American Natural Soy
American Natural Soy: Organic Origins See Major Growth
Recipient of 2001 planning and 2002 operating capital USDA Value Added Producer grants.
Capturing a piece of rising consumer interest and premium prices paid for organic products is a dream of many value-added companies that have sprung up in the last decade.
Mark and Julie Schuett, owners and founders of American Natural Soy (ANS), Inc. in Cherokee, Iowa, however, may be among those best known for seizing opportunities, new processes and new products and turning them into growth enterprises at every stage of business development. It has involved some major risks and a lot of learning.
“At this point, we are bigger than I had any idea we would become. It’s been fun. I liken it to driving down a road and you can’t see around the next corner,” said Julie Schuett, Chief Administrative Officer of ANS and more recent offshoot companies created by the couple and their producer investors.
It has become an easier drive, but the ride still poses both challenges and opportunities.
American Natural Soy toll processes organic soybeans and flaxseed into oil and meal. They also organically refine, bleach and deodorize canola, sunflower and safflower oils. Product is shipped all over the world.
The extrusion method involves heat and pressure that process the seed, which then passes through a press that further squeezes out the oils. This chemical-free processing method has moved forward step-by-step with an organic industry that has enjoyed an approximately 20 percent annual growth since the 1990s and has continued to carve out market share among consumers.
According to Schuett, she and her husband purchased the first processing facility in Hartley, Iowa, in 1990 just to process their own soybeans. The facility used a chemical-free process, and the Schuetts had thoroughly researched the world of organic farming. “We had an idea of the way farming was changing. We believed organic was a way of the future,” she said.
On their own farm, they raised corn, soybeans and hogs. Then a neighbor asked them to process his beans. Soon, there was a group of producer investors. The rest is a timeline of growth, acquisition of facilities, partnerships with key organic product companies and new product development.
By fall of 2000, the National Organic Standards had come onto the scene. The Schuetts purchased a second plant in nearby Cherokee to begin processing organic soybeans into food-grade meal and oil. That plant originally was owned by Walnut Grove and then by Cargill, which shut down the plant in a year. A third plant purchase, a former packing plant in Hartley, has opened the door to growth in other organic processes.
American Natural Soy has become known as an innovator on the organic scene. Spectrum Organic Products of Petaluma, California, entered a partnership with ANS in 2004, which marked the beginning of a new Schuett-owned enterprise, BIOWA Nutraceuticals. The Cherokee plant expanded and new equipment was installed to process flaxseed, a crop once raised regularly by Iowa producers that was again making inroads. Flaxseed oil provides omega-3 fatty acids, recommended by the American Heart Association. American Natural Soy is believed to be the largest production facility dedicated to organic, plant-based essential fatty acid oils, according to Spectrum. Spectrum has since become part of the Hain Celestial company, one of the largest organic products firms in the country.
The timeline has even more dates. In 2007, the Schuetts were contacted by the Estee Lauder cosmetics company to provide the organic soy lecithin used as a emulsifying agent in the Estee Lauder Origins Organics line of beauty products. Lauder products are sold in major retail stores nationwide, as well as globally. It took Lauder nearly two years to find a processor of organic soy lecithin and another year to finalize the deal that would provide enough of the emulsifying ingredient, according to the Wall Street Journal. American Natural Soy partners with Clarkson Soy Products LLC, an Illinois firm, to provide the lecithin.
One of the biggest challenges faced over the years of expansion is that “We wear so many hats, have so many responsibilities,” said Schuett. The company also has had to learn new processes and about implementing different equipment as new products emerged.
The focus currently is on the canola (rapeseed) operation with its rapid growth. Canola seed has nearly double the oil content that soybeans have. “We want to continue to diversify with new organic products and continue to look at our organic base,” said Schuett, who explained that opportunities still arise as producers look at crop rotations.
“Right now, we are enjoying some breathing room,” she said.
Throughout the changes in their business landscape, the Schuetts have received support from groups of producers hoping to capture a share of the value-added organic market and also from the State of Iowa and the USDA. In 2001, ANS received a planning Value Added Producer Grant (VAPG) for $478,578 and in 2002, an operating capital VAPG for $250,000.
“I doubt very much if we would have made it without the help of the Value Added Grant Program,” said Schuett. “It is a wonderful program and a great investment by the USDA, I would think.”
More can be learned about ANS products and processes at the company website, www.americannaturalsoy.com.
For more information:
About USDA VAPG
VAPG funding has been offered by the USDA periodically since the early 2000s. A new round of funding is anticipated to be announced in the coming months. To be considered value added, projects must show how products are differentiated in specific ways from commodity crops. Typically, projects must also show how they may deliver greater returns to producers.
Independent producers, farmer or rancher cooperatives, agricultural producer groups, and producer-owned business ventures, including non-profit organizations, may apply. In previous cycles, applicants were required to be producers of the raw commodity who will maintain ownership of that commodity through the process of creating a value-added product. Grants have been available for planning projects (such as marketing and business plans and feasibility studies) and working capital projects (which might include wages or packaging supplies). (http://www.rd.usda.gov/)