Inside AE Dairy: Explore how Grade A dairy products are made
All sorts of animals serve as guards to protect people and property. Dogs are the most obvious, perhaps. But llamas, geese and donkeys also play the role of defender.
Then there is the gentle dairy cow. At the intersection of Hubbell and University avenues in Des Moines, Iowa, stands Annie, a 2,500-pound, 14-foot-tall fiberglass cow along with her calf Eric. In truth, Annie and Eric are more like greeters to visitors of Anderson Erickson Dairy.
University Avenue is a busy four-lane road near Interstate 235 on the east end of town. Just down the street are the state fairgrounds and behind the plant is a residential subdivision that sprouted up after the plant opened in 1939. Anderson Erickson, or AE as the company is known, got its start in Des Moines in 1930 when William Anderson and Iver Erickson went into business together. (See related article)
From this one plant, AE Dairy manufactures a full range of Grade A dairy beverages and foods, including white and flavored milk, ice cream mix (packaged for retail sale and for commercial use), 50 flavors of Greek and conventional low-fat and nonfat yogurt, buttermilk, whipping cream, cottage cheese, juices, sour cream and dips. It ships product to customers throughout Iowa and to Kansas City, Mo., three hours to the south.
Anderson Erickson Dairy likes to support Iowa businesses, so it works with many suppliers that are based in the state, said Chief Operating Officer/Chief Financial Officer Warren Erickson, a grandson of the founder. It buys milk from Iowa dairy farmers.
Testing for quality
Milk receiving begins at 9 p.m. and continues to 2 p.m. the next day. The plant can receive two trucks and clean two trucks at a time. Flow meters have replaced scales to determine milk volume. Besides milk, the receiving area services tankers of liquid sugar, corn syrup and cleaning chemicals which are stored in dedicated silos.
When a tanker arrives, the milk immediately undergoes sensory testing. Employees taste and smell it, then send a sample to the onsite quality control lab, which operates 24 hours a day. Lab personnel again perform sensory tests and analyze it for microbes, antibodies and components. Dairy farmers are incentivized to deliver clean, high-quality milk, Erickson said. Modern near-infrared analyzing equipment delivers butterfat test results in seconds. Veterans remember performing Babcock tests that took 30 minutes.
A 45-degree walk-in cooler in the QC lab stores samples of milk and cultured dairy products from all the production runs up to their sell-by date. The goal is to have 98% of production meet the end-of-code date. Samples of the day’s production are pulled and tested. For example, fermentation cycles and cultures of yogurt or cottage cheese are tested. The lab uses a bar code system so it can track lots in the event of a recall or other event, said John Just, the quality assurance and research director.
Every Thursday, AE Dairy performs a ritual that dates to the company’s founding in 1930: the taste test. A team of employees tastes everything that was produced in the past week. This is one way in which the company assures itself it is meeting its self-proclaimed “ridiculously high standards.” The standards focus on not only customers and consumers but also the foods and beverages themselves.
The owners sit down with representatives from sales, marketing, human resources and production. Company chairman Jim Erickson (son of the founder) sits at the head of the table and begins the review. He checks the packages for correct labeling, proper alignment and ease of opening. Next comes the taste test. Erickson takes a spoon and digs into a yogurt, for example, or pours a taste of chocolate milk. He passes the package to his left and everyone at the table tries a sample and also inspects the packaging. They are tasting for flavor consistency from week to week, texture, fruit distribution (in yogurt) and other criteria. The weekly tasting is when they critique products in development and competitive products.
Making the Grade A
Fluid milk products make up the majority of AE Dairy’s production. The plant produces six kinds of white milk, six flavored milks, four varieties of egg nog, whipping cream, half-and-half and buttermilk. Other fluid nondairy products are lemonade (regular and reduced-sugar) and orange juice (from concentrate).
Warren Erickson took Dairy Foods on a tour of the plant. Two rooms, named HTST 1 and HTST 2 (Erickson joked about the originality of the names), produce fluid milk products. Milk flows through high-temperature/short-time pasteurizers, homogenizers and flavor vats (when required). It is pumped to one of the nine fillers in the packaging rooms. A newly installed mix-proof valve cluster allows the dairy flexibility in making short runs of products. The ingredients can be routed through the valves and then shut down without having to stop the entire line for cleaning.
Automation, speed and equipment reliability are essential components to any dairy operation, but they are especially so for a small business. (AE Dairy used to hand-pack its cottage cheese first in glass jars, then in wax paper cartons.) The company reported 2013 revenues of $165 million, enough to land at No. 82 on this magazine’s Dairy 100 list of North America’s largest dairy processors. (By comparison, revenues of the largest dairy on the list are $10 billion.)
