Sacramento exit ‘only option’ for Blue Diamond, company says
Over the next two years, the closure of Blue Diamond’s historic midtown plant will cost Sacramento a major employer, and empty a 50-acre, century-old manufacturing site in one of the city’s central neighborhoods.
But the move, a Blue Diamond official said Friday, is necessary to protect California almond farmers.
Though Blue Diamond’s label is sold in grocery stores around the world, it operates as a cooperative, owned by its growers. Financial turmoil for the organization would translate into lower payments for Blue Diamond’s farmers. And the industry has been challenged over the last five years.
“The only option now — in order to protect the legacy of the cooperative, and the payments we’re able to give to the family farms who are our members — is to consolidate,” said Alicia Rockwell, chief public affairs officer for Blue Diamond.
Blue Diamond notified employees Friday morning that the site will wind down over the course of two years, eliminating 600 jobs. Rockwell said many of the plant’s employees have worked there for decades. The company said operating out of the historic buildings in midtown has become inefficient.
The announcement, though abrupt, was not altogether surprising: City leaders have fretted the loss of Blue Diamond since the 1990s, and the cooperative has been steadily cutting costs in recent years.
“Our focus at this point — and it’s weighing on us all — is that we take good care and keep our team members safe,” Rockwell said. “Our focus in the months ahead is going to be listening, and taking care of their needs, in order to see this plant through till its last day.”
A turn for the industry
Blue Diamond is the largest almond producer in California, where the Central Valley’s long, dry, hot summers are uniquely suited for almond-growing. The industry has grown into a behemoth here, producing 80% of the world’s almonds, said David Magaña, a Fresno-based senior analyst for Rabobank. Australia and the Iberian Peninsula each produce another 10%, roughly.
Twenty years ago, Magaña said, people were eager to plant almonds. Almond harvesting was becoming more mechanized, which meant labor costs were lower than other crops. Many farmers switched from other produce, like stone fruits, and even some dairy farmers began growing almonds on their land.
The industry continued to grow until 2020, when a combination of weather and economic conditions dealt setbacks to farmers and processors alike.
When the pandemic hit, the export-heavy industry was wracked with supply chain snarls. Then in 2021 and 2022, droughts sent water costs soaring, and costs for fertilizer and other chemicals also rose.
Farmers watered their crops less, and saw smaller harvests as a result. They were paid lower prices for their almonds because of a lingering surplus from 2020 — which had seen ideal weather for pollination, and record yields.
Over the next two years, prices began to rebound. After years of severe drought, California saw one of its wettest winters on record. Pollination season was windy, cold and rainy — but supply chain problems began to improve and inventory came down. Magaña said he believes most growers will be profitable going forward.
Still, the previous years took a toll. For instance, in 2022, almond growers’ average prices were $1.40 per pound, down from $4 in 2014, Magaña said.
Well-situated farms, he said — which operate efficiently and have good access to water — will likely turn a profit. But almonds are no longer the clear choice of crop, Magaña said, as they were 20 years ago.
Looking for buyers
Blue Diamond will consolidate its local manufacturing operations into other facilities in Turlock and Salida — which are nearer, Rockwell said, to many of the cooperative’s almond farmers.
The company is looking for buyers for its property in midtown, which it built in 1914 and today is Blue Diamond’s largest site and its corporate headquarters.
Officials lobbied the company to keep its headquarters in Sacramento, said Barry Broome, president and CEO of Greater Sacramento Economic Council. Blue Diamond said Friday that it would, though it did not specify where.
The move leaves open questions about the future of the expansive property. Broome said he’s hopeful that a sophisticated developer — with strong financial backing and a track record of preserving such buildings — could turn it into an adaptive reuse project. The complex is large enough, he said, to support hospitality or housing. It also has the water and power capabilities to support a data center.
“The real estate is obsolete, from a production standpoint. But it’s really architecturally significant,” Broome said. “It’s just going to take a really smart, creative, well-capitalized developer.”
Former Sacramento Mayor Darrell Steinberg, who served on the City Council in the 1990s when concerns about Blue Diamond’s long-term presence first surfaced, said the closure fits into a broader evolution of the city’s economy.
“We have actively transformed our economy and our future, and it’s occurring in real time from manufacturing to life sciences, to technology, to the creative economy, to food and restaurants,” Steinberg said. “So I’m sad about Blue Diamond, and yet I see it as part of the transition to the next generation of jobs and industries in Sacramento.”
He expressed confidence in city leadership, including Mayor Kevin McCarty, and urged long-term planning to support strategic redevelopment of the property.
“I have complete confidence in the mayor and the council to figure out what’s best for that site,” he said.
Steinberg also pointed to the city’s enhanced focus on economic development and infrastructure investment as critical tools for attracting new industries.
“As we started back in 2016, we now have the economic development department. ... It’s now a significant department within the city,” he said. “We also need to have the means — some form of investment ... in infrastructure so that companies see that we want them here.”
He added: “The role of a modern city and city government in this era is, yes, to provide the basic services, but it is also to be an active partner in smart growth and growing the sectors that are redefining Sacramento.”
This story was originally published June 6, 2025 at 6:19 PM.
