A group of Glenn County, Calif., walnut growers are determined to prove the skeptics wrong.
Nine northern California walnut growers saw the need for a premium walnut processing facility in Glenn County. Permits in hand, they began pouring concrete in April 2012. Five months later they were receiving product.
“Our initial $15 million phase was put in debt-free,” said Tim Merrill, marketing and sales manager for Omega Walnuts. “That’s how committed our owners were to this project.”
Merrill was hired by the ownership to design the state-of-the-art facility from scratch.
Merrill’s own management company – Omega 3 Walnuts – is named after the healthy fatty acid walnuts produce and because Merrill saw the opportunity “truly as a gift from above.”
The name choice of the new walnut company – Omega Walnuts – was the sole decision of the ownership group, Merrill said.
Partners in Omega Walnuts are all growers of diversified crops in Glenn County. They are: Michael and Kerry Billiou, Chas Demmer, Gary Anderson, Matt Southam, Todd Southam, Keith Larrabee, Scott Larrabee and Eric Larrabee.
“When I got here this place had 200 goats and 50 corrals on it,” Merrill said.
Planning for the project started more than a year ahead of when the first concrete was poured, he said. Merrill praised the local planning and permitting process for its speed of approval. The company has all of its expansion plans approved by Glenn County and merely needs to acquire the proper permits for future construction.
“I’ve been in the walnut industry a long time,” Merrill said. “I’ve seen most of the facilities in the North State in the past 30 years, and I’ve had a chance to walk through most of them.
Merrill continued: “We truly have something special here. We took a very aggressive approach, bought the most sophisticated equipment we could find, and used our experience to develop a premier facility.”
Merrill’s optimism was not initially matched by some area growers, who could not believe such a facility could be built in such a short time, much less so such quick success.
“There was a lot of skepticism in the north state,” he said.
That skepticism did not deter the ownership, and certainly did not slow Merrill from building a team of individuals to operate the facility.
Merrill is confident the company will overcome the naysayers and early skeptics. He plans to do this through an open-door policy of plant tours and demonstrated success.
“You get people in here to see that you’re not a fly-by-night operation,” Merrill said. You do this by making a serious commitment to markets and transparency.”
Eventually, Merrill says growers shipping to Omega Walnuts will begin to share their own success stories with others and that skepticism will be overtaken by optimism and a desire to be a part of a growing success story.
“This year we did a little over 11 million pounds,” said Merrill. “We are projected to do well over 15 million pounds next year.”
At full capacity Omega Walnuts will process 100 million pounds of walnuts. Merrill says growth in the industry and demand for premium walnuts primes the company for success.
Key to this success, according to Merrill, was hiring a good plant manager.
Merrill hired Jake Cecil to manage the facility. Cecil comes from a walnut background and has worked in the past with Merrill as a farm manager. Aside from managing Omega Walnut’s plant operations, Cecil and his wife, Colleen, are busy planting new walnut orchards in the area.
“He is a very gifted individual,” Merrill said of Cecil.
According to Cecil, the processing facility was designed with efficiency of energy and labor in mind. The entire 38-plus acre parcel is wired and ready for three additional tank farms and several more buildings to house additional processing equipment as the company expands its processing capacity to 100 million pounds within the next several years.
“Everything here is ‘plug-and-play,’ meaning we have the pad and electrical conduit in place for the next tank farm,” Cecil said.
Pointing to the current tank farm and processing sheds, Cecil said “this will be replicated three more times out here.”
“Everything we’ve done here is in preparation for more expansion,” Cecil continued.
The large tank farms include various size tanks, which allow Omega to quickly receive walnuts and segregate them without co-mingling walnuts from different growers. Also different from other walnut operations, Cecil said Omega hired the Sacramento-based Dried Fruit Association (DFA), a third-party food inspection company to conduct all the receiving sampling and testing of walnuts in the facility.
“We wanted an arms-length relationship here,” Cecil said. “We want our growers to have an objective third-party inspecting their receiving samples.”
Omega’s commitment to excellent can be seen throughout the facility, from its state-of-the-art processing equipment that includes color sorters, X-ray machines and metal detectors, to its employment of DFA inspectors as an independent arm of its food safety efforts. This and the company’s commitment to seeking growers of quality walnuts resulted in 100 percent of last year’s loads being packed as a USDA No. 1 product.
“There were no commercial grades,” Merrill said. “Again, that is a compliment to our grower base.”
Their commitment to excellence can also be seen in the layout of the property and in the architecture and entry from the county road onto Omega’s property. When complete, the parcel will include 20 acres of walnuts along the north and east sides of the property.
Walnut popularity increasing
Omega Walnuts is located several miles east of Orland, a small community in the heart of northern California’s Sacramento Valley. Walnuts are a popular crop in Glenn County, and in neighboring Butte and Tehama counties.
Combined, the three counties produced nearly 161,000 tons of walnuts on more than 79,000 acres in 2012. Leading walnut producing counties in California include San Joaquin, Butte, Stanislaus, Sutter and Tulare counties. Statewide walnut production in 2012 totaled about 470,000 tons on about 245,000 acres.
New planting strategies that include more trees per acre are largely responsible for greater grower returns, Merrill said. Omega Walnuts intends to capitalize on this and improved demand for premium walnuts worldwide. Given that and the company’s quick construction and start-up, Merrill is pleased with their 2013 numbers.
“There’s truly a global demand for walnuts,” Merrill said.
There is plenty of optimism within the market as growers throughout the state increase their walnut acreage. Opportunities for northern California walnut producers continue to be quite good as land prices are more reasonable than elsewhere and water availability tends to be better there than in other parts of the state.
Omega’s mission is simple: maximize grower returns. Omega Walnuts’ growth strategy includes seeking growers of quality walnuts to build on those returns and help the company capitalize on marketing opportunities within the industry.
“We have tremendous upper-end markets,” Merrill continued.
Omega’s walnuts are currently marketed around the globe, with buyers in Japan, Korea, the Middle East, Australia and South America. With more growers agreeing to process and market through Omega, Merrill says the opportunities to fill expanding world markets will continue to grow for the company.
Merrill cites current supply and demand for the recent success of the California walnut industry.
“There is a perceived shortage of supply,” said Merrill. “That and the increased demand for walnuts worldwide is having an upward effect on prices.”
Walnut growers around California are reporting record walnut prices.
Much of the marketing success in walnuts continues to be in the health aspects of the nut, Merrill says. The high levels of healthy omega 3 fatty acids in walnuts are a positive marketing tool.
“Our first payment came out this spring and we were very competitive with the other processors out there,” Merrill said. “None of the others were higher than we were.”