September 1, 2004
by James Dudlicek
Old Home’s own brands and co-packing partners flourish due to manufacturing acumen at bantam-size St. Paul plant.
Officials at Old Home Foods say the company is growing so fast they’ll need a new plant within five years.
In the meantime, it’s clear they’re making the most of what they have at their compact processing facility in a building shared with the company’s corporate headquarters on University Avenue in St. Paul, Minn.
Fronting on a retail corridor and bounded by a residential area, the plant likely goes unnoticed by most motorists heading through the heart of Minnesota’s bustling capital city, unaware that some of the state’s top-selling yogurt, sour cream and other cultured dairy products are made there.
It’s from this 30,000-square-foot, two-level facility, which dates back to the turn of the 20th century, that Old Home supplies its 32 direct-sale distribution routes and other retail customers. Sour cream, dips, yogurt, cultured soy, organic and natural cultured dairy beverages are made at the plant.
“One of the things we pride ourselves on, because of our size, is being quick and nimble,” says Robert Brooks, vice president of operations. “The culture at Old Home has always been to manage resources closely and put as much behind your brands as possible.”
The genesis for all of Old Home’s cultured dairy foods takes place on the plant’s second floor, where milk is pumped up from the delivery bay for general processing.
The plant receives up to 150,000 pounds of milk every day, primarily from Wisconsin’s Ellsworth Cooperative. Organic milk is supplied by Organic Valley in Chaseburg, Wis., while soymilk used for co-packed products comes from Northern Food & Dairy in Alexandria, Minn.
All milk is tested before it’s released for HTST pasteurization. The pasteurized milk is pulled from two pasteurized tanks and moved to the blending tank, then to the mix tank. “All of our final formulas are batched up here,” Brooks says.
From there, the bases formulated specifically for each type of cultured product are sent on to the plant’s various production lines.
The newest line churns out Old Home’s popular yogurt smoothies, introduced a year ago with a light version launched earlier this year. Four new culturing tanks are dedicated to the drinkable yogurt line. Along with the new filler for the drink line, they are part of a $2 million investment, Brooks says.
The tanks yield about 6,500 gallons of total culturing capability, helping Old Home produce 90,000 to 100,000 10-ounce bottles of drinkable yogurt on each of the plant’s five weekly 10-hour shifts.
Yogurt base is piped into the filling room to the flavor vats. Brooks explains the smoothies are composed of yogurt base and a water/pectin solution. These components are combined and homogenized for stabilization before flavors and, if needed, colors are added; up to seven flavors are run daily. This combined mixture then moves on to the filler.
Plastic bottles are fed into the line’s new 36-head rotary filler, which Brooks says will soon be equipped with a cap elevator to mechanize the currently manual task of keeping the machine supplied with bottle caps. “We’re continuing to invest in this operation,” he says.
Bottles are filled with product that has passed through a metal detector, then are sealed with tamper-evident caps. Samples are taken from the line every 15 minutes to be weighed, using a scientific calculation to determine whether or not the weight is off enough to warrant adjustment of the filler. Sealed bottles eventually wind up downstairs for packing, storage and shipping.
There are four production lines on the first floor, handling various sizes and varieties of yogurt, sour cream and dips. There’s also a moveable bulk line — designed for 5-, 20- and 40-pound bag-in-box — that’s set up when needed.
The products made here progress in a similar fashion; plastic cups are filled and a foil seal is applied, followed by a plastic cap.
The next step on the line is where Old Home truly differs — at least for the time being — from most of its counterparts in the industry.
Brooks says 90 percent of the plant’s Old Home-branded products is distributed on 32 — “soon to be 33,” he notes — DSD routes, and a significant amount of that product reaches retailers in wire baskets.
“Wire dictates our flow and has created some confinement as a result,” he says. “The upside is it’s very easy to ID the products. For the most part, it’s going by the wayside.”
