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Minnesota-made sunflower oil sees growing market

–by Jonathan Eisenthal
photos by Lisa Sherwood Photography

Hundreds of people dropped by Tom Smude’s booth at the 2013 Minnesota Sportsmen’s Show in St. Paul, many of them already loyal customers of his brand of cold-pressed, high oleic sunflower oil.

“Most of them told me they love the oil when they’re cooking fish,” said Smude. “At other venues, most of the people will say they are buying our oil to use in salad dressing, cooking or baking.”

Smude produces the oil at his farm in Pierz, Minn. A sign that his business has hit its stride is his recent purchase of a 22,000 square-foot warehouse space, where his four part-time employees can press, bottle and ship the oil. The new space will also allow Smude’s to expand its product line. Next in development is Smude’s Granola.

Sunflower oil has among the highest levels of monounsaturated fat available in a food oil—10 percent higher than olive oil, according to Smude. This healthy fat, which contains fatty acids known as omegas, is known to help improve cholesterol levels. And a single serving of sunflower oil offers 29 percent of a person’s daily value of vitamin E.

“Taste is a key factor,” says Smude. “Our oil has a real light, buttery flavor to it. The nutritional analysis AURI did for us came out perfect for healthfulness, and it’s 20 times tastier than any other oil on the market. I might be a little biased.”

AURI has conducted several projects with Smude Oils to help with initial market development and nutritional analysis and labeling.

“AURI is a great starting point for a business like this,” says Smude. “It is so hard to break in and do this kind of thing, especially with food products—that’s one of their real strengths at AURI.”

Smude became interested in sunflower production as an answer to drought. The hot, dry weather in 2007 took a toll on corn and soybean crops, especially in sandy-soil areas like Central Minnesota. He learned that these hardy sunflower plants could thrive in such adverse conditions.

It’s also a crop that fit in well with his existing cattle operation. After pressing the seeds to extract the oil, the leftover meal can be fed to the cattle. Smude continues to grow a portion of the feedstock himself, but also works with neighbors who grow for him—all the seed comes from within a 20-mile radius.

Just as Smude put together the business in 2009, biofuels became a big market. But the friend who sold him the pressing equipment tipped him that food grade oil might be an even more profitable outlet. So Tom went on a trip to the grocery store and discovered a gap in the offerings—olive oil, blended vegetable oil and canola oil were well represented on the shelf, but no sunflower oil.

“The cold-press method sets his product apart from most commercially available oils, which use hexane to chemically extract the oil,” says Randy Hilliard, the project manager at AURI who has worked with Smude since 2009.

An expanding market

Smude came up with the most important sales leads himself and has deals with SuperValu and with Classic Provisions in Plymouth. SuperValu distributes Smude’s sunflower oil in groceries around the region including Lunds, Byerly’s Festival Foods, Coborn’s, and some Kowalski’s and Cub Foods stores. Classic Provisions distributes 2.5 gallon jugs of sunflower oil to Twin Cities restaurants and food coops.

With Smude’s development of its granola product line, Hilliard and AURI Senior Scientist of Food and Nutrition Charan Wadhawan have been able to generate leads for manufacturers who could either take it all the way from raw feedstock to finished product and others who can take the product once Smude produces it, and the manufacturer would bag it up and label it for sale. Tom is grateful to have all these options to weigh.

A key element in launching any new food product is the nutrition label, and Wadhawan provided the expert analysis for the oil and now for the granola.

“I did the analysis, and I’ve been doing troubleshooting for Smude’s on an ongoing basis,” says Wadhawan. She helped with recipes for flavored and infused oils and now that the granola product is coming along, she has helped with issues like moisture content. Wadhawan considers healthful food both a personal and a professional interest.

“When a trend starts, there are so many businesses that can start up, to offer products and cater to that niche,” says Wadhawan, who has an undergraduate degree in nutrition and a Ph.D. in cereal chemistry. “I have been helping clients develop healthier food for quite a while now…with the rising cost of health care, the interest in healthful foods will only continue to grow.”

And now that Smude has had several breakthroughs and attracted a growing base of loyal customers, he wants to turn around and help other local entrepreneurs achieve that first big success. He’s helping to organize a Minnesota-Made products fundraising catalog—to give 25 small companies, with 70 or so products, a means to offer their products for sale in school fundraiser programs.

“A lot of people have contributed to our success, and I feel like this is a chance to give back,” says Smude.

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AURI and Smude’s Sunflower Oil

Idea to reality:
After the hot, dry summer of 2007 took a toll on Tom Smude’s corn and soybean crops, he learned that hardy sunflower plants could thrive in such adverse conditions, and he began to explore the idea of producing sunflower oil.

AURI’s role:
Nutritional analysis, product development, troubleshooting and innovation networking

Today, Smude’s is on shelves in major grocery chains, has a loyal customer base, is expanding its offerings to include granola and employs four part-time staff.

Smude Oil received a value-added producer grant from the USDA and also received assistance from the Community Development of Morrison County and the Small Business Development Center in Brainerd.