MBG Marketing

Planning a Major Frozen Food Facility

THE CLIENT: 
MBG Marketing, “The Blueberry People,” is the largest marketer of fresh and cultivated blueberries in the world.  Founded in 1936 as Michigan Blueberry Growers Association, the cooperative is headquartered in Grand Junction, Michigan, and has grower-members in the Great Lakes region, the Sun Belt, the Pacific Northwest, and British Columbia.  MBG is a partner in Naturipe Foods LLC, which produces and markets frozen and value-added berries under the Naturipe label.

EXPLORING OPPORTUNITY: 
The majority of MBG’s frozen blueberries are “block frozen,” a process in which fresh blueberries are cleaned, packed in 30-pound boxes, and placed in freezers.  The preferred method of freezing for most uses is Instant Quick Frozen, or IQF, in which berries are individually frozen to minus 36 degrees before packing, making them flowable like a box of marbles.  In contrast, block frozen berries must be fully or partially thawed for processing and come out in clumps or solid blocks.  Because IQF berries flow and can be handled without thawing, they are easier to use and result in less damage. 

Although processors and retailers increasingly demand IQF berries, MBG has been limited in its ability to supply them due to its lack of company-owned IQF facilities and dependence on outside packers.  Wishing to build an IQF facility capable of handling up to 15 million pounds of blueberries a year plus other fruits and vegetables as capacity allows, the board desired an outside assessment of the project’s viability and risks before committing to the project.  Likewise, the company’s bank wished to see an independent feasibility analysis of the proposed facility.

“Our cooperative is the world’s largest marketer of blueberries but when we sought to build our first state-of-the art Instant Quick Frozen (IQF) facility, our board and bankers wanted independent assurance.  Morrison brought the food industry experience, financial professionals, food processing engineers, and others needed to review and refine our strategy, budgets, and projections from the ground up.  The capital costs and operating results have been remarkably close to their projections.  Our thanks to the Morrison team for giving us the confidence to take this important leap.” –
Brad Moorer, CFO, MBG Marketing/Michigan Blueberry Growers

FEASIBILITY STUDY & BUSINESS PLAN:
Morrison & Company was engaged to perform a feasibility study and prepare a business plan for a state-of-the-art IQF facility near MBG’s Michigan headquarters.  We reviewed MBG’s plans from the standpoints of business organization, markets and market risk, marketing approaches and competition, facilities and production, distribution, information technology, personnel, capital needs, and risk analyses.

Along with the expertise of Morrison & Company’s professional staff, we engaged longtime partners in the areas of food processing engineering and information technology, and specialists in marketing to assist our assessment of certain aspects of the proposed construction and operation.  Our findings included a thorough assessment of the key aspects of construction, operations, marketing, and risk, plus multi-year financial projections under stated assumptions.

OUTCOME: 
MBG’s board and bank approved the project and ground was broken in October 2012.  Blueberry operations will commence in April 2013 with early deliveries from MBG growers in the Sun Belt and continue through the end of the Great Lakes harvest in September.  In addition, other fruit and vegetable crops will be frozen for other Michigan producers.  The feasibility study and business plan reports were also submitted in support of a USDA Value-Added Producer Grant application.

MBG’s IQF plant marks a major milestone in the company’s history, enabling them to satisfy the needs of the most demanding buyers, grow markets, and improve returns for their growers.  It will also serve as a model for future modernization and expansion efforts.