As a result, Old Home will be making a “significant leap” in its jump to film-wrapped bundle packaging, Brooks says. Already, Old Home products are emerging from the plant in clear film-wrapped cardboard flats.
Old Home recently installed the latest in shrink-tunnel technology, allowing multiple sizes and packs of products to be wrapped at a rate of 55 to 60 finished packages per minute. “That allows us to run our fillers at top speed, which is over 300 bottles a minute,” Brooks says.
Fed into the machine, cardboard flats of 12 bottles or cups move onto a sheet of clear film, which sticks to the bottom of the flat. The machine pulls the sheet over top of package, which then enters the tunnel for heat shrinking.
Brooks notes that a move completely away from wire baskets won’t be a cake walk because Old Home’s current inventory system is based on them. “We’ve got a number of initiatives that will allow us to move away from wire in the next eight to 12 months,” he says.
On the upside, getting rid of wire will help with employee ergonomics and reduce repetitive-motion tasks, Brooks says. Plus, the company expects storage capacity to “increase significantly” because the new packaging format reduces the space between cups in a bundle of product, he says.
In the meantime, life goes on. Cups of yogurt, filled four at a time, come out of the filler and are sorted into groups of 12. Each dozen is picked up by suction and placed into a paperboard tray, which are placed four each in wire baskets. Sour cream and dips get similar treatment.
“We originated snack dips in our market,” Brooks notes, explaining that while other dip makers went to a sour cream base for their products, Old Home has stuck with its original formula and continues to outsell its regional competitors.
That original-recipe dip, along with its other cultured cousins, ride in their wire baskets along a chain in the floor into the cooler, which maintains a constant 38 degrees F. Some order pickers fill baskets, while others pull baskets for shipping.
“Our inventory turns are very high,” Brooks says. “Our DSD [system] speaks to that. We control our inventory and what hits the shelf. It’s pretty tight and it keeps us aggressive.”
Plant Be Nimble
Old Home processes up to 800,000 pounds of product each week, including organic milk and soymilk in varying amounts based on customer requirements. The plant co-packs Silk cultured soy for Dean’s White Wave division, along with Stonyfield Farm organic smoothies nationally and Oberweis yogurt sold in the Chicago metropolitan area.
Old Home has a knack for juggling multiple formulations for co-pack customers as well as its own brands, resulting in greater versatility as a company. What it lacks in size, it seems to make up for with tenacity.
“It speaks to the ability of Old Home Foods to grasp complexity,” Brooks says of Old Home’s processing prowess. “The first thing anyone says here is not ‘can we do it,’ but ‘how can we do it?’ It carves us a niche as a co-packer. They [competitors] are packing the same product under different labels. We’re packing different products under different labels.”
Of course, quality is paramount, leading to such procedures as conducting quality testing at every stage of production. “This organization probably has more checks and balances to ensure the quality is what the consumer expects,” Brooks says. “It raises the bar for everybody else. It’s another example of how Old Home prides itself on quality.”
But even excellence has its drawbacks. In Old Home’s case, it’s the growth that can scarcely be contained at the company’s current location. “At the pace we’re growing at, we probably won’t be at this location in five years,” Brooks says. “But in the meantime, we plan to bring more efficiencies to this plant.”
Nuts and Bolts
Built in the early 1900s, the plant has had several additions as well an extensive refacing to protect the façade placed on the building when the whole structure was picked up and moved when University Avenue was widened in the 1930s.
“Like most plants of this age, the current use and the original design are different lifetimes,” Brooks says. “This facility was built to process and package fluid milk. Its original owners sold the plant to Old Home Foods in the 1970s and the plant began the conversion from fluid milk to cultured dairy products.”
The facility is home to 65 of Old Home’s 105 employees, including management, quality assurance, R&D and plant employees. The plant operates on four- and five-day work schedules, one shift each for production and sanitation.
