HILLSBORO, N.D. – Changes in the pet food industry could mean new opportunities for farmers.
Anchor Ingredients, based in Fargo with a processing plant in Hillsboro, is a raw ingredients supplier that sources and supplies specialty ingredients to pet and human food manufacturers.
The company, which formed in March, handles a wide array of ingredients, from grains and legumes to spices and dehydrated fruits and vegetables.
Anchor Ingredients purchased Identity Preserved Ingredients of Hillsboro in July so it could offer a three-tiered approach to business, said Al Yablonski, Anchor Ingredients managing director.
"One of the reasons we created Anchor is we saw an opportunity to put the three pillars of the business all under one umbrella," he said. "What I mean by that is the ability to originate the ingredients, process them in a company-owned facility and then distribute them to our customer base."
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Those customers want to work with ingredient suppliers who can track ingredients from the farm all the way through distribution, said Seth Novak, Anchor Ingredients managing director.
"By adding the Hillsboro processing plant with its capabilities to our company, it certainly adds to our capabilities, and it's what our customers are looking for," he said.
Anchor Ingredients partnered with Arthur Cos., which purchases grain from farmers. Anchor processes the ingredients in Hillsboro and handles distribution at its Fargo headquarters.
"Our customers really like the visibility and the transparency that we're able to provide," Yablonski said. "We're able to show where the ingredients come from, how they're handled, how they're transported and give them a lot of visibility into what the pricing structure is and eliminate some of the middlemen along the way."
The company buys grain processed in Hillsboro from growers across North Dakota as well as in Minnesota, South Dakota, Montana and Canada.
"It's one of the only versatile specialty crop processing facilities on the eastern side of the state," Yablonski said. "With growers looking to diversify their revenue streams, we're seeing more special crops grown in central and eastern North Dakota and Minnesota and other regions. This is a good differentiator for us and provides a nice outlet for these growers looking to diversify their revenue streams."
Anchor also imports ingredients, like quinoa, from all over the world.
"We're trying to position ourselves as a supplier of super-premium ingredients," Yablonski said.
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And it's an exciting time in the dog and cat food industry now, he said, because manufacturers are looking for those kinds of ingredients.
"A lot of these diets are trending away from traditional grains and traditional formulas that we're all used to," Yablonski said. "In the industry, we call it the humanization of pet food, where more and more pet food manufacturers are looking for ways to differentiate themselves from their competitors and one way that they're doing that is by adding more unique special crops and specialty ingredients."
And that, Novak said, means more potential opportunities for growers.
"As the values for agriculture commodities have shifted in the last few years, many growers are looking for alternative sources of income," he said. "Having a special crop processing facility on the eastern side of the state can mean better economics for a grower."
