The Van Trump Report

J.R. Simplot… Great Rags-to-Riches Story!

I really like the Simplot family and the folks they have working inside their business. They have always treated me and my family very well. I’ve also always appreciated the background story on how the business was built by the founder J.R. Simplot… Good stuff!!!

J.R. Simplot, who passed away on this day in 2008 had the inherent ability to see possibilities where others saw obstacles. He also had the resolve to act on them. Simplot struck out on his own as a 14-year-old after his father refused to let him attend a basketball game. The story is his mother gave him $20 in gold coins, and he moved into a $1-a-night hotel in a nearby town. Never passing up an opportunity, J.R. hustled up a little more money and purchased a rifle, an old truck, and around 600 hogs. 

One of J.R.’s earliest innovations was a low-cost way of feeding his hogs when the markets fell. He used his profits from that to buy a little farm machinery and six horses and became a potato farmer. After an argument with his partner, J.R. won a coin toss and full ownership of an electric potato sorter and expanded to all phases of the potato industry. It took Simplot less than 10-years to become the largest shipper of potatoes in the West, with over +30 warehouses in Oregon and Idaho.

Simplot would go on to supply much of the dried potatoes and vegetables consumed by US troops in World War II, and interestingly, when wartime shortages made it difficult to buy fertilizer, J.R. built a manufacturing plant in Pocatello, Idaho, and produced his own. After the war, technology was offering up modern conveniences like refrigerators, freezers, as well as other kitchen appliances, and Simplot saw an opportunity with the frozen french fry. Unfortunately, busy housewives weren’t moved by his innovation as at the time folks felt their fries tasted best when cooked in hot oil. 

Not giving up, Simplot’s next move was to find institutional customers and restaurant owners who would recognize the labor-saving value of frozen fries. By 1965, he would meet with Mcdonald’s founder Ray Kroc, who believed that by switching to frozen fries he could improve the uniformity of the end product for customers as well at the same time cutting costs. The following year Simplot’s fries were in Mcdonald’s and by year-end the french fry was one of the most profitable items on the menu. 

J.R.’s cleverness and determination put his company on its innovative course and folks say he had a simple and fairly easy method for judging the right opportunities… “if it’s not going to pay off for our customers, it’s not going to pay off for us”. 

On a side note, J.R. personally made a big early investment in a start-up company called Micron Technologies, which made “memory chips”. Word on the street is that Simplot made hundreds of millions of dollars on that early investment in Micron. A running joke was that Simplot was a true potato guy and wanted to invest and make chips of any kind:) 

J.R. was able to blend the commonsense lessons from his youth with a gambler’s intuition and a shrewd businessman’s judgment to build an incredibly diversified international food and agriculture business that happens to still be family-owned since its inception in 1929. The Simplot Company currently processes nearly a million pounds of spuds each day and owns about a third of all the frozen french fry business. The company has over +13,000 employees with sales of over +$6 billion. What an amazing rags-to-riches agricultural success story! (Source:frenchfriesmachine.com, nytimes.com, simplot.com)

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