“We will produce approximately 30 million pounds this year and we have the capacity to double our volume through additional shifts or days,” Brooks says. “Our processing design allows us the flexibility to use HTST with different hold times, or to vat pasteurize.”
In late 2002, Old Home commissioned its aforementioned new packaging line to fill bottles of yogurt smoothies. The company purchased and installed a new 36-head rotary filler supported by an unscrambler and fed to a cartoner. “This gave us the capability to package multi-packs of bottles of various sizes,” Brooks says. “We also added raw storage, culturing capacity and a new glycol system to support the new venture.”
Working in an older, compact facility makes shrewd use of innovative technology and efficiencies all the more important. As one means of ensuring quality, Old Home uses HEPA-filtered air, treated with ultraviolet light, to pressurize its cultured tanks and filler in the bottling area. “This approach gave us immediate success with minimal capital investment,” Brooks says.
Because of the company’s complex product mix from its extensive co-pack clientele, lab testing is critical to the success of producing allergen-free products. “We perform extensive tests using the S-ELISA (sandwich enzyme-linked immunosorbent assays) method, which gives us the ability to detect milk allergen concentrations as low as 1 part per million,” says Sandy James, technical services manager. “This testing ensures that our soy products are dairy-free.”
Further plans call for additional automation on the drink line to eliminate hand casing, along with redesigning the plant’s processing flow to reduce line loss and improve quality design.
In addition to the repetitive-motion issues addressed by continuing to automate packing, there’s also an issue of efficiency, as exemplified by the film-wrapped cardboard flat packaging installed on the cup yogurt line. “This was once manned by three people packing cups at 220 units per minute,” Brooks says. “We are also evaluating the way we send product to market for improved ergonomics.”
A test in the offing for retiring the wire basket distribution method is expected to “improve working conditions for all employees involved with the distribution channel, from packaging to delivery,” he says.
Getting it Right
Old Home uses a combination of annual internal auditing to assess deviations from processing standards, along with monthly compliance to good manufacturing practices. The company has started to employ an external auditor “to help us raise the bar and to point out emerging issues that we may not be aware of,” James says, adding that this auditor is also used to help the company identify opportunities to improve the quality of its products.
“We do conduct audits of our co-manufacturers, and have conducted audits of suppliers,” she says. “We have recently developed a supplier/co-manufacturer quality expectations program that is under review prior to implementation.”
Brooks explains how Old Home approves its ingredient suppliers. “Our suppliers of ingredients are required to supply us with COAs (certificates of analysis),” he says. “Our co-manufacturers are required to supply us with pre-shipment samples for evaluation. We also conduct scheduled phone conferences with our co-manufactures to help nurture the partnership and to work together to improve the quality and service, and head off obstacles that would affect the quality of our products or the servicing of our customers.”
Food safety is the company’s number-one concern, Brooks stresses. “We use a series of checks and balances to safeguard our customers and consumers, starting with our sanitation program, which we have expanded in the past six months,” he says. “We check chemical strengths, use ATP swabs and perform visual checks to verify that our equipment is clean. In order to run our soy products, we have to constantly monitor our processing and packaging to ensure no dairy components find their way into the soy products and vice versa.”
Old Home implemented a HACCP program more than 10 years ago and continues to maintain and update it. The plant handles not only dairy and soy products but also a crab dip, which requires compliance with HACCP standards for seafood.
In addition to its proactive testing program prior to and during processing and packaging, the company holds all products for 24 hours after packaging. “During the 24 hours, we review the products packaged for compliance to composition standards, microbiological standards, sensory compliance, weight control compliance, allergen standards and HACCP compliance,” Brooks says. “Once standards are satisfied, the product is released for staging for delivery.”
Old Home’s products have up to 60 days of shelf life from the time of manufacture. “We sample our products at the beginning, middle and end of each run,” Brooks says, “and retain samples to validate shelf-life stability.”
