How The Andersons’ approach utilizes principles and people to develop greener services from grain
Grain to green
For a company, such as The Andersons, Inc. (The Andersons) to transform a single, family-owned grain elevator, established 75 years ago, into a publicly traded Fortune 500 company, it takes more than a well-timed product or innovation – it takes principles. The Andersons has been deeply committed to getting the human side of trading and business right since its earliest days, an intrinsic philosophy that has been continually carried forward into the future by The Andersons’ Statement of Principles.
The statement expresses the beliefs held by the founders and forms the basis for the development of The Andersons’ operating principles: ‘to recognize our concurrent responsibilities to our customers, our employees, our communities, and our shareholders.’ “We are a very people-oriented culture,” states Rod Harris, Renewables Vice President. “It’s all about our people, because without them we are nothing. The Statement of Principles was something that our original family founders created, and it still lives today. It talks a lot about our culture, our beliefs, and our accountabilities. It’s a document that everybody at The Andersons has, and we train on, and we teach, and we hold people basically accountable to that.”
Using its supply chain awareness, The Andersons has grown by building upon its knowledge base of the grain industry and continuing to grow relationships with farmers across the country. This approach has enabled it to branch the original business model from the 1940s, centered around a grain elevator and terminal with nine truck bays, out into a wide umbrella of services and products relating to multiple sectors of the North American agricultural supply chain. “Today, the company has over 120 locations in the US and Canada as well as in the UK, Puerto Rico, Singapore, and Switzerland,” Bill Krueger, President of The Andersons’ Trade and Processing, highlights. “Our primary business has three segments: our plant nutrient, which provides fertilizer to growers, our renewables business, which is both ethanol plants and renewable diesel feedstock, and then the largest of our three segments is our trade group, which houses all our grain elevators in North America.”
Besides the plant nutrient segment, which began in the 1950s, with its initial blending taking place in a cement mixer, the renewables business has seen the greatest surge in development in recent decades. This has been accentuated by the repositioning of the business in 2021 for growth across the sector, under the name The Andersons Trade and Processing. The startup of the most recent plant was in late 2019 in Colwich, Kansas. Bill cites The Andersons’ foresight in providing farmers with new sales opportunities as a driving force behind the investment in its initial ethanol plants: “We very quickly, in 2006 and 2007, started to build ethanol plants that allowed our producers better destinations for their corn, and enabled us to become one of the industry leaders in the marketplace.”
The Andersons’ five ethanol plants process corn into ethanol, a renewable, low-cost, clean burning, high-octane fuel product. When commenting on the current ten percent blend of ethanol in US gasoline, Rod says: “Within our industry we have been actively working and trying to get that up to 15 percent – a cleaner burning concentration”. As well as the ethanol itself, there are numerous co-products created as a result of the production process, some of which would be wasted if not for the innovative steps taken by The Andersons to maintain its sustainability initiative. “In addition to the ethanol products, we also produce a number of different feed products,” Rod comments. “We make both a dry and a wet distillers grain and high-level protein products, that are sold as animal feeds.” The Andersons also produces distillers corn oil, which is sold as an animal feed and a feedstock for renewable and biodiesel, and harnesses the pure stream of CO2 produced during the fermentation process, selling it back to the food and beverage industry through a business partner.
Perhaps the most promising result of The Andersons’ eye for optimization, in terms of a brighter future for both it and the planet, is the ground it is covering within the production of renewable diesel feedstock and related technologies. As Jacob Eberhart, Diesel Feedstocks Vice President, explains: “The renewables growth came with the advent of RFS2 that pushed the US into an energy transition. After RFS2, the Low Carbon Fuel Standard (LCFS) in California provided an additional incentive for not only ethanol, but other platforms too, to try and decarbonize our footprint in the US.” The Andersons started trading and marketing its renewable diesel feedstock business just two and a half years ago and has already begun to revolutionize the industry with new technology.
This new development was born from a strategic partnership with Trucent Separation Technologies, LLC and enables ethanol plants to partially refine crude distillers corn oil of the unwanted metals content, which in turn allows them to send it directly onwards as feedstock for renewable diesel, without any further processing. This low investment on behalf of the supplier cuts down time and costs for the consumer. Jacob reiterates the pioneering nature of the collaboration to commercialize the technology: “We are certainly an early mover in the space. We do have some competition, but we feel like we are the first ones to commercialize, and we are the first ones to push products into the industry.”
While the roots of the business continue to be firmly grounded in grain, and The Andersons still boasts some 77 grain facilities with over 36 million tons of traded product annually, the movement towards greener solutions for modern day problems appears to be where its future potential now lies. As Jacob concludes: “I will focus on the renewable feedstock business. It’s been such a growth business for The Andersons for the last two and a half years. We feel it could be a real driver for the company long term and a renewable solution for the industry.”