Iowa Public Television

 

A nutty idea for soybeans

posted on March 24, 2000


WHILE MANY IN RURAL AMERICA DECRY THE CONSOLIDATION OF AGRICULTURE INTO FEWER HANDS A SEPARATE TREND HAS EMERGED THAT IS EQUALLY POWERFUL IN ITS INFLUENCE OF RURAL LIFE. BILLIONS OF DOLLARS ARE BEING GENERATED FOR FARMERS AND RURAL COMMUNITIES THROUGH DIRECT MARKETING. FARMERS, EITHER INDIVIDUALLY OR THROUGH LOCALLY OWNED CO-OPERATIVE VENTURES ARE CAPTURING MORE OF THE VALUE OF WHAT THEY PRODUCE BY PROCESSING OR MARKETING A SPECTRUM OF COMMODITIES.

THE TREND IS DEVELOPING A MORE SOCIALLY AND FINANCIALLY SUSTAINABLE AGRICULTURAL ECONOMY WHERE CONSUMERS AND PRODUCERS KNOW ONE ANOTHER. A CASE IN POINT IS AN IOWA FARMER WHO IS FINDING MORE PROFIT BY MARKETING HIS SOYBEANS AS A PRODUCT RATHER THAN A COMMODITY. JOHN NICHOLS REPORTS.

Paul Lee: "I guess 30 years ago maybe we were ahead of our times but we were looking for a way to add value to our crops and we started the seed company."

IN ADDITION TO RUNNING A THRIVING SEED COMPANY, PAUL LEE FARMS A THOUSAND ACRES NEAR INWOOD, IOWA.

WHILE SOME OF HIS CROPS ARE MARKETED CONVENTIONALLY, LEE AND HIS FAMILY HAVE SPENT MUCH OF THE PAST THREE DECADES TRYING TO CAPTURE MORE OF THE RETAIL DOLLAR.

IN THE EARLY 1980'S, THE FAMILY BEGAN GROWING FOOD-GRADE SOYBEANS. SOME OF THE LEGUMES WERE PROCESSED INTO TOFU DOMESTICALLY AND SOME WERE EXPORTED.

Paul Lee: "And the more we got to working with these things and shipping the beans to Japan, they were using to make tofu and nato and miso and stuff like that the more we you know got to see that there were different varieties of beans and how they worked different and stuff, we got to thinking well why can we start roasting these things like a peanut? And doing some things right here in the United States with 'em?"

IN 1984, THE FAMILY ROASTED SOME OF THEIR SOYBEANS AND GAVE THEM TO FRIENDS AS GIFTS. THEY PROVED TO BE SO POPULAR THAT THE LEES DECIDED TO BEGIN MARKETING THEM AND "SUPER SOYNUTS" WERE BORN.

TODAY, THE LEES ARE GROSSING UP TO FIVE DOLLARS PER POUND ON THEIR SOYBEANS AT A TIME WHEN MANY FARMERS WOULD BE HAPPY TO RECEIVE FIVE DOLLARS PER BUSHEL.

PAUL'S WIFE JOYCE IS THE PRESIDENT OF THE COMPANY.

Joyce Lee: "We have actually 15 flavors of soybeans, and we have them divided into three categories hoping to make something palatable for anybody's taste. And we do we season flavors which would be more like potato chip flavors, barbecue, jalapeno-cheddar, if you like something hot. Onion and garlic flavors. Then on the flip side of the coin, we do confection flavors. We do chocolate coated, yogurt coated, ones that we call rainbow beans, that are much like M&Ms. And our idea with that was just basically to get something that would be palatable for a variety of people."

WHILE THE CANDY-COATED VERSIONS ARE PROCESSED BY AN OUTSIDE VENDOR, THE REMAINING 11 VARIETIES OF SUPER SOYNUTS ARE PROCESSED AT THE LEE FAMILY FARM NEAR INWOOD, IOWA.

THE LEGUMES ARE ROASTED IN...WHAT ELSE? SOYBEAN OIL. FIVE DAYS A WEEK, A DOZEN FULL-TIME EMPLOYEES STRUGGLE TO KEEP PACE WITH AN EVER-INCREASING DEMAND.

THE LEE'S SON, SCOTT BELIEVES THE GROWTH IS DUE, IN PART, TO THE CONSUMERS' HEIGHTENED AWARENESS OF THE NUTRITIONAL VALUE OF SOY PRODUCTS.

Scott Lee: "In '99, we roasted about 300,000 pounds of soybeans about 5,000 bushels. We would gauge our growth over each of the last 3 to 4 years at easily 35%, easily 30 to 35%. So it's all the nutrition information that has flooded the market in the last few years has of course helped us."

