The Roots of Sustainability Run Deep for Sunrich

When Sunrich was founded in Hope, Minn., in 1978, there was no real market in the U.S. for consumer-based soy products. “Soy was one of the first products that Sunrich started marketing,” recounts CEO Allan Routh. “It was almost all strictly for export at that time.”

The Right Crop


But Sunrich, whose shareholders are mainly Minnesota farmers, found itself with the right crop to feed the country's growing appetite for soy ingredients. “The good news around soy is certainly good news for us,” says Routh. “With our background as soybean growers and exporters, we were ahead of the curve quite a bit in being able to get soy ingredients to the U.S. market. With the number of compelling nutritional reasons for increasing soy consumption—and a lot of that information is coming from the medical community rather than the food industry—the whole thing has blossomed at the right time.”

Building on its soy foundation, Sunrich expanded into other grain crops in succeeding years, with corn and soybeans as mainstays. The company specializes in identity-preserved (IP), non-GMO, organic grains and grain products, such as flours, powders, syrups, soy milk and vegetable oils. Routh estimates that 85 percent of the food ingredients that the company produces is organically grown.

“We have keen interest in functional foods and healthy foods,” Routh explains. “The driving reason for us to look at a product initially has always been health. Then our goal often becomes how to make healthy ingredients more flavorful.”

To that end, Sunrich maintains a steady investment in product research and development, lab work that's yielded a line of organic sweeteners derived from corn and oats. The company also has cultivated the know-how to counsel its ingredients customers on the best applications of its sweeteners, some of which do double duty as stabilizing or bulking agents.

For all its R&D expertise, Sunrich is also proud of its products that prove the dictum that Mother Nature knows best. From Japan, the destination of the company's first soybean exports and still the source of about 25 percent of revenues, Sunrich borrowed a product that's gaining a swelling gallery of culinary fans in this country: Edamame soybeans offer a fresh-from-the-field taste that's tangy enough to pass for a snack food. Like the company's expanding Veggie Burger line, edamame soybeans are marketed under Sunrich's Hearty & Natural brand.

Retail is another frontier that Sunrich is exploring, if a little nervously. “If opportunities present themselves, we would go more into the retail arena, but we're set up to be an ingredients supplier. Retail is not a competency we have right now,” Routh admits. “To develop that, we'd probably turn to acquisition, perhaps through the food-service channel or private branded channel.”

Sunrich itself was acquired in 1999. The marriage seemed an odd one on the surface: a natural foods producer and Stake Technology (STKL), a Canadian company that recycles industrial materials and markets clean pulping technologies. What they had in common was a deep-seated regard for the planet. It's a value written into the mission statement of the Norval, Ontario-based company. And it's at the very heart of Sunrich, says its CEO.

“We started in agriculture, and a huge number of our shareholders are farmers. Whether a sustainable economy or ecology, to these growers that's really what it's about,” Routh says. “Most of these people are second-, third-, or fourth-generation farmers. This land means something to them.”

Sunrich has become the prime revenue generator among Stake Technology's subsidiaries, producing approximately two-thirds of the parent company's revenues. Sunrich projects sales for calendar 2001 at $75 million, which would mean growth of more than 50 percent from 2000 figures—a jump due in part to the acquisition of two companies last year: Nordic Asceptic, a packaging plant focusing on private label manufacturing, and NFD, which specializes in technical food ingredient processing and R&D. For 2002, Sunrich is projecting 25 percent growth, according to Kate Leavitt, the company's marketing director.

Identity Preservation


Just as the company works hard to maintain its identity as an environmentally responsible operation, Sunrich puts a sustained effort into supporting a long-standing reputation as a company that can guarantee identity preservation (IP) of its grains. “This company was formed to originate IP grains,” says Routh. “That's how we developed as a company. That's our original capability.”

And it's a capability that's increasingly in demand in an agricultural world wracked with dissension over genetically engineered crops. Sunrich has dedicated two processing plants to IP grains in an effort to give customers what they want. “Whether it's a GM issue or non-GMO, they all require segregation and ID preservation. We've always had tracking and testing regimes to ensure a customer's specifications,” Routh notes.

Even so, the company has learned it cannot honor customer requests for absolute zero levels of GMOs. It simply isn't possible given the prevalence of cross-pollination from GMO crops sown in hazardous proximity to natural crops.

In the midst of a changing and challenging market, soy has remained the company's revenue rock. “Between food-grade IP soybeans and soy ingredients and retail products such as commercial edamame, the percentage of our revenues coming from soy is probably between 60 percent and 70 percent,” says Routh.

And the future remains promising for that miraculous grain. “We're seeing emerging products on a number of fronts, such as the incorporation of soy in bakery goods with soy flours,” Routh says. “Soy nuts are among the products that we're working on to be much more appealing in flavor. The cereal industry is coming up with more good tasting, nutritious soy products. And the beverage area will continue to grow, incorporating soy ingredients in smoothies and other nutritious drinks.”