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Weaver pops up growth with overseas sales: Indiana company, one of world's largest in the industry, innovates to stay ahead of foreign competition

January 14, 2008

What started on 10 acres of Indiana farmland in 1928 has turned into one of the biggest popcorn makers in the world.

Weaver Popcorn Co. already produces more than 30 percent of the world's popcorn, industry experts say, and an expanding export business means the Fishers-based company's slice of the pie could grow.

Sales of popcorn products in the United States alone this year exceeded $1 billion, according to The Popcorn Board, a not-for-profit trade group based in Chicago.

While about two-thirds of popcorn is consumed in the United States, annual domestic sales growth is in the low- to mid-single digits. Overseas markets are seeing double-digit-percentage increases annually.

When Ira Weaver, a minister as well as a farmer, first planted a quarter of his small Indiana farm with popcorn, the product was delivered by horse-drawn wagon.

Nearly 80 years later, Weaver's popcorn is delivered via a fleet of company trucks, vans and tankers to more than 90 countries, including areas of Europe, Russia and Southeast Asia.

"We see a lot of potential for this company as the virtues of popcorn that Americans have recognized for years become known by people in other countries," said William Weaver, Ira's great-grandson and the company's spokesman.

Officials for the closely held company don't reveal revenue or employee counts, but industry experts said Weaver likely has a robust eight-figure annual revenue.

Weaver sells popcorn in just about every imaginable form, from bulk seed to movie theaters and smaller bags to grocery stores, to microwave popcorn sold by Boy Scouts and already-popped kernels sold in various forms to consumers.

Growth benefits Indiana

While sales are exploding beyond domestic borders, much of that growth will be fueled by activities here in Indiana.

The company plans to move its headquarters to Noblesville in early 2008, but that's as far as it will go.

"People don't realize it, but the Interstate 65 corridor in central and north-central Indiana is where most of the popcorn hybrids are developed," Weaver said.

In addition to having popcorn experts at Purdue University, Indiana has an ideal soil type and climate to grow popcorn, industry experts say.

Distribution capabilities and an affordable work force are added bonuses, Weaver said.

Indiana produces about one-fourth of the world's popcorn, and is No. 2 behind Nebraska in U.S. production.

It's no surprise that three of the biggest brands in the industry have sprung from Hoosier soil: Besides Pop Weaver, there's Orville Redenbacher and Act II, which are both owned by Nebraska-based Con Agra Foods.

Redenbacher was founded in Indiana by its namesake-a Brazil native-before being acquired by Con Agra in 1983. The company still has a major presence here.

Weaver has operations 11 miles northeast of Gas City and in West Lafayette in addition to its corporate headquarters. Much of the company's popcorn is grown in Indiana, with the rest coming predominantly from Midwestern states.

Assuring health harvest

It's important to have popcorn growing in a diversity of fields, Weaver said, so weather doesn't have too big an impact on the company in any one year.

Popcorn makers contract with farmers on a per-pound basis. The makers of the fluffy snack are notoriously finicky about how and in what condition the product is delivered to them.

Farmers usually get seed from a popcorn processor because processors like Weaver have such specific requirements. They demand a certain size and color of kernel with properties that allow it to expand in a specific way.

Popcorn is grown much like commodity corn, though yields are about one-third smaller.

Over the last 30 years, Weaver has put lots of resources into researching and developing better seed hybrids that allow the crop to be grown more economically, Weaver said.

There are dozens of domestic popcorn makers, according to The Popcorn Board, from large companies to mom-and-pop operations. But the industry is dominated by Weaver, Con Agra and General Mills, said Allan Gray, a Purdue University professor and agribusiness expert.

The industry has changed dramatically in the last 20 years, with the advent of microwave popcorn and the increase in growers in Argentina and France, Gray said.

Popping up new ideas

Weaver-along with many of its competitors-has in recent years focused on making a fluffier microwave popcorn that pops more kernels.

"Places like Argentina are growing at the expense of U.S. producers," Weaver said.

To combat that, Weaver said, his company has stayed out front on research and development.

This year, for instance, Weaver became the first brand to take diacetyl out of its microwave popcorn. Diacetyl is a naturally occurring chemical compound that gives butter its flavor. It has long been approved by the U.S. Department of Agriculture for use in food products, but some food production workers complained that inhaling large amounts of the chemical was damaging their lungs and making them sick.

"We know consumers are becoming increasingly concerned about this issue, so we've taken it out of our flavorings," said Weaver President Mike Weaver. "It was a challenge to eliminate diacetyl and still maintain the great buttery taste that consumers love, but we've done it."

William Weaver said it took more than two years of studies to make a comparable-tasting product.

"A lot of people in the industry are still working on it," he said.

Eliminating trans fats

Weaver officials have been working since 2000 to get trans fats out of all their products. They've succeeded on some fronts.

"It's difficult to come up with a solution that works across all products," William Weaver said.

Unlike its major competitors, Weaver's only product is popcorn, and that, said company officials, gives them added incentive to be industry innovators.

"Our fortunes ebb and flow with the tide of the popcorn market," William Weaver said. "So we don't want to do anything to damage the category. And we want to do everything we can to keep our harvest growing."
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