And in these dangerous times, new concerns have arisen. “Our bioterrorism risk assessment identified a need to improve our security surveillance during the weekend,” Brooks says. “As a result of that assessment, we hired a security agency to monitor our facility on the weekends and holidays. Other times, we have personnel in the facility. All visitors must be visually screened prior to being allowed access to the building. Once allowed access, they will receive a badge and then be escorted during the entire visit.”
While some dairy processors might chafe at the idea of dealing with soy, Old Home has embraced the challenge of incorporating it into its processing routine.
“The introduction of soy into a dairy operation, of which both products are allergens, required a great deal of pre-evaluation of processes,” Brooks says. “We had to establish a packaging and processing strategy to prevent cross-contamination. We initially started out packaging all our soy products at the end of the week. Over the past year, we learned that it was best to package the soy at the beginning of the week, especially as we took on another national-level customer that would lead us into new products, which were organic dairy-based.”
As the company learned how to segregate soy products and ensure effective sanitation practices, Brooks explains, it took on a customer that needed organic-based drinks. “As with soy, but to a lesser extent, we had to segregate our ingredients, and schedule our production to ensure no cross-contamination,” he says. “The additional challenge of the organic product was the lack of preservatives, thus having to maintain the highest level of sanitation possible to provide the maximum level of shelf-life performance in a facility designed over 90 years ago. Through the use of UV systems for air handling and a ridged sanitation program, and consistent and constant monitoring, we were able to meet the expectations of what has become a strategic partnership.”
In addition to managing the processes and packaging schedules, another significant challenge was isolation of ingredients. “We had to also learn how to accurately and expeditiously test for dairy allergens in soy, at parts-per-million levels,” Brooks says. “However, the most important challenge was all the training for the expanded production, employee movement that new jobs create and education regarding allergens and organic materials that was needed.”
Overall, Brooks says, adding soy and organic products to the plant’s lineup forced the company to rethink how to manage its operations, from receiving all the way through to storage of finished goods. “Every aspect of the conversion process was impacted as each of the products was launched,” he says. “We now have a few years of experience, which makes us somewhat unique when compared to other dairy operations.”
Investing in People
The key to Old Home’s quality programs, Brooks says, are its employees who work every day with ingredients, packaging materials and equipment needed to generate finished goods. “Our employees are our last opportunity to prevent a defective product from being sent to a customer or eaten by a consumer,” he says.
Old Home recently implemented a safety incentive plan that rewards employees on a quarterly basis for working safely. “We use the ‘stop light’ approach to raise awareness within the plant,” Brooks explains. “Every morning or afternoon as they clock in, they are made aware of the current status via a standard traffic stoplight that hangs nearby. If the light is green, we know we have had a safe workday with no recordable accidents. Yellow indicates a recordable accident has occurred, and red means an accident resulting in an employee missing work has occurred. We continue to emphasize the importance of reporting all accidents, most of which are not recordable but require follow up by the safety committee to see how a situation can be improved upon. Our safety committee meets bi-weekly with one goal in mind — raising awareness.”
On a more personal level, Brooks says the company creates a great environment in which to work. Among the signs of that family atmosphere is an operator who taped family photos behind the glass of his touch-screen panel for a few touches of home while at work.
“I think Old Home Foods employees have learned to work hard and have fun. A lot of operations forget to have fun,” says Brooks, whose office looks out into the production area. “Sometimes I’ll look up from what I’m working on and I’ll see that a plant employee has put up a sign that reads ‘good morning’ with a smiley face drawn on it on my window.”
Brooks, who came to Old Home after stints with Marigold Foods in Minneapolis and Kraft’s dairy division, notes that most of the company’s current management formerly worked for larger companies.
“We know how it’s done there. We work hard to meet a difficult mandate: do it the best we possibly can without overkill and too much flash,” he says. “One of the things that attracted me to Old Home Foods really was the people. There’s a lot of investment backing the people here.” df$OMN_arttitle="Small Wonder";?>