Sophisticated supply management makes Black Gold a hot commodity
One afternoon this past summer, Gregg Halverson, who under routine circumstances is too busy to contemplate meals, sat in his office at Black Gold Farms world headquarters in North Dakota and pondered the question: Can you eat potatoes every day? A person could have hash browns for
breakfast, chips at noon and mashed potatoes for supper, he decided.
"I bet I eat potatoes, in some form, every day," Halverson muses. "Why wouldn’t you? They’re so good."
Ever the potato spokesperson (he signs his e-mail with the signature line "Have you enjoyed a potato today?"), Halverson is pushy about potatoes while remaining incredibly humble and lighthearted about life. He is known for a perpetual smile under his white mustache and a
jolly handshake. Employees light up when he enters a room. He can talk farming or football with anyone, from his top managers to the secretary minding local trucking logistics.
Black Gold Farms
But his affable personality belies a keen business sense. Halverson’s farming career has spanned fivedecades, in which he’s gone from just getting by to becoming the nation’s largest fresh crop producer of chip potatoes. It’s one of the reasons Gregg Halverson was named our 2012 Top Producer of the Year. Black Gold now farms more than 20,000 acres of potatoes from Texas to Florida and up into Indiana and Missouri. The company grows potatoes for chips but also produces table-stock potatoes, sweet potatoes and peanuts. Black Gold is one of Frito-Lay’s largest suppliers.
Seeds of Growth. Halverson’s grandfather planted his first potatoes in 1928 on what is now the home farm near Forest River, N.D. His idea was to sell seed to other growers in the emerging potato business in the Red River Valley. Twenty years later, the family converted the business to a table-stock operation and subsequently started producing potatoes for the potato chip trade.
By the time Halverson was in high school, the family farm had incorporated into Black Gold Farms. Black represented the color of the Angus cattle they raised and the ebony soil of the Red River Valley; gold represented the color of the potato skins and the hoped-for relative value of the cattle. In 1985, the family dispersed its cattle herd and got aggressive with plans for the chip potato business. That year, they formed Black Gold Potato Sales, which is the marketing, transportation, quality control and service team. "This was a strategic move to align ourselves more closely with our customers," Halverson says.
The family started its first longdistanc potato venture in southeast Missouri. Today, with 11 individual farms in 11 states, Halverson uses regional differences to hedge his production bets. For example, as his Maryland farm finishes up potato harvest, his Michigan operation is just getting started. With substantial growth spanning 25 years in geographically diverse operations,
Black Gold Farms put into place extensive standard operating procedures (SOPs). These SOPs enable each location to replicate systems that are performed at the other locations, producing consistent, reliable results for customers.
Leadership with Customer Focus. An eye for opportunity has kept Halverson a step ahead of the
competition. One opportunity to enhance Black Gold’s leadership position was to add table-stock
potatoes for the food service and retail markets. This expansion goes in hand with Black Gold’s vision statement: to be the premier potato production, sales, service and quality organization in the world.
"Everything that Black Gold does is in answer to customer needs," Halverson says. For example, the formation of Black Gold Potato Sales as a business unit specializing in marketing, transportation, quality control and service allowed the production teams to focus on growing the best crop, while the sales division focuses on selling the crop and maintains, develops and nurtures relationships with customers and other stakeholders.
Through working with highly sensitized food customers in the chip business, sustainability has become a core component of Black Gold’s sales and marketing. Halverson talks about maintaining a three-legged stool of environmental, social and economic sustainability in order for Black Gold Farms to be successful.
"Customers are demanding that their suppliers be sustainable. While we always believed internally that this is the way to farm, we made it a goal that we continue that leadership position in the potato industry," Halverson says. Black Gold Farms has invested heavily in research and technology. Many of the SOPs in place are dedicated to energy usage, water management and lessening the company’s carbon footprint while producing more potatoes per acre.
Still, Halverson isn’t afraid to talk about profitability: "Black Gold Farms needs to be economically successful in order to hire and retain the best people. Our customers and our suppliers must be profitable to stay in business as well."
"If you can manage
through tough times, it makes you better during years of prosperity."
Not every year has been financially successful, says Halverson’s banker Barry Medd, vice president at First State Bank in North Dakota. For instance, expansion into various states has been a defining feature of Black Gold Farms, but not all its endeavors have proved to be fruitful. Every input imaginable increases along with the size of the operation, Medd notes, and that can make for some lean years.
