2011 R&D Team Winner: Herr Foods Inc.

For our 2011 R&D Team of the Year winner (medium-sized company category), culture eats strategy for lunch.

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Herrs FoodsWhen you've got a taste for munchies, Herr Foods Inc. can fulfill your desires -- 340 ways. This medium-sized, family run company, based in Nottingham, Pa., turns out potato chips, pretzels, tortilla chips, cheese curls, corn chips, pita chips, popcorn, crackers, nuts, pork rinds, onion rings and meat sticks in a variety of shapes, sizes and flavors. Plus salsa. Most are sold under the Herr's brand name.

With 1,400 employees and sales in excess of $250 million, Kosher-certified Herr's is one of the top 10 snack food companies in the U.S., and is growing in distribution throughout the States, as well as Canada and Latin America.

"Our company culture starts with family," says President Ed Herr. "My dad and mother started this company 65 years ago, and they still have influence. The second generation is at the helm and working to pass it along to the third generation.

"When you have brothers and sisters who grew up together working together with good family relationships, it produces a great work environment. We have a high level of respect for each other and mutual love, creating an atmosphere of family within the company. Ultimately, the fringe benefit is happiness, productivity and teamwork."

Founder James Stauffer Herr grew up on his family's isolated chicken farm. "In 1946, at age 21, he wanted more contact with people, so he looked in the newspaper for opportunities," says Daryl Thomas, senior vice president of sales and marketing. "He saw an ad for a potato chip company in Lancaster, Pa., and bought it, the kettles and a truck for $1,750.

"He faced a litany of challenges over the years – the plant burned down to the ground, it was rebuilt, moved, suffered damage from a hurricane, and he faced other setbacks. But Jim continued on tenaciously believing in what he was doing."

From humble beginnings
"I've seen the R&D department grow from humble beginnings, with one person working part time on projects," says Phil Bernas, vice president of quality assurance and R&D. "If we go back about 15 years, we would typically spend 12 hours a month on R&D projects. Today, it's a complex, well-organized process of people dedicated solely to R&D."

"We have rather diverse backgrounds," he continues. "Some have food science degrees, some have a culinary background, some come to us with manufacturing experience, and one has experience with wet chemistry," he explains. "We have five people on the R&D team, with contributions from two others who are not directly in R&D, but work closely with us. One is in manufacturing and one in quality assurance (QA).

"We also enlist the talents from many people in our processing areas, who have a vast amount of experience, and include them in our R&D experimentation. Because of that diversity and range of talent, we get a lot of feedback and good ideas that allow us to bring it all together in the end."

Bernas emphasizes that it's not only a team effort within the R&D group, but also a team effort among manufacturing, QA and R&D. "Our people are very excited to have the opportunity to contribute to the process of developing a product and seeing it go to market."

How does the R&D process work? "We initiate ideas from two different directions," says Bernas. "One is purely R&D-driven ideas, and the other is marketing-driven ideas. Marketing finds out what consumers are looking for, what niche markets haven't been developed and their potential. R&D looks at our process capabilities, what we can do exceptionally well with our equipment and our people. We have many committees in R&D, marketing and sales to generate those ideas and provide direction for the R&D team. We evaluate which ideas to pursue and which ones to take to market," he says.

"Our group is dedicated to being super innovative, and when work is fun you are more successful at it," adds Thomas. "Those in product development have depth of experience, and each person has specialized talents. For example, our vice president of technical services came to us with a snack food industry background; another is a graduate of the Culinary Institute of America. Everyone has an integral role in idea generation. We try to be consumer-centric, respond to consumer wants, fill needs and, in some cases, unmet needs – yielding new opportunities."

Thomas says when they agree on someone's great idea, the next step is consumer research. "We compare feedback to our flavor benchmarks and then prepare prototypes, set up blind in-store tastings using a variety of metrics -- intention to buy, different product attributes they like and affirmation that they like what we think is a good idea," he says.

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