Lamb Weston has selected a suburb of Boise for its corporate headquarters, but the Columbia Basin is still a winner as the frozen potato giant moves toward independence from its Chicago-based parent, ConAgra Foods.
Lamb Weston will become a standalone, publicly traded company sometime this fall.
When that happens, Lamb Weston will instantly become one of the Northwest’s largest private companies. Its 2015 revenue of $2.9 billion would have ranked Lamb Weston at the time at about 750th on the Fortune 1000 list of America’s largest companies.
Idaho had three Fortune 1000 companies in 2015. Washington had 15, with Costco being the largest.
The decision to make Eagle, Idaho, its headquarters instead of Kennewick, where it has offices, was not unexpected. Formed in 1950 in Weston, Ore., it grew in the Mid-Columbia, but its Boise office has long been its corporate anchor.
The Kennewick office, which briefly served as its headquarters during the company’s early history, plays a supporting role.
Lamb Weston employs more than 4,000 people in the Mid-Columbia. Operations include the corporate office in Kennewick, a research and innovation center in Richland, processing plants throughout the region and a farm.
Local and state economic development officials watched the spinoff with interest but did little to try to convince Lamb Weston to make Kennewick its corporate home.
Lamb Weston’s pending independence is nevertheless a win for Washington. It brings decision-making closer to a region where it already has a compelling presence.
“It’s pretty darned exciting. It’s not every day that you have a company with the breadth and size and excitement that Lamb Weston has come into a community,” said Kris Johnson, president and CEO of the Association of Washington Business.
Carl Adrian, president and CEO of the Tri-City Development Council, said the economic development agency was told early on that Lamb Weston would likely make Boise its headquarters. But TRIDEC welcomes it as an independent company likely to expand its business here and its civic engagement.
Adrian said he hopes Kennewick will house some of the new positions the company will need to perform administrative duties formerly handled by ConAgra.
Shelby Stoolman, spokeswoman for Lamb Weston, said Columbia Basin operations will operate normally after the separation from ConAgra.
With 321 corporate positions in Kennewick, it is one of the city’s top five private employers. The city is eager to see Lamb Weston take off once it spins off.
“We are always interested in how business is and are excited about any opportunity for them to continue to be successful,” said Emily Estes-Cross, the city’s economic development manager.
Lamb Weston is more than an employer. The Washington State Potato Commission said it’s the largest buyer of Washington-grown potatoes — a crop worth $720 million in sales and $4.6 billion in overall economic activity when processing is factored in.
Chris Voight, the commission’s executive director, said independence will make Lamb Weston more agile as it rises to meet growing global demand for frozen potato products. That’s good for Washington growers, he said.
“We want all of our potato customers to be successful. When they are successful, our growers are successful. When a customer of ours can be more competitive and nimble in the market place, that should also be good for the long-term health of our potato community in the state,” he said.
Voigt is less interested in hosting the corporate offices than he is in the processing plants.
“Our biggest priority is to keep the Lamb Weston potato processing facilities here in the Columbia Basin,” he said.
Johnson said that he shares that view.
Lamb Weston’s myriad local activities is a stabilizing influence on the central Washington economy. Not coincidentally, the company is investing $200 million in a new french fry line at its Richland campus, just feet away from the research and innovation center.
“The Tri-Cities is fortunate to get both parts of the equation,” he said. “You get the production and the processing and the research and development, and some of the corporate jobs too.”
The United Way of Benton and Franklin Counties is another group watching the move. LoAnn Ayers, president and CEO, said the nonprofit met with company leaders in September to map out a transition strategy to ensure the nonprofit isn’t harmed during the transition.
More than half of Lamb Weston’s local employees contribute to United Way through payroll deductions. ConAgra is a strong supporter, providing support for several activities as well as administrative expenses. She hopes that will only grow as Lamb Weston stands on its own.
“They live their mission of being really integrated with the community. We don’t see that changing.”
ConAgra announced it would spin off Lamb Weston more than a year ago with a target of completing the transaction by this fall.
Lamb Weston is expected to begin trading on the New York Stock Exchange under the symbol LW. It will make its first public appearance during an investor day program Oct. 13 in New York City.
Tom Werner, formerly head of commercial food operations for ConAgra, will head the new company as president and chief executive officer.
Stoolman said the company does not expect to announce its formal separation during the New York presentation because it has not completed all the requisite filings with the U.S. Securities and Exchange Commission. The separation is on track to wrap up this fall, she said.
Frank “Gib” Lamb incorporated Lamb Weston as a frozen pea company but soon branched into the frozen potato market, where Lamb is regarded as an early pioneer of techniques to process and cut potatoes for consumer markets.
The company opened its first potato processing plant in American Falls, Idaho, adding and acquiring additional plants and facilities throughout the Northwest in subsequent years until it was the world’s largest processor of frozen potato products.
It has been a subsidiary of ConAgra since 1988, a partnership that helped fuel its reach into European, South American and Asian markets.
CEO: Tom Werner
Headquarters: Eagle, Idaho
Revenue: $2.9 billion (2015)
Business: Global frozen potato products supplier
Mid-Columbia footprint: 4,000 employees, Kennewick corporate office, Richland research and innovation center, farm, numerous processing plants.
Status: Spinning off from ConAgra Foods
Ticker: NYSE: LW*
*Pending completion of separation from ConAgra