25 May 2021 - Founded in 1971, Minnesota-based Ralco, feed producer and specialist in natural animal health and nutrition solutions, this year celebrated 50 years in business. Ralco focuses on patented natural approaches surrounding custom diet formulations, additives and premixes for ruminants, poultry and swine.
The third-generation family business, started in his garage by Bob Galbraith before being passed to his son, is now run by current president, and grandson-in-law of the original owner, Brian Knochenmus.
Feedinfo spoke to Mr Knochenmus to get his view on the feed and premixes market and Ralco’s business plans and evolutions since we last spoke to him in 2018, especially in light of the ongoing COVID-19 pandemic.
Ralco currently has five production facilities creating all of its product lines, which employ around 200 staff in total, allowing the company to distribute its products to over 40 countries worldwide, Knochenmus confirmed.
However, he doesn’t see Ralco as just a feed company, “we are a technology company with a mission to help livestock and crop producers more efficiently convert their most expensive inputs like feed, seed and fertilizer into growth instead of waste.” A concept he believes was ahead of its time in 1971, “we were innovating towards goals of sustainability and stewardship long before it was cool,” he told us.
For Knochenmus the company over time has put a strong emphasis on the value of people, both with regards to employees and clients, a And that approach has paid dividends throughout the ongoing COVID-19 pandemic.
COVID-19 Response
The biggest impact on the business has been the ability to connect with customers, he told us. “Much of what we do stems from our connection with producers. Not being able to meet face to face or walk-through barns or fields with our customers has presented challenges, but at the same time it has forced us to learn new ways to maintain those relationships,” he highlighted.
Despite Ralco maintaining strong business relationships throughout the pandemic, it has not all been plain sailing, Knochenmus told us, “the supply chain issues facing virtually every industry today have forced us to be more diligent in our planning.”
However, he added, “we have been fortunate to have our own fleet of delivery trucks to handle much of our product delivery needs,” adding that, “at this point that we have been able to fill every order in what we believe is a timely and reliable manner.” All this in spite of the logistical challenges involved with ingredient sourcing and international deliveries.
Knochenmus confirmed COVID-19 wasn’t the only challenge facing Ralco or the industry, “African swine fever (ASF) in particular has left a mark on premixes in terms of staging ingredients, chain of custody, and the like.” Adding that the greatest uncertainty for customers is whether they can get a product at all.
“Prices get crazy in a time like this, and many producers feared not being able to supply feed to their animals, and then also faced fear of not being able to deliver their animals with the plant shutdowns, etc.,” Knochenmus added.
Fortunately, for Ralco, their strong relationships helped them weather the storm, “after a few months of complete pause, business picked up again. Our international business really picked up as well, so our procurement and operations teams worked their tails off to meet needs.”
And despite the challenges Ralco’s natural additive products and technologies have fared well. According to Knochenmus, demand for these products has been growing due to shifting consumer needs.
He commented: “We are also seeing that consumers are really starting to pay more attention to food production, and our natural approaches really resonate well with producers and food companies looking to market to that consumer interest.”
In response to the pandemic, and its effects on the supply chain, the company has been looking closer to home when sourcing ingredients for premixes. “Many regional/local suppliers are still reliant on non-local ingredients,” Knochenmus confirmed. Before going on to say that, “the trends are what we need to pay attention to, and the trend is moving toward a more transparent and traceable supply.” A trend which he believes is being echoed in the human food industry too, and something Feedinfo has highlighted in the pet food industry of late .
“We have also worked closely with other companies in the industry to incorporate many of our technologies into their products, allowing us access to segments of the market that we have not reached previously,” Knochenmus added.
Land-Based Shrimp Farming and Other Investments
When Feedinfo spoke with Mr Knochenmus in 2018 it was to discuss the launch of the new trū Shrimp spin-off, which at the time was in the process of constructing a new production facility in Luverne, Minnesota.
Unfortunately, due to “regulatory uncertainty” in the state, the Luverne site development had to be put on hold as they were unlikely to source investment given the legislative complications. However, Knochenmus hopes the Luverne site will be operational one day.
The trū Shrimp journey is not over yet, “this [legislative] circumstance certainly delayed the project, and so did COVID-19. Rest assured though, the work continues at the pilot facility in Minnesota and trū Shrimp is making great progress on funding needed to build Madison Bay Harbor in Madison, SD, hoping to break ground later this year.”
Land-based shrimp farming is still a nascent industry, which is not established at great scale anywhere at present: “One full-size Harbor – how we refer to our production facilities where the shrimp grow - will only supply enough shrimp to meet 0.3% of the U.S. Market. In other words, it will take 3 Harbors to capture 1% market share in the U.S. alone.”
In other company news Knochenmus confirmed the company has begun construction of an “expanded Distribution Center at one of our Marshall, MN locations,” a move which will add more loading docks and new office space. The expansion is due for completion this December.
“We have also invested over the past several months in updates and additions to our production and packaging equipment that will enable us to continue our growth into the retail and international markets,” Knochenmus added.
Finally, on April 29 Ralco opened the new Jon Knochenmus Center for Innovation. The centre, bearing the name of Knochenmus’ father, will house the company’s microbiology and chemistry labs. The facility will be used to develop new products and ideas in conjunction with the nearby Southwest Minnesota State University (SMSU).
“Ralco and SMSU have had a long-standing relationship and this acquisition by Ralco will not only be a place where Ralco’s scientists can do basic research and test out new ideas, but it will also provide hands-on experience for students to engage in real-life research with industry. “
