Known for producing mouthwatering pizza crusts, buttery, flaky croissants and more delicious-as-grandma-made dough products,Value Added Products (VAP) held their 20th Annual Stockholders Meeting Saturday in Alva. An estimated 40 investors attended the meeting in a conference room at the Northwest Technology Center.
In the late 1990s a group of innovative businessmen, farmers/ranchers and others in the Alva area came together and VAP was born. Investors were mainly wheat-farmers and ranchers who invested their money in this value-added industry to provide jobs for the local economy; get a tax break on their investment; with hopes of someday seeing a return on their venture. Area farmers and landowners invested in the cooperative as a way to add value to their hard, red winter wheat, the predominant crop in this area.
VAP shipped its first load of product May 1, 2000, according to the original CEO Mike Dunker who served in that capacity until June of 2010. Then Dirk Merle became CEO until October of 2018. The current CEO is Geoff Clark who began his role February 19, 2018.
Through VAP'S 20 years of existence in Alva the frozen dough manufacturer has employed hundreds of people and generated well-over a million dollars into the local economy with taxes, wages, etc.
Clark said that VAP currently employs over 60 people with a $1.9 million dollar annual payroll.
Looking back on VAP's annual meeting stories in the Alva Review Courier/Newsgram, VAP has had years of great business and times where the yeast failed to rise to the occasion.
Clark told investors Saturday, “It took us 20 years to get here. It takes a little time to ground the ship, to fix some leaks, but we're still floating.”
The audit of VAP's finances ending in FY May of 2019 showed a significant loss. Clark said they had a drop in sales because he chose to drop some customers who had VAP operating at a loss.
Clark said, “I am here to tell you what we've been doing since May of 2019.” In his power point to stockholders, he pointed to VAP'S current financial figures that are “in the black.”
The CEO introduced his management team, praising them. He said they are assessing how they manage themselves financially and from an employee perspective. Their focus is on profit, economic growth and promoting VAP on social media.
“Our biggest asset are our employees – our people,” Clark said. With all types of incentives, (including healthier employees through healthier choices) he said VAP has greatly improved employee retention and these men and women are motivated to “Make VAP Great Again.”
Clark announced they've hired a woman with accounting and tax expertise. She is Beverly Fisher who has business degrees and about to obtain her MBA from Wichita State. She is moving to Alva from Wichita and starts at VAP in late January.
He's also excited about a new director on the board – Dan Purvis from Yukon. Clark said Purvis is currently Director of Procurement for Hideaway Pizza. Purvis was President of Dan's Food Service and did business with VAP, utilizing their pizza crusts. Purvis requested to be on VAP's board of directors because he believes in their products and knows how delicious the crusts are. He has endless connections in the pizza business.
Looking for continued growth, Clark said VAP is about to hire a man from another state who has multiple connections to the industry.
Marketing VAP's Products
The CEO complimented the NWOSU students who have helped VAP with their marketing and social media presence. He showed a video those students made to promote VAP with the clever theme they created, “VAP – Rising Above the Rest.”
“We're getting a more balanced portfolio,” Clark said of their products and marketing. He noted that selling to schools is about VAP's largest percentage of sales, but they need sales to make up the loss when school is not in session. Improving pizza crusts for schools is a top priority.
“'We have a superior product that is ready to go and we can beat the competition,” he said.
Clark is looking for more national business. He has inquiries from national retail pizza chain restaurants who are more interested in buying VAP's crust rather than making dough and crusts at their individual sites. Many of those businesses want a variety of crusts such as infused or stuffed.
Looking at more diverse markets, Clark said research shows that the majority of Millennials think of convenience stores as restaurants.
Clark said he wants to focus on marketing the delicious, buttery, croissants VAP makes. He wants to reduce the number of items VAP manufactures for greater efficiency.
“It's all about working smart,” he said.
VAP must meet the Globally Recognized Standard – the BRC for global food safety, Clark said.
The quality of wheat grown in this area is an advantage for VAP, Clark explained. The dollar/ounce of wheat is better with increased quality.
He said that “traceability is a big deal,” regarding the region where wheat is grown. VAP should be dominating in this region for transportation (a 500 to 750 mile radius), Clark said. This is to capitalize on things that make VAP “unique and better.”
Efficiency is not only in making products, but to improving the building. Such as they installed LED lighting which will save VAP some $7,000 per month on their light bill, Clark said and added that OG&E is contributing $40,000 for the project.
The CEO said VAP has “too much debt.” He is working to consolidate debt and restructuring USDA loans. Clark said the lower payments will enable VAP to have more cash flow.
Clark said they have and are making numerous changes “to make ourselves better.” He said VAP is right on track to meet their goals for this fiscal year. “We're here to deliver a profit.”
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