Lamb Weston, Inc.

8701 West Gage Boulevard
Kennewick, Washington 99336
U.S.A.
(509) 735-4651
Fax: (509) 736-0386
Web site: http://www.lambweston.com

Wholly Owned Subsidiary of ConAgra, Inc
Incorporated: 1932 as F.G. Lamb & Company
Employees: 5,000
Sales: $ 1.2 billion (1997 est.)
SICs: 2099 Food Preparations, Not Elsewhere Classified; 2053 Frozen Bakery Products Except Bread; 2038 Frozen Specialties, Not Elsewhere Classified

The largest producer of frozen potato products in the world, Lamb Weston, Inc. distributes a wide range of products—in numerous shapes and sizes—throughout Europe, Asia, Africa, Australia, and South and North America. Lamb Weston revolutionized the process of slicing potatoes in the early 1960s and used this innovative advantage to expand steadily throughout the United States and then into overseas markets. During the 1990s, the company’s international expansion was rapid, producing prolific annual sales gains and enabling it to herald itself as the largest company of its kind in the world. In the late 1990s, Lamb Weston was supported by sales offices in the United States, Turkey, Holland, India, South Korea, China, and Japan. Its 13 manufacturing facilities were concentrated in the Pacific Northwest and placed strategically in Holland, India, and Turkey.

1930s Origins

Lamb Weston began business as the F.G. Lamb & Company in 1932, when its founder, Frank G. Lamb, started his own fresh fruit shipping and packing enterprise. Ten years later, his business took a decisive turn when he bought a shuttered cooperative plant in Weston, Oregon, and expanded F.G. Lamb & Company’s business to include vegetable packing. The Weston plant represented the foundation upon which Lamb Weston rested, but the credit for the company’s quiet yet resolute rise in the food processing industry did not go to Frank Lamb, it went his son, F. Gilbert “Gib” Lamb. The younger Lamb, who was 27 years old when the defunct Weston plant was acquired, was responsible for transforming his father’s fresh fruit packing business into a market leader in the processed potato industry, an industry that was forever changed by his pioneering contributions. Lamb did not score his innovative coup, however, until he was in his mid-40s. The family business was nearly 30 years old before its identity was firmly established. In the interim, that is, during the period separating the acquisition of the Weston plant and the beginning of the company’s rise in the frozen potato market, Lamb Weston appeared to be evolving in different direction. The company made its first distinguishing mark in the business world as a formidable pea processor.

After its 1942 acquisition, the Weston plant was renovated and converted into a pea processing facility. It was this primary asset that Gib Lamb incorporated as Lamb Weston, Inc. in 1950. Lamb’s talent in the food processing business demonstrated itself quickly, as the company rose swiftly through the ranks of its industry niche to stand as the king of its market. By the late 1950s, the Weston plant was regarded as the most technologically advanced pea-processing facility in the United States. Lamb Weston ranked as the largest single processor of frozen peas in the world, accounting for ten percent of the total output of processed peas in the United States. Despite the unequivocal success his company was enjoying by this point, Lamb was on the prowl for other business opportunities. Lamb wanted to diversify, and when he did the results would completely overshadow Lamb Weston’s dominance as a pea processor.

Industry Innovations in the 1960s

In 1960, Lamb began exploring the opportunities available to his company in potatoes, one of the chief agricultural crops in the Pacific Northwest. He began studying the frozen potato processing business as a way for his company to reap some of the rewards generated by the region’s potato wealth and developed a device that would change the way potatoes were processed from that point forward. Lamb created a potato “gun,” the Lamb Water Gun Knife, invented and patented by Lamb in 1960. It was the first device to slice french fries in a high velocity water flow, thereby signaling the end of the days when potatoes were processed by hand. Other manufacturers would be quick to follow Lamb’s lead once they developed their own devices, but Lamb’s proprietary slicing instrument was the first of its kind, giving the company a sizeable head start over all competitors. The next logical move was to actually enter the potato processing business. In 1960, when Lamb held his revolutionary potato-slicing device in hand, Lamb Weston was a pea processing company.

