Commentary: Remember the American Crystal lockout in the US?

An interesting story, “Crystal Sugar CEO: We have ticked off big customers in the past few months,” appeared on the web site of the Fargo-based KFGO radio station, written by one of its hosts, Mike McFeely. He says that “large amounts of sugar” was just sitting in the American Crystal silos in Hillsboro, North Dakota, because the company couldn’t sell it due to an “issue with quality.” [1]

He then invited listeners to call in. Some did. One said that sugar was also sitting at the company’s facility in Fargo, again because of a quality issue. Another caller said the issue was oversupply, not quality.

Later on, Mike got an electronic message, reproducing a blog post by David Berg, the American Crystal CEO who likened the labour contract to a cancerous tumor, before the 20-month lockout was imposed in August 2011 on 1,300 American Crystal workers. In his blog, Mr Berg confirms the issue as one of quality, specifically the colour of their sugar, and, adds, that some customers have ticked off (i.e. got angry, annoyed, irritated, furious) when the sugar was outside their specifications.

Industrial users have strict quality control protocols because the sugar (and other inputs) they use today, has to have the same specifications as the one they used yesterday, and the one they will use tomorrow: they cannot change formulas overnight. As a sugar manual reads: “Advanced processes in the food industry and new products, as well as nutritional considerations, brought in their wake specific and sensitive analytical methods to assess sugar quality. These revealed that,…, the small portion of less than 0.1% nonsucrose substances (…) affects the quality of sugar and its behavior during storage and either industrial processing or household utilization.”[2] Usually, technical specifications follow the ICUMSA standards, and colour runs parallel to other quality assessment factors.

According to the article, Mr Berg points to a technical problem, “a sugar cooler that is not big enough to handle the amount of sugar we put out each day,” but some questions still linger – at least in my mind: is this, the not-big-enough cooler, the ultimate cause for the colour-based quality problem with the sugar from American Crystal?  What about the deterioration in the quality of the jobs performed over the 20-month lockout? Would American Crystal be able to recover its previous customers – in an oversupplied market?  

In my humble opinion, two things have been happening. One, it’s clear that the clients have voted with their feet, and went elsewhere for their sugar. Two, maybe, as the saying goes, “the chickens – hatched by the lockout – have come home to roost.”

Thanks to the BCTGM Washington office for calling our attention to the KFGO article.


[2] Sugar Technology, Beet and Cane Sugar Manufacture. Verlag Dr Albert Bartens, 1998, p.84

Permanent link to this article:

1 comment

    • Miriam Wanyama on September 20, 2013 at 7:22 am

    Some people are just impossible to work with.Does it mean that the CEO had forgotten that they are in business and customers opinions should be valued most.Customers are very particular with any slight change in their consumer products.Therefore any one in business needs to be very careful
    Besides,it simply means that the CEO was not consulting his juniors,perhaps they would have had a better input. Am imagining the damage caused to workers too;both financial,social and psychological.A stern action should be taken against the CEO for bringing down such a big investment.

Comments have been disabled.