TreeHouse Foods: Fast Follower, Innovator

2010 Processor of the Year, TreeHouse Foods', R&D philosophy: 'Brand-level quality is just the starting point.'

By Mark Anthony, Ph.D., Technical Editor

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We knew those black-and-white labeled cans and jars of food staples back in the 1970s simply as "generics." Some tried to claim they were comparable to the national brands all of us recognized, just a little cheaper. In spite of the double-digit interest rates and high inflation of the times, generics didn't catch on. That stenciled label implied a compromise in quality before you even opened the container.

But from such disastrous mistakes come paradigm shifts, and a market for generics-done-right opened wide. Today, competition for shelf space comes from private label foods that look nothing like generics. And if they're created by Oak Brook, Ill.-based TreeHouse Foods Inc., there is no compromise in quality. The company excels in its niche in the nearly $70 billion private label food and beverage manufacturing arena as parent to Bay Valley Foods Inc., E. D. Smith Ltd., Sturm Foods Inc. and S.T. Specialty Foods.

"Private labels are at least as good as the brands," says Terry Bleecker, senior director of R&D for Bay Valley Foods. Bay Valley's San Antonio Farms plant specializes in red sauces, such as salsas and pasta sauces.

"Brand-level quality is fine, but we think of it as the starting point," says Bleecker. "Then we ask, how can we do it better? We look at every step in the creation of a new product and determine where we can improve the process to meet the goal of delivering a superior experience to the consumer."

At the San Antonio Farms plant, fresh vegetables are the key to making premium salsas and pasta sauces. "We deliver the freshest possible fruits and vegetables to the customer," says Bleecker. You can see the philosophy played out in every step of the San Antonio operation, from the creation of a recipe, to the way fresh vegetables are handled, to the manner in which they are cooked, sealed and packaged. This isn't just hyperbole to Bleecker.

"Brand-level quality is fine, but we think of it as the starting point. Then we ask, how can we do it better? We look at every step in the creation of a new product and determine where we can improve the process to meet the goal of delivering a superior experience to the consumer.

– Terry Bleecker, senior director of R&D, Bay Valley Foods

Bleecker points out the creation of a premium product starts with an idea that could be in any stage of development. A customer – that means a food retailer -- may have a precise formulation of ingredients or a distinctive flavor profile of salsa in mind that works as a local favorite. Another opportunity is a customer that could be looking at a reformulation to expand to other markets. Or a customer may begin a project with nothing more than an idea. For example, a famous chef may want her pasta sauce created to personal specifications, but is not quite certain how to get there on a larger scale. The R&D team gets them to the finish line.

Strategizing such progression presents definite challenges, foremost of which is creating consistency on a larger scale. That's where the Bay Valley Foods R&D team goes to work. Bay Valley product developers head for the kitchen to create scalable recipes based on the input from the retailer or chef. Prototypes are generated for approval. Tweaking the recipe to match the customer's style and preferences is the artistic side of the R&D process, and it's based on years of experience in creating distinctive flavor profiles.

Scaling up recipes requires the same level of detail as their creation. The heat of the salsas is precisely controlled so "hot" has the proper degree of fire and "mild" is dependably calm. This is accomplished by innovative use of extract of capsaicin, the beneficial phytochemical that makes jalapeno peppers hot. Capsaicin is extracted from hot jalepeno peppers and is added in a controlled manner to ensure a consistent level of heat. For salsa production, the facility uses no-heat jalapeño peppers that have little to no capsaicin, so many salsas start out as mild, and then capsaicin is added based on the customers requirement for heat.

Private Label Categories
TreeHouse claims it has plenty of room to grow in the categories it already participates in (at left above), while future acquisitions may take into the categories it’s not in. Source: A.C. Nielsen data, TreeHouse analysis

When it comes to the cooking process, the same attention to detail carries through. Here, such seemingly mundane aspects as the shape of a kettle take on larger importance because all vegetables must be cooked at the same rate without overcooking. The wrong shaped kettle means some vegetables cook longer than others; that compromises quality and is unacceptable. If cost is an overriding concern for the customer, California vine-ripened aseptic packed tomatoes may replace fresh tomatoes.

The proof is in the pudding — or salsa. And in this case the proof comes in hot or spicy, savory, tinged with raspberry or fresh tomatillos (where you really taste the difference). This scrutiny over finer details is important when servicing multiple client types, each with their unique idea of how salsa or pasta sauce should taste. And this attention to detail was lacking in those 1970s generics, but is symptomatic of modern private label foods, and certainly of those manufactured by TreeHouse.

Innovation, superior quality and meeting consumer taste expectations are themes that run throughout the TreeHouse Foods family. "Each operating company has an R&D team that focuses on four distinct areas of development: new products, strategic innovation, packaging development, and processing and production efficiency," says Nick Latorre, vice president of R&D for Bay Valley Foods.

"Each product category also has its own director or senior director of R&D to manage the resources and projects within the category," he continues. "And each R&D team has a specific area of expertise." For example, at the Bay Valley plant in Pittsburgh, the focus is soup. For E.D. Smith, in Winona, Ontario, or North East, Pa., it's jelly and salad dressing. At Manawa, Wis.-based Sturm Foods, dry powders and oatmeal are specialties. The area of expertise in Brooklyn Park, Minn. is macaroni and cheese. And at other Bay Valley plants across the country, specializations are aseptic cheeses, non-dairy creamers, and pickles and peppers.

"With such a broad array of products and processing technologies our R&D teams have the ability to leverage these platforms to create innovations on a very large scale," says Latorre.

Importantly, lessons learned at one R&D facility are referenced at others so no one has to reinvent the wheel, just build upon successes. "Our aseptic cheese team was required to re-create many of its formulas to convert to trans fat-free products for many large customers," says Bleecker. "The San Antonio facility was not immediately affected but within 12 months also had to re-create trans fat-free formulas for acidified cheese sauces produced in the San Antonio facility."

Instead of starting from scratch and creating new formulas with new oils, Bleecker immediately brought the problem to the aseptic cheese R&D leader. Within 15 minutes, Bleecker had a new trans fat-free formula for use in San Antonio. Another example: "The specialty of San Antonio is red sauces — predominantly salsa and pasta sauce," explains Bleecker. "But we also make similar red sauces in two other facilities. The other facility R&D teams could call San Antonio for guidance on red sauce formulas or use existing formulas to start a new project in their plant."

Looking toward the future, one potential new area of development that Latorre and Bleecker see is the creation of "healthy meal solutions" and convenient high-quality side dishes. "People have forgotten how to cook, and many frozen choices aren't that healthy," says Bleecker. "Meal solutions are potential remedies for this problem, providing the end user with great food and some pride in their creation."

In an era when giant companies struggle to create a brand everyone recognizes, TreeHouse Foods strives to be the leader behind the scenes, providing services to store brands and allowing them to effectively compete with the big boys.

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