Before the rest of the world could learn of his Water Gun Knife, Lamb ordered the construction of a new frozen potato processing plant. The plant, located in the heart of potato country in American Falls, Idaho, opened in 1961, marking Lamb Weston’s debut in the domestic potato market. Armed with a processing device that yielded tremendous labor-saving, and therefore cost-saving, advantages, Lamb Weston moved quickly to establish a pervasive presence in its new industry. The company constructed and acquired as many processing plants as finances permitted, striving to wrest market share from more established competitors with a production process the competition had no answer for. In 1963, a five-person sales force was formed to promote the company’s anticipated expansion and a broker network was fleshed out to cover the United States. With the sales support in place to spearhead future growth, major plant acquisitions followed. Lamb Weston acquired a potato processing plant in Quincy, Washington, in 1966 and another potato processing plant in Connell, Washington, two years later. The company also opened its first research center in Portland, Oregon, in 1968, having learned first-hand about the significant advantages to be gained from a serious commitment to the research and development of proprietary slicing and processing systems.

In 1971, Lamb Weston accepted an offer to merge with Honolulu-based Amfac, Inc. and finished construction of a new plant in Weston to produce fruit turnovers for the fast food industry. The following year, the company cut the ribbon for a new state-of-the-art potato processing plant in Hermiston, Oregon, which enabled Lamb Weston to put its proprietary techniques in processing, packaging, and storage developed at its research center to work in the field. As these events were taking place, the burgeoning Lamb Weston began to take its first steps outside the United States, just a decade after the company entered the potato business. Lamb Weston began shipping its potato products to markets in the Pacific Rim, Canada, Mexico, and South America, getting its first taste of overseas demand for processed potato products when it exported its first shipment to Japan in 1973. The company would revisit in earnest its commitment to global expansion twenty years later, but the push into international markets began in the early 1970s. The experience gained during this initial contact proved to be instrumental in the company’s future worldwide expansion.

1970s and 1980s: An Industry Giant Takes Shape

When Lamb Weston entered the 1970s, the company was producing roughly 300 million of potato products each year. By the end of the decade, its annual sales volume had eclipsed 800 million pounds of potato products, providing a telling measurement of how much the company grew during the 1970s. Increased production efficiency, the opening of export markets, plant expansions, and plant acquisitions combined to create one of the leading potato processors in the country. The company’s plants in Hermiston and Connell were both expanded during the decade. A new plant in Richland, Washington, was acquired in 1978 and a second production plant was constructed near Lamb Weston’s existing plant in Quincy, Washington, also in 1978.

The 1980s witnessed the continued growth of Lamb Weston, although the company’s physical expansion occurred at a slower rate than the previous decade. A major expansion of the company’s original potato processing plant in American Falls, Idaho, was completed in 1986 and the following year a potato processing plant in Boardman, Oregon, was acquired to supply the company’s growing export business and its markets in the United States. With the addition of the Boardman facility, Lamb Weston became one of the largest suppliers of frozen potato products in the world, a distinction the company had earned without drawing more than a modicum of attention to itself. The company’s steady ascension into the industry’s elite, predicated on a quarter century of innovative approaches to processing potatoes, had drawn little notice from those outside the tight circle of the potato-processing world. Lamb Weston was the quiet giant, unknown by name to many of the consumers who ate the company’s products principally because Lamb Weston served institutions and restaurants. Its exclusion from the list of household-known brand names, however, did not mean Lamb Weston was an unrecognized leader. The company was highly successful, and one corporate suitor in particular wanted to share in Lamb Weston’s success.

Company Perspectives:

Today we cover the world. Lamb Weston products are sold in nearly every corner of the globe and our international distribution network continues to grow. You will find Lamb Weston products served in Europe, Asia, Africa, Australia, South and North America. There are several important reasons for this growth. Firstly, Lamb Weston is committed to value-added innovative and premium products that offer higher satisfaction to the consumer and higher profit margins to our customers. While we offer the full range of commodity frozen potato products, we believe the future lies in aggressive new product development. Secondly, we are good partners with our customers. When you buy from Lamb Weston, you are buying our experience, our superior manufacturing skills, and our marketing support. We have the production capacity and financial strength to fill your orders, and to deliver those premium products in excellent condition, in time. Finally, because research and development is so important to Lamb Weston, we have the facilities to formulate new products quickly for regional markets. The suggestions of chefs, nutritionists andfoodservice managers are a rich source of new product ideas. In short, we are flexible, enthusiastic and aggressive.