In HTST 1, one machine fills 8-ounce, 32-ounce and 64-ounce paper cartons. Chocolate milk and egg nog are filled in quarts. (Chocolate milk is available in multiple sizes from single-serve half pints to multiserve 5 gallon bags. Egg nog is also available in single-serve 12-ounce bottles to half gallons.) Another filler handles 2-gallon and 5-gallon bags that are destined for foodservice accounts. A third filler fills plastic half-gallon and gallon jugs. After filling, a tamper-evident seal is applied, showing the company’s commitment to high quality, Erickson said. He added that AE Dairy was the first dairy in the nation to do this.
In HTST 2, 12-ounce PET bottles of chocolate milk run through a filler. At the time of Dairy Foods’ visit, 2% chocolate milk was being filled at the rate of 275 bottles a minute. Mint chocolate and dark chocolate milks are also produced here. The small 12-ounce format is popular with convenience store customers, although the product is sold by other retail customers.
Regardless of the format, the milk cartons are put into bright yellow crates which are conveyed to the cooler. The warehouse consists of five levels of storage. Two cranes move inventory on and off racks.
A computer-controlled real-time inventory system keeps track of production. Employees fill orders, which are sent to the shipping department and then out on the road to customers throughout Iowa and Kansas City. The company operates 150 routes and owns 179 trucks. It maintains more than 406 pieces of equipment in the garage on the grounds of the company.
An on-site blow-molding operation makes half-gallons and gallon containers. Erickson said it is more economical than outsourcing the operation to a third-party or buying jugs. Plus, the company likes to control as much of the manufacturing process as it can, he said. Finally, blow molding is a more sustainable practice. Instead of receiving a truckload of jugs, which are essentially air, the dairy receives 50,000 pounds of resin which is molded into gallon and half-gallon containers for milk and juice products. The excess resin from the mold is trimmed and reused.
Cultured dairy production
The same milk that is processed into beverages is used to make cottage cheese and yogurt. The cultured dairy foods are made in separate rooms. In one part of the plant, cottage cheese curds are set and cut in three 34-foot-long vats.
“We found our niche,” said CEO Miriam Erickson Brown, daughter of Jim Erickson and sister to Warren. That niche is as a manufacturer of high-quality foods and beverages. “We don’t skimp on the ingredients,” she added.
The dairy buys a lot of ingredients, especially cocoa, sweeteners, fruits, spices and flavors. It uses European cocoas for chocolate milk, gourmet-quality vanillas and premium fruit for yogurts, and custom-blended spices for sour cream-based dips. Chocolate milk is made with three kinds of cocoa. The dairy makes 50 flavors of conventional and Greek yogurt. Company visits to area farmers’ markets leads to flavor combinations for yogurts like apricot-raspberry or strawberry-rhubarb.
AE Dairy has been making yogurt since the 1960s. Five years ago, it added Greek yogurt to its lineup.
On the day of Dairy Foods’ visit, the dairy was making blended nonfat yogurt in another part of the plant. The white mass is fermented in tanks before fruit and flavor are added and blended. The white mass is then pumped to a filler. Six-ounce cups of AE YoLite Peach rolled down the conveyor, were spot-packed, palletized and conveyed to the cooler. Greek yogurt is packaged in distinctive 6-ounce tapered scround-shaped cups.
Although AE makes ice cream mix, egg nog and other higher-fat products, it still finds itself with excess cream, which it sells to other customers. The ice cream mix is packaged in half-gallons for retail sale and in 5-gallon bags for foodservice customers who use the vanilla and chocolate mixes to make soft-serve products, like cones, shakes and sundaes. The mix plant, which has its own room within the dairy plant, runs five days a week. Dry ingredients are blended in a separate area to mitigate dust and powders.
As mentioned, automation and reliable equipment help AE Dairy manufacture efficiently. The company’s sustainability efforts also help with the bottom line and its carbon footprint. The dairy uses a bio-diesel fuel in its 400-vehicle fleet. It washes the fleet (and milk crates) with recovered wash water. In addition, it makes new milk cases from reground plastic and bundles cardboard packaging for recycling.
Annie the cow and Eric the calf occupy a small corner of the 22-acre Anderson Erickson Dairy campus. A 321,000-square-foot building contains the milk processing areas, the cultured products production rooms and ice cream mix plant. The site also includes corporate offices, a maintenance garage, and employee and truck parking. With a busy street on one side and a residential area behind it, the company is landlocked. It will have to look for real estate elsewhere if expansion is to occur. But that’s a long way off. By then, Eric might well be a bull and have sired a dairy cow of his own. And perhaps a fourth generation of the Erickson clan will be running the business.
All photos by Vito Palmisano