From Seed to Shelf

November 25, 2015 02:01 AM
 
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Iowa family diversifies with a full-circle popcorn business

If Tom Decker were standing in front of the suit-clad investor titans on TV’s “Shark Tank,” he wouldn’t hold back: “Eating Farmers Best Popcorn will change your life.”

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That’s because Decker knows bold statements—and high-quality products—set you apart in today’s business world. Plus, he’s passionate about popcorn.

Decker didn’t hit the jackpot by landing rich investors on a reality TV show. Instead, the Iowa farmer and his family (all of whom watch “Shark Tank” together) have built a thriving white-popcorn business from the ground up during the past six years. Their popcorn, which they process and package on-farm into microwave and air-popped products, is sold in more than 350 grocery stores across Iowa. 

“There aren’t too many folks doing what we are,” says Decker, a former seed salesman with deep entrepreneurial roots. “We dump the seed in the planter each spring and handle it all the way until it’s put on a shelf to be sold.”

Like most of his neighbors, Decker produces corn and soybeans on the flat and fertile ground near Rockwell City, in the north-central quadrant of Iowa. But a Decker family tradition of diversification has followed him throughout his 30-year farming career, inspiring him to set a goal of providing extra income and value for his family, which includes his wife, Diane, and daughters, Katie, 17, and Megan, 14.

“If your business is grain farming, either you get huge or you diversify,” he says. Decker’s grandfather, Marion Decker, started a livestock and feed company called Farmers Best in the 1940s. As market conditions changed, the operation shifted to a crop focus. 

Fast Facts About Popcorn
  • Americans consume 13 billion quarts of popcorn annually
  • Most of the world’s supply of popcorn is grown in the U.S.
  • Americans consume more popcorn than the citizens of any other country
  • 70% of popcorn is eaten at home

In 2000, Decker decided to boost his income and change up his crop mix by contracting popcorn on 5% of his acres, continuing to raise corn and soybeans on the rest. 

“Contracted popcorn can earn you up to $100 to $200 more per acre than growing corn,” he says. “But that depends on the current price of corn. When corn was high priced, it was harder to net that and some farmers moved away from popcorn.”

Niche Opportunity. After learning the ropes through contract production, nearly a decade later, Decker launched his own business venture, using the name of Farmers Best that his grandfather had chosen for the family all those years ago. He dedicates around 300 to 400 acres annually to popcorn, which accounts for about 15% of his total acres. 

Farmers Best is unusual because, these days, the vast majority of the nearly 220,000 popcorn acres in the U.S. is contracted, similar to corn and soybean seed production. Large companies that sell under brands such as Orville Redenbacher and Jolly Time contract with farmers across the Midwest, securing acres and controlling the production chain to generate the 13 billion quarts of popcorn Americans eat each year.

Although U.S. popcorn acreage has declined by more than a third in the past two decades, the snack is back in vogue due to its healthy, non-GMO and gluten-free characteristics, one Rabobank analyst says. The popcorn section at grocery stores once held just two or three products, but is now filled with flavored varieties, microwave packages, ready-to-eat bags and loose kernels bound for air poppers. 

“For a long time, popcorn was the somewhat unhealthy snack of choice for moviegoers and couch potatoes,” says Nicholas Fereday, Rabobank senior analyst of food and consumer trends. “Now, new popcorn players are finding ways to appeal to changing lifestyles and tastes, revitalizing popcorn as a healthy and convenient snack.”

Popcorn could be the next high-value crop for farmers frustrated by low margins and volatile commodity markets, Fereday notes. “It’s a great time for food processors to connect with farmers looking to explore new markets and escape the commodity treadmill,” he says.

A Crop That Pops. Popcorn production is similar to field corn. Seed selection, soil type, fertility and weed control are all pieces to the puzzle. The biggest differences are popcorn is non-GMO and yield is measured in pounds. 

The equipment used to plant and harvest the crop must be cleaned between uses to avoid contamination with other grain. While popcorn hybrids have improved in yield and standability over the years, the plants tend to be more fragile and are vulnerable to heavy winds. 

Almost all of the popcorn produced in the U.S. is yellow popcorn. Yet the Deckers decided to produce the white variety, which has a smaller kernel, less of a hull and more tenderness. “We just felt it tasted better and was what we wanted to eat as a family,” Diane Decker says. It also provided them more of a niche on grocery store shelves. 

After harvest, popcorn is stored in grain bins on the farm until it’s ready to be processed. “We tend to take it out of the bin in the spring,” Decker says. “You really don’t want to eat it right out of the field. It’s like wine, in that it’s better if you let it age.” 

When the Deckers first launched Farmers Best, they conditioned popcorn, which includes cleaning, sizing and bagging, in an insulated van trailer. After business grew, they graduated to a professional mechanical system in their large farm shop. It allows them to transfer loose kernels in bulk containers through a gravity-fed filler into plastic bags that are sealed, stamped and weighed. 

Decker likes to stay busy and popcorn processing gives him an outlet for his energy that compliments his grain operation. “Row-crop farming in Iowa is intense, but the winter gets pretty long,” he says. “I need to get up in the morning and have something to do.”

Cold Calls. One of the easiest parts about building a popcorn business is producing the crop. Actually selling it is much harder.

Adding a new brand to a market crowded by recognizable and giant companies is not easy. Luckily, Decker is a natural networker, and Diane applies the sales and business skills she honed during her careers as an agricultural banker, real estate agent and in crop insurance sales. 

Still, tracking down and convincing grocery store managers to carry a small snack-food brand is testing. 

“You have a whole different mantra when you’re selling your own product,” Decker says. “And you have to be fired up and like what you’re doing.”

