By Eric Peterson / CompanyWeek | May 16, 2016
Sunflower oil, feed, and grain
At 85 million pounds, Colorado's statewide sunflower production ranked sixth in the U.S. in 2015. They're are not only symbols of Colorado's plains but they're also an increasingly hot commodity: With no trans fats or genetic modifications, sunflower oil has seen its market suddenly bloom.
But for Colorado Mills, it took two strategic pivots -- and a little luck -- to land in the thick of sunflower mania. Owned by four families in southeastern Colorado, the company "originally started as a commercial swine feed producing facility," says Robbins, using high-fat soybeans. "That didn't turn out to be very profitable," so the company switched to sunflowers in 2001.
Robbins came on board in 2002 and helped with the sunflower "makeover," which led to animal feed and a salable byproduct in crude sunflower oil. "The biggest hurdle [customers] had was getting a refining slot at one of the refineries that were mostly on the West Coast at the time," he says. "It's not very efficient to ship it to California and back when it's already here."
It follows that Colorado Mills imported a "state-of-the art refinery” from Germany and installed it in 2009, says Robbins. The facility started refining sunflower oil the next year to sell to distributors like Denver's Shamrock Foods and North Dakota-based SK Food International that in turn supply food manufacturers and restaurants.
Sourcing sunflower seeds from about 90 growers, the supply chain consists of 80 percent Colorado farms, with the remainder split between Kansas, Oklahoma, and Texas. "We buy directly from the farmers," says Robbins, noting that sunflowers are a great crop to rotate with wheat and corn. "Just as food companies want to buy local, farmers want to market local."
Colorado Mills' crushing operation produces crude oil and the key ingredient in feed for pigs, goats, sheep, and cattle. Sales for feed and oil "are fairly even," says Robbins. "They actually complement each other."
With sunflower oil sales on the rise, Colorado Mills is doing brisk business. "We produce about 6,000 gallons of sunflower oil a day," says Robbins. "Over 90 percent of our oil goes out in 6,000-gallon tankers or 25,000-gallon railcars."
While he wasn't familiar with the product when he joined Colorado Mills, Robbins is now a big believer in sunflower oil. "You can actually tell the difference when you fry with it or make salad dressing with it," he says. "It's neutral in taste, [so] you get robust flavors. With olive oil, you mask those flavors."
Thus, Colorado Mills’ marketing slogan: "Taste your food, not your oil." And the fact that it smokes at higher temperatures than other oils allows for "very crispy and very light" fried foods.
Better flavor is matched by health benefits, Robbins adds. "Sunflower oil is naturally trans fat free. It's not GMO. It has three times the Vitamin E as olive oil."
In 2013, the company launched its own retail brand, CM Sunflower Oil. It's available throughout Colorado at Whole Foods and other stores, but it only represents about 1 percent of the total oil volume.
The company's livestock feed has also won numerous testimonials from ranchers. "They get a much healthier calf," touts Robbins. "Their cows are in better herd health."
Colorado Mills is also a notably green manufacturer, he adds. "We're a zero-waste facility. Nothing goes to a landfill. Everything goes to an oil product or a feed product."
In 2015, the company's total volume of oil hit 12 million pounds as sales topped $18 million. Of the company's serendipitous path to the sunflower oil market, "We just happened to be at the right place at the right time," Robbins says. "Sometimes you're better to be lucky than good."
Challenges: "Learning the retail models," says Robbins. "I'm from an agricultural background. Dealing with the food industry is a little different." Noting that he's in his late fifties, he says his strategy is to let the company's younger staffers to communicate with Whole Foods and other retailers.
Opportunities: More oil. "I could see with the change to non-GMO and non-trans fat, I could see our oil volume being absorbed on the Front Range alone," says Robbins, citing local growth of 300-plus percent a year.
He points out that Colorado Mills’ refining capacity far exceeds the company's crushing capacity. "That was done by design," he says. "We could refine up to 30 million pounds."
Adds Robbins: "Three to four years ago, we were competing with soybean oil and canola oil. Now they're calling us."
Needs: "In the short term, it's increasing our knowledge of the oil market," answers Robbins. "It's about gearing up to meet our customer's needs."