"Yet Halverson has used those years of adversity to make his company better. If you can manage through tough times, it makes you better during years of prosperity," Medd adds.
During the past 10 years, four of Black Gold’s locations have had to be discontinued, for various reasons.
"The decisions to shut down an operation have always been difficult. However, they had to be made for the betterment of our customers," Halverson says.
"Sometimes the experiences of a tough business deal make me look at things through a different lens," he says. "Although we do not like to discuss the option of failure in a project, many times the decision to bail is the best decision, no matter how thoroughly the project was thought out."
Halverson also has suffered personally. He was married for more than 26 years to Linda, who unexpectedly passed away in 1999. She was an integral part of the success and growth of Black Gold Farms as a business partner, as well as a mother to their three children, school board member, and church and community leader. After Linda passed away, Halverson used his grief as an impetus to take everything she had contributed and grow it further. Black Gold’s total annual sales have grown from $4 million in 1991 to more than $100 million in 2011.
Bring on the Kids. Black Gold is a fourth-generation farm, and the original farm in North Dakota has been passed down through all four generations to its current ownership by Halverson’s children: John, Eric and Leah. In 2003, Halverson and his children formed a separate company,
Halverson Family Investments (HFI), which purchases and owns the buildings and land that Black Gold Farms uses. It is owned as an equal partnership, 25% each by Gregg, John, Eric and Leah. HFI owns land and buildings in North Dakota, Georgia, Florida and North Carolina.
"Success, from a succession planning and family life point of view, was nurturing my children through the different phases of the growth of Black Gold Farms," Halverson says. "When my wife unexpectedly died, I did a lot of soul-searching, from both a business and a personal vantage point. I had three offspring to mentor, teach and prepare for life."
More than anything, Halverson loves having his kids involved in his passion for producing potatoes and providing good customer service.
"There has to be some fun to business, or it isn’t worth the risk." So says the smiling man who for two years has chaired an annual weeklong event called "Potato Bowl USA" at the University of North Dakota and who founded "French Fry Day," which annually celebrates the popular food
by creating the largest single serving of French fries in the world.
For this top producer, life is good—like a never-ending bowl of potato chips.
ALL THINGS AT ONCE
As the Halverson family works through their succession plans, (from left)
Eric, Leah Brakke, Gregg and John find value in open, honest discussions.
Family First. All three of Gregg Halverson’s children are actively involved in Black Gold Farms on a day-to-day basis. John is vice president of operations, and he and his wife, Angie, live in Arkansas with their three daughters. Eric has been promoted to executive vice president and will eventually take over as CEO; he and his wife, Yvette, live in North Dakota. Leah Halverson Brakke is marketing specialist for Black Gold and lives with her husband, Aaron, and their daughter in Fargo, N.D.
Find a Mentor. Halverson has had several mentors throughout his career, including numerous alumni of TEPAP (The Executive Program for Agricultural Producers), under the leadership of Texas A&M University economist Danny Klinefelter.
Community Matters. Halverson has always been involved in his local Forest River community, and he encourages each of his 11 farm locations to do what they can to improve their community. "The employees live and work in these locations, so it’s the Black Gold Farms family that needs to take a community leadership role," he says. Many Black Gold associates are local fire department chiefs, water management board members, emergency responders, 4-H leaders and school board members.
Have a Hobby. Despite a hectic travel schedule, Halverson makes time for tailgating at North Dakota State University football games and adding to his extensive collection of antique potato chip cans, said to be the world’s largest single collection, exceeding 1,000 cans.
Marketing to a new generatioin of consumers
Never before has it been so important as a food producer to be transparent to customers and to make sure your story is told correctly and authentically, says Leah Brakke, daughter of Gregg Halverson and marketing specialist for Black Gold Farms. The objective for the company’s website five years ago was to "tell our story to all stakeholders, so they know who we are, what we do and how we do it. "Then, along came social media," Brakke says. Black Gold developed a Facebook page, a YouTube channel and a Twitter account and incorporated a blog within its regular site. The blog is aptly called "The Dirt." The staff tries to update each outlet on a regular basis with what’s going on in the field at different farms. Black Gold supports the potato industry, gives insight and news going on in the communities in which it farms, and highlights sustainable practices. The company continues to develop a consumer-customer base with its table-stock potatoes, and those customers, in turn, are very interested in Black Gold, its story and even its recipes. The communication world and the potato business are ever-changing, but at the end of the day, Black Gold’s objective will still be the same–to tell its own story authentically.
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