ConAgra, Inc., a multi-billion dollar foodservice conglomerate, coveted Lamb Weston’s broadly-based strength in the frozen potato industry. Founded in 1919 with four flour mills, ConAgra had grown into diversified behemoth by the late 1980s, involved in an armada of businesses whose scope covered the spectrum of the food chain. ConAgra was involved in everything from seed distribution to the production of frozen food dinners, and in 1988 it added another plume to its portfolio by acquiring the entrenched frozen potato business operated by Lamb Weston. Concurrently, Lamb Weston relocated its corporate headquarters from Tigard, Oregon, to eastern Washington, settling in Kennewick. There, with its new powerful financial ally supporting its future moves, Lamb Weston readied itself to embark on the most ambitious expansion campaign in its history.

International Expansion in the 1990s

With one important exception, the rapid expansion that occurred during the 1990s took place in international markets, as the company extended and solidified its presence across the globe. Unlike its first foray into international markets twenty years earlier, Lamb Weston chose to produce its potato products near the foreign markets it served, rather than exporting products from its U.S. manufacturing facilities concentrated in the Pacific Northwest. Consequently, what ensued as the 1990s began was expansion via acquisition, as Lamb Weston purchased overseas plants and greatly expanded the boundaries of its physical presence. The acquisition spree started in 1991, when Lamb Weston purchased its first European potato processing plant, a facility in Eemshaven, Holland. Next, after acquiring a production plant in Park Rapids, Minnesota to strengthen its eastern United States business, Lamb Weston swiveled its sights to the east and purchased Viking International, a U.S. company with strong Asian export ties. Headquartered in Portland, Oregon, Viking was organized as Lamb Weston Asia, Ltd. and supported by sales offices in Tokyo, Seoul, and Beijing.

In 1994, Lamb Weston acquired another potato processing plant in Holland, purchasing a facility in Kruiningen as a part of a joint venture with one of Europe’s major potato traders, Meijer Frozen Foods. Lamb Weston also stepped up its efforts in Latin American markets in 1994 by opening the Lamb Weston Caribbean/Latin America sales office in Boca Raton, Florida, but the biggest development in 1994—and perhaps during the 1990s—was the company’s purchase of Universal Frozen Foods and its Inland Valley retail brand. Inland Valley, distributed throughout the United States, comprised an extensive selection of oven-baked and microwaveable potato products, giving Lamb Weston even greater product diversity. Included with the acquisition were two more Pacific Northwest production plants, one in Pasco, Washington and another in Twin Falls, Idaho. With the addition of these two facilities, Lamb Weston officially became the largest processor of frozen potato products in the world.

Having surpassed all rivals, Lamb Weston spent little time enjoying its global dominance. The company continued to expand on the international front as it headed into the mid- and late 1990s. In 1995, Lamb Weston entered a joint venture in Turkey to create Lamb Weston/Dogus, the country’s largest frozen potato processor with customers in the eastern Mediterranean region and throughout southeastern Europe. Also in 1995, Lamb Weston acquired the largest combined potato and vegetable processor in India, Tarai Foods, Ltd., which supplied American-style food products for India’s burgeoning restaurant market. The company ended the year by opening its International Development Center in Boise, Idaho, to serve as the headquarters for all Lamb Weston’s U.S. export activities and overseas plants.

By 1996, the ambitious efforts of the 1990s had turned Lamb Weston into a powerful force underpinned by solid and extensive global coverage in nearly every important worldwide market. The company entered the decade as an annual producer of less than 1.5 billion pounds of potato products. In 1996, that volume reached mammoth heights, having soared to 3.6 billion pounds. Annual sales by this point eclipsed the $1 billion mark, a total generated by the output at the company’s 13 production plants, which were clustered in the Pacific Northwest and situated in strategic locations overseas. As the company moved forward into the late 1990s, further international acquisitions were likely, as was the company’s global dominance in an industry it had helped to create. Lamb Weston’s focus on research and development, coupled with its aggressive expansion into every corner of the world, created a legacy of profitable, strident growth. Lamb Weston officials expected this recipe to deliver the same results in the future.

Principal Subsidiaries

Lamb Weston International; Lamb Weston-Meijer V.O.E. (Netherlands); Lamb Weston Asia, Ltd.; Lamb Weston Tokyo; Lamb Weston Caribbean/Latin America; Lamb Weston/Dogus (Turkey); Lamb Weston/Tarai Foods Ltd. (India)