2023 South Federal
Mason City, Iowa 50401
www.innovativegrowers.com or www.iowanatural.com

Recipient of 2003 and 2006 USDA Value Added Producer grants.
 

Innovative Growers Among First to Take on Trans Fat Versus Health Issue

When awareness of health issues surrounding trans fats in American diets first began, Innovative Growers, an LLC of 34 grain farmers across Iowa, saw a window of opportunity opening. This was at the turn of the century.

The grower group knew it was on the cutting edge of something big, recalled Dave Dvorak of West Liberty, a producer and president of Innovative Growers (IG). Seed scientists at Iowa State University (ISU) had developed a soybean that took trans fats out of processed soybean oil, which is an ingredient in many of the staple foods on grocery store shelves. The new bean also offered better shelf stability. Innovative Growers was among the first grower groups to produce, process and sell the oil.

Since that time, there has been a media outcry and public education of consumers about the health hazards of trans fats in diets, and the federal government has conducted an investigation into requiring food labels to list trans fat content. Such label information eventually became required. Now, some large cities, including New York City, have considered or placed bans on use of food ingredients that include trans fats. Brand identities on the store shelves commonly are overprinted with the words “No Trans Fats.”

Dvorak looks back at the progress of his young group with some amazement – finding processors for their low-linolenic, chemical-free soybeans, finding markets, developing the brand, keeping adequate supply of the specialty beans, etc. – all within a few years.

And then he looks ahead.

Initially, IG members responded to a call to producers by ISU to pursue the value-added arena from a supply side viewpoint. The connections at the university led them to Walt Fehr, who developed the low-linolenic bean for ISU. They were encouraged to purchase the bean from ISU, plant it, process it correctly and get it into the market. The IG members put in $2,000 each to get started, buying shares in the company and committing to a certain number of acres of production of the specialty bean.

“Our business model has changed from the original,” said Dvorak. Yet, IG now stands at 40 members, many of them active in the group or members of the company’s board of directors.

“We have a very active board,” he said. With the help of USDA Value Added Producers Grant (VAPG) funds, IG hired a full-time sales and marketing representative. Now, it has another employee to do that work part-time. “We grow beans, toll process them and market the oil.” Oil under its Iowa Natural label is found in all Hy-Vee retail grocery stores, New Pioneer Coop natural food stores (Iowa City area) and in a number of food stores and restaurants in the state, primarily high-end restaurants. “We focus on restaurants that really care where the food they serve comes from,” Dvorak said.

He added that IG is on the verge of finalizing a deal with a natural foods retail grocery chain on the East Coast, something he thinks will be very good for the company. Large-scale Sysco has picked up distribution of product as well. 

Innovative Growers also sells to companies seeking specialty grains to produce pharmaceuticals, neutraceuticals or functional foods; feed processors, livestock producers and industrial producers who want specialty grains; and seed companies who want specialty grain varieties produced for end users. 

Is the window of opportunity still open for IG’s members now that the vilification of trans fats is somewhat finished?

“Yes, the window is still open. We’ve been focusing on high-end outlets because we only use an expeller (no solvents) process to make the oil. We get seven pounds of oil per bushel versus those who get 11 pounds using solvents,” Dvorak explained. That makes our product more expensive. Our customers know that it’s worth the slightly higher price tag. Innovative Growers still uses the chemical-free processing services of American Natural Soy in Cherokee, Iowa, another value-added business that has emerged over the last decade. Specialty beans are non-GMO and growers are often ISO certified.

Innovative Growers is now focusing more strongly on growing specialty beans that have low saturated fat properties as well as meeting the trans fat issue. Saturated fats are also considered to be bad for human health, contributing to heart, artery and other diseases. “Our oil has half the saturated fats of palm oil,” he noted. In order to avoid trans fats and produce cheaper oil, many food manufacturers have been using palm oil in their products.

One of the great challenges through the years has been the time investment. “There’s never enough time. The people interested in value added are those who are successful in other businesses as well – and time is tight,” he explained. Dvorak himself farms acres that are 20 miles apart in three different directions.

“Originally, when we started growing these low-linolenic beans, we thought people would be knocking on our doors,” he said. That wasn’t the case right off the bat. But progressively business has improved, although the producer describes it as a roller coaster at times, a ride that now is an accepted way of doing business.

Tracking success points over the years includes gaining representation by food distributors Tree of Life and Lomar (who distributes to Hy-Vee and other grocery companies), a connection that began in 2007. The IG goal had to shift to staying more local and adjust volume to meet the demand. It’s also been gratifying to actually put oil into a bottle, get it on the shelf and see it used.

“We’re still on an introductory progression in business. Our goals are to get to a more sustainable level of sales. We have enough acreage. We are continuing to expand our marketing efforts.” The newer focus on low-saturated fat product will play a big role in our expansion, he said.

Dvorak underscored the role the VAPG program played in IG’s success. In 2003, Innovative Growers received a $51,000 grant to help with planning, and in 2006, it received another for $255,800 toward operating capital. He was happy that the value of IG’s product was apparent to the USDA.

“I’m not sure I’d say we’re at the profitable stage, but a lot of good things are happening.”

For More Information:
info@innovativegrowers.com, 641-423-0844

Developed September 2008.