|Feb 16, 2012 --
On a farm in small-town Pierz, Minn., Tom and Jenni Smude are breaking new ground in the cooking oil business.
Tom and Jenni started Smude’s Natural Sunflower Oil in February of 2010 and have enjoyed the ride ever since. What began as an idea to grow a drought-tolerant crop transformed into a rural small-business success story with the potential to become something even bigger.
A couple of dry seasons on the farm led to the Smudes planting sunflowers. Tom originally wanted to extract biofuel from the crushed sunflowers, but he quickly learned there were other, more profitable, uses for his new crop.
After using a bottle of sunflower oil to fry potatoes for dinner one night, Tom and Jenni were instantly hooked.
“It was like butter,” Tom said. “Just awesome.”
The idea to cold-press sunflower seeds and start bottling and selling all natural, high-oleic sunflower oil took shape.
The Smudes built a processing building on their farm and process about 30,000 bushels of sunflowers annually. The sunflowers are augured into the building and the seed is sent through an automated system to be cleaned, destined, hulled and sorted.
After that, the seed is cold-pressed, typically at a temperature around 78 degrees. Anything less than 125 degrees is considered cold-pressed. Cold-pressing produces a higher quality and more flavorful oil.
After the oil is extracted, it’s filtered and sent to three 7,000-gallon on-site storage tanks before getting bottled and labeled with the help of part-time staff.
That’s quite the process for two people who never envisioned they’d one day enter the sunflower oil business at the ground level and rapidly start moving up.
“This was a new idea. It wasn’t a common business,” Jenni said. “The support we’ve gotten has been unbelievable.”
That support came from family and friends, and also from organizations that help ambitious rural entrepreneurs like the Smudes.
Financing and support
USDA Rural Development recently selected Smude’s Natural Sunflower Oil to receive a $298,500 value-added producer grant to help with marketing activities, working capital and overall growth.
Value-added grants may be used for feasibility studies, business plans, working capital for valued-added agricultural products and farm-based renewable energy projects. Eligible applicants include independent producers, farmer and rancher cooperatives, agricultural producer groups and majority-controlled producer-based business ventures.
Using a revolving loan fund established through Rural Development’s Intermediary Relending Program, Morrison County provided startup financing in 2009. Other assistance came from the Initiative Foundation of Little Falls, USDA’s Farm Service Agency, the Small Business Development Center at Central Lakes College in Brainerd and private financing.
“It’s all about jobs,” said Colleen Landkamer, USDA Rural Development State Director. “Smude’s is a great example of how products grown right in our own backyards can spur economic development for an entire region.”
Business takes off
The Smude’s started selling their sunflower oil at Thielen Meats and Hartman’s General Store, both well-know local businesses in Pierz. They expanded to farmers markets, developed a website and exhibited at health and sportsman’s expos.
Business started to grow.
In the early stages, Tom estimates he sent one pallet of sunflower oil every six months for distribution in the Twin Cities. Now he sends two per month. Smude’s products can be found in over 100 retail stores and restaurants throughout Minnesota and Tom and Jenni are working to become the country’s first national distributor of natural, food-grade, cold-pressed sunflower oil.
But no matter how much business grows, the Smudes know it wouldn’t have happened without the grass-roots support from the Pierz community and surrounding region.
“It’s all about community pride,” Tom said. “Whether people know me or not, they know where my product comes from. That means something, both to us and our customers.”
New customers and partners
One of the most enjoyable parts of the new venture has been meeting the people who discover and purchase the Smude’s products. Tom talks about a group of Russian immigrants who travel from Minneapolis to St. Cloud regularly to buy Smude’s oil because it “tastes like home.”
Jenni interacted with a woman from Pennsylvania who was battling breast cancer and found Smude’s on the Internet. She wanted to buy the natural oil for health benefits.
Tom also works with five other local growers to purchase sunflowers. He uses the by-product after pressing to feed his Black Angus cattle – all 400 of them. By-product also is sold to other area famers for feed and bedding. Nothing is wasted.
The on-farm processing facility is a shining example of energy efficiency. Tom says the heat from the machines when running at full capacity provides plenty of warmth during the winter and keeps heating and electricity bills well below what was originally budgeted.
At an event to recognize the USDA value-added grant on Feb. 16, Tom and Jenni talked about being prepared for the next steps and what it takes for a small rural business to grow. The Smude’s will use the grant, which they matched with their own funds, to add jobs and take their business to the next level.
Because Smude’s oil is healthy, all-natural and eco-friendly, it’s catching the attention of chefs and consumers who want to buy products that are produced locally and have minimal negative impact on the environment.
Future plans include working to gain additional access to markets like restaurants, movie theaters and specialty stores. There are also a couple of new products created with the oil that the Smude’s hope to begin marketing.
With two children, a farm, a full-time job, a separate day-job and other side businesses, it’s hard to figure out where Tom and Jenni find the time to oversee a blossoming sunflower oil business.
But they wouldn’t have it any other way.
“I want to take the risk. Let’s do it,” Tom said. “I believe in this product and I know others do too.”
Click here to visit Smude’s Natural Sunflower Oil on the web.
Click here to learn more about the value-added producer grant program.
Click here to see a photo from the Smude’s sunflower oil operation.