THE HEALTH BENEFITS OF SOY PRODUCTS HAVE BEEN WELL-PUBLICIZED IN RECENT YEARS, AND THE HUMBLE LEGUME HAS EVEN BEEN REFERRED TO AS, "HEALTH INSURANCE IN A POD."

IN OCTOBER OF 1999, THE FEDERAL GOVERNMENT APPROVED PRODUCT LABELING WHICH SAYS: "25 GRAMS OF SOY PROTEIN A DAY, AS PART OF A DIET LOW IN SATURATED FAT AND CHOLESTEROL, MAY REDUCE THE RISK OF HEART DISEASE."

WHILE SUPER SOYNUTS HAVEN'T DONNED THE LABEL YET, THE LEES ARE, NEVERTHELESS, RIDING THE WAVE OF HEIGHTENED SOY-CONSCIOUSNESS.

RATHER THAN SELLING THEIR PRODUCTS THROUGH TRADITIONAL OUTLETS, THE LEE FAMILY DIRECT- MARKETS SUPER SOYNUTS TO CONSUMERS.

Scott Lee: "My parents' initial motivation in selecting that type of a marketing strategy was the obvious one. We capture more of the food dollar. We take a raw product that we produce we take it directly to the consumer. We've found that our consumers definitely appreciate dealing with with an owner of the company, especially a family business. They can ask us questions, they can be assured of our integrity as owners of the company and know that the information we're providing them is correct and they know that the product we're providing them is is top quality of course."

THE DIRECT MARKETING STRATEGY IS MORE LABOR INTENSIVE. THE ENTIRE FAMILY SPENDS MOST WEEKENDS ON THE ROAD PROMOTING THEIR PRODUCTS.

SUPER SOYNUTS CAN BE FOUND AT SEVERAL MIDWESTERN STATE FAIRS, AS WELL AS FARMERS MARKETS AND AG TRADE SHOWS.

WHILE THE MARKETING STRATEGY HAS CHANGED LITTLE OVER SUPER SOYNUTS' 15-YEAR HISTORY, JOYCE LEE CLAIMS TODAY'S CONSUMER IS WELL-ACQUAINTED WITH THE JOY OF SOY.

Joyce Lee: "The first ten years that we did this people weren't looking for soybeans. We were promoting soybeans to them. Now they're kind of coming to us wanting soybeans. So things have changed."

MOST CONSUMERS UTILIZE THE COMPANY'S TOLL-FREE PHONE NUMBER TO ORDER THEIR SUPER SOYNUTS. THE FAMILY ALSO OPERATES A WEB-SITE, COMPLETE WITH A SECURE SERVER, WHERE CUSTOMERS CAN BUY ON-LINE.

SUPER SOYNUTS SELL FOR SIX DOLLARS PER POUND OR FIVE POUNDS FOR 20 DOLLARS. SCOTT LEE CLAIMS SOME FARMERS ARE INTRIGUED BY THE PRICE.

Scott Lee: "We'll get comments at shows that, "Four dollars a pound, that's $240 a bushel," you know they, most understand that in a one pound bag of Super Soynuts there's an awful lot of cost. There's a bag, a label, there's labor, there's product liability insurance, there's processing, there's the cost of getting to the show and there's the time of standing there talking to the customer."

PAUL LEE CLAIMS PROFITS ARE FURTHER CURTAILED BY DIMINISHED PRODUCTION NUMBERS, SINCE FOOD-GRADE SOYBEANS YIELD ABOUT HALF AS MUCH AS THEIR CONVENTIONAL COUSINS.

IN ADDITION TO THE FAMILY FARM, THE LEES GROW SOYBEANS UNDER CONTRACT AT FOUR DIFFERENT MIDWEST LOCATIONS TO MINIMIZE RISK OF DROUGHT OR STORM DAMAGE.

Paul Lee: "We grow I'm guessing probably somewhere's in the neighborhood of 5000 acres. But that doesn't mean we're gonna use 'em all here for roasting you know we have some left over we still do some shipping to Japan. Some of these beans they do they go very good over there you know they're the food grade, Clear Highland Beans and stuff. So we've always got an outlet for 'em if we don't use 'em all here for our roasting process."

BY HOLDING ON TO THEIR RAW COMMODITY LONGER AND ADDING VALUE, THE LEE FAMILY IS PROSPERING DURING A DEPRESSION IN THE OVERALL FARM ECONOMY.

ALL FROM A LEGUME THAT EMERGED AS PART OF AMERICAN AGRICULTURE IN JUST THE LAST FIFTY YEARS, MOSTLY AS A SOURCE OF LIVESTOCK RATIONS.

FOR MARKET TO MARKET, I'M JOHN NICHOLS.

Tags: agriculture food Iowa news rural soybeans