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After tasting multiple varieties, Diane Decker says her family decided to grow white popcorn because they agreed it tasted best. 

When store employees shut down Decker’s earliest sales inquiries, he let the popcorn speak for itself. He offered samples and donated product for fundraisers. His excitement rubbed off on key grocery store contacts, and many of those small gestures eventually turned into long-term business arrangements. 

The Deckers have dedicated hours and miles to their business. Early sales depended on the family van; all four Deckers would stack Farmers Best products in the back rooms of stores. After scaling up in production, they prepared to climb the mountain of warehouse distribution. 

With multi-location grocery stores, if you can land a deal with the chains’ centralized distribution networks, delivery logistics become a whole lot easier, Decker says, not to mention you have secure demand.

As always, little gestures count when you’re building a business one relationship at a time.

Decker knows no strangers, so he quickly found meaningful connections. He landed a spot on the shelves of Hy-Vee, with grocery stores in eight states, by sharing his knowledge of semi engines. 

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Megan and Katie Decker clean, size and bag their family’s white popcorn products, which include microwave and loose-kernel varieties. The popcorn is sold outright to customers and through 350 grocery stores. 

“I was talking to Hy-Vee’s warehouse manager, and he requested samples,” Decker says. “We were about ready to hang up, and he asked: ‘Do you have farm semis?’ Turns out the guy wanted to buy a motorhome and needed insight on the engine type he should get.”

The quick conversation helped secure a Farmers Best Popcorn agreement with the 250-store chain.

Other business victories take longer. The Deckers celebrated with a bottle of champagne this past spring, after earning a spot in the Fareway Stores warehouse. The multi-state grocery chain now sends a semi to pick up product from the farm and distributes it to 114 stores. 

Family Tradition. Their daughters joke snow days aren’t that exciting when you know you’ll spend them processing popcorn. Yet Decker and Diane know they are instilling good values and an entrepreneurial spirt in their daughters, which could inspire them to be involved in the operation in the future. That’s key for family business success, according to Craig Aronoff and John Ward, founders of Chicago-based The Family Business Consulting Group. 

“Preparation of a family business successor does not begin when the incumbent leader starts to plan retirement, instead it should be a lifelong process,” they write in the book “Preparing Successors for Leadership: Another Kind of Hero.” 

Parents first expose children to business. “Healthy attitudes toward the business spring from the enthusiasm and joy parents display in accomplishment, hard work, responsibility and sacrifice,” the authors say.

The Deckers stress their family’s next generation, like the present one, won’t be limited by how ancestors farmed. “Everyone thinks they want to live and farm like their folks did,” Decker says. “But I tell my daughters: You don’t have to farm like I did, and you probably won’t be able to farm exactly like I did.”

The Deckers are exploring new markets, such as convenience stores and ready-to-eat products. They hope their business can grow to provide employment for their daughters or others in their community. For now, they are enjoying their success—one bowl at a time. 

Top States in Popcorn Production
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Nearly 220,000 acres in the U.S. were planted to popcorn in 2012, the most recent year for which data are available. That’s down by more than a third in the past two decades. Most acres are in the Corn Belt and contracted by popcorn processors.

What to Know Before You Direct Market

Farm-to-store products, like Tom Decker’s Farmers Best Popcorn, are successful because of the high demand of consumers wanting local food from farmers they know. Although opportunities exist in the direct marketing arena, it has matured, says Matt Russell, resilient agriculture coordinator at Drake University’s Agricultural Law Center.

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“The opportunities to break into the space were easier 10 years ago,” he says. “A decade ago, supply of farm-fresh food was small and demand was great. Now, demand is great, but supply is also great.”

This means there is less room for error, so farmers must research market opportunities and understand the food safety, inspections, licenses and insurance rules. 

Regardless of what you produce and sell, you are responsible for ensuring it is safe to consume, Russell says. Yet, depending on your business model, you may have to follow additional protocols. 
Answer these questions:

  • What are you selling?
  • Who are you selling to? 
  • What is the level of processing you’ll do before the sale?

If you are selling cucumbers at a farmers market, you don’t need a license. Yet, you do need a license if you can that cucumber and sell jars of pickles. “It can get fairly complicated,” Russell says. “But there are government, Extension and non-profit folks who understand it and want to help farmers be successful.”

 

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Comments

 
Spell Check

Linda Caslavka
Clear Lake, IA
9/24/2016 01:12 PM
 

  I bought Farmer's Best 'Light Butter' Microwave Popcorn the Summer of 2015. It was wonderful.....a delicious taste and no unpopped kernels. I left 3 pkgs in the cupboard, and when I returned to the lake in 2016, it was just as delicious as the year before. Buy it. You will love it!!

 
 
Jan Barnes
Cedar Rapids, IA
4/2/2017 03:32 PM
 

  We recently discovered your popcorn at Fareway. Can't tell you how much popcorn we've eaten over the years! My husband exclaimed that Farmer's Best was the best popcorn ever. All the kernels popped and it was tender and so flavorful and it's non-GMO. Good luck with your endeavors and we hope to continue to enjoy eating your popcorn for many more years.

 
 
Greg Phelps
Pekin, IL
11/2/2016 10:48 AM
 

  I am 75 years old and have tried many different brands of popcorn over the years, some were better than others of course, but they all had so many hulls and unpoped kernels. When I stumbled on to Farmers Best, all natural, popping corn I was blown away! This is hands down the best popcorn I have ever had. I could not believe it the first time I popped some. Tender, tasty, and best of all no hulls. I am going to ask my local store to carry it in their stock. Really, this stuff is unbelievable!

 
 

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