Simplot Branches Out From Fries

Published online: Apr 12, 2006 The Idaho Statesmen | 04/12/2006
Web Exclusive
By Melissa McGrath

The J.R. Simplot Co. is adapting to the nation's food and diet trends by focusing on low-fat, fresh and natural foods said Laryy Hlobik, Simplot's chief executive officer, on Tuesday.

Hlobik (pronounced LO-bik), who has been Simplot's CEO since 2002, spoke to local businessmen and women at the Boise Metro Chamber of Commerce's CEO Speaker Series luncheon.

The company has struggled to compete in the growing global food business in recent years, he said, and now it is facing troubles because of changing food trends.

"No, we don't believe french fries will go away," Hlobik said. "But we've got to be realistic. ... It's not going to be the growth vehicle we've had in past years."

More people are becoming aware of the obesity crisis in the United States and looking for healthier and fresher foods, Hlobik said. So Simplot will need to expand its product line to include fresher and more natural foods, he said.

"We need to maintain the entrepreneurial spirit of Jack Simplot to make different products and stay innovative," Hlobik said.

The company has already made french fries with reduced trans fat. Consuming trans fat in foods causes arteries to become clogged and increases the risks of heart disease, according to the American Heart Association.

Simplot also hopes to start selling fresh seafood in the United States soon, he said. The company's seafood sales in Australia have proven successful, he said.

The new food trends have boosted the outlook for other parts of Simplot's product line.

"Roasted vegetables look strong, fruits look strong," Hlobik said. "We're also doing salad toppings for quick-service restaurants."

The food unit - which includes potatoes, vegetables and other frozen foods - still makes up 53 percent of the company's $3.1 billion in sales each year, Hlobik said. The other half of the revenues come from Simplot's fertilizer products, land and livestock operations and its food business in Australia.

Simplot has struggled in recent years with global competition, Hlobik said. " But it's doing better, and it continues to do better," he said.

The privately held company does not disclose its earnings publicly.

Simplot has closed down several plants, including its meat-packing plant in Nampa, to cut costs, and that has helped streamline the company's operations, he said.

It also has consolidated some of its operations by moving more people to its corporate headquarters in Boise. In the last year, the corporate staff in Boise grew from 450 employees to 720.

Boise Mayor Dave Bieter applauded when Hlobik mentioned that

"I told him after the speech, if there is anything the city can do to help, we certainly want to know about it," Bieter said.

Hlobik said the company has no plans to move out of Boise or out of the Simplot family's hands.

"It is still owned by the Simplot family. They are our shareholders," he said. "They want to stay private. ... This company can easily stay privately held for the next 50 years."

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