a good opportunity,” Green said.

Fred Zerza, vice president of public relations for Simplot, said the fresh market was no longer a focus of the company.

“We did decide to exit the fresh market to focus on our processed operations,” Zerza said. “Fresh wasn’t part of our core business.”

Simplot, a $2.8 billion company based in Boise, now organizes its business into five major groups, including food, land and livestock, agribusiness, turf and horticulture and corporate affairs. Its foods group now processes, packages and delivers frozen potatoes, vegetables, fruit and avocado products. It offers more than 120 varieties of french fries, with the bulk of them marketed at McDonald’s, Burger King and KFC.

The Idaho Falls fresh operation purchased by Eagle Farms had been Simplot’s sole fresh operation for the past five years.

“We sold a similar operation in Aberdeen, Idaho, about five years ago,” Zerza said. “Prior to that, we sold another one in Burley eight to 10 years ago.”

Zerza said the departure of Simplot from the fresh market was of some historical significance, given how its founder, J.R. Simplot, got his start.

“At one time, he had packing and shipping operations throughout the Snake River Valley,” Zerza said. “But now, the fresh market doesn’t fit our strategic plans.”

The sale of its final fresh market operations comes a couple of months after Simplot distressed Idaho potato growers by massively reducing the amount of potatoes it contracted for processing. In late April, Simplot told growers from the Heyburn, Idaho, area that it was cutting back its orders of potatoes for french fries to less than 40% of last year’s contracts. After growers reacted with worry, Simplot agreed to contract for 60% of last year’s volume.



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