“A Little Help from My Friends” could serve as a theme song for two snack food companies in the Pacific Northwest, where a spirit of cooperation tends to quell competitive urges.
Bridgetown Natural Foods in Portland, Ore., is a copacker that bills itself as an innovation and supply-chain partner for early-stage firms in the natural foods space. Eugene, Ore.-based Wildtime Foods specializes in small-batch production of granola, cereal and trail mix distributed in bulk or single-serve packages under the Grizzlies brand. Both faced capacity constraints when they began working with the Oregon Manufacturing Extension Partnership (www.omep.org), and although facility expansion and site selection were part of the assignment, the help they really needed was something else entirely.
Bridgetown (bridgetownnaturalfoods.com) began production in 2011 in a 140,000-sq.-ft. plant that will grow to 183,000-sq-ft. in the spring. Rather than take an asset-available approach, the company strives to collaborate with clients focused on organic and natural snack bars and energy bars. It was founded as a public benefit corporation -- a certified B Corp. -- and is selective about the entrepreneurs and early-stage brand owners it works with, seeking out those focused on fair and profitable growth and an established proof of concept.
All of Wildtime’s production, on the other hand, is dedicated to its Grizzlies granola, cereal and trail mix (www.grizzliesbrand.com). “There were certain processes that were amazingly efficient and intricate,” relates Brad Averill, cofounder, but after 30 years, the company had developed some inefficient practices in a facility it had outgrown. New equipment would dictate new processes in a larger plant, and leadership viewed a consulting relationship with OMEP as an opportunity to eliminate production constraints and improve efficiency.
Engineers, former plant owners and other manufacturing professionals provide guidance through OMEP, with a particular emphasis on lean manufacturing. “In this industry and this region, reducing waste is very important,” says Whit Hemphill, Wildtime’s other founder, though lean training stopped short of grooming future black belts. Laid back might best describe the culture of both the firm and its customer base. A regimented approach to production efficiency had to be avoided, “or there would be a revolt,” Hemphill shudders.
That didn’t preclude using the Six Sigma technique of spaghetti diagrams to identify wasted motion in processes. Isolated tweaks in discrete activities over the years created a spaghetti diagram that laid bare the overall inefficiencies. With expert guidance, Wildtime took a holistic approach to process flow. “It was a culture change for the way we make things,” says Averill.
An obsolete oven was an obvious impediment to more throughput. Quality improvements came simply by replacing it with a revolving rack oven that handles 10 times as many baking trays in a new 8,100-sq.-ft. facility. But that also necessitated upstream and downstream equipment improvements as well as different work patterns for five production workers. OMEP consultants guided Wildtime in the purchase of $500,000 in new equipment that more than doubled productivity and paved the way to a $400,000 annual increase in sales.
Helping small and mid-sized companies comply with the Food Safety Modernization Act is another OMEP focus. Wildtime is among the small businesses that had to comply with FSMA’s preventive controls rules this year. “Technically, it’s in place,” offers Hemphill. “Practically, we’re working on it.”
The company as a staff of 37, with one person dedicated to FSMA compliance. That worker recently participated in a certification program for preventive controls qualified individuals (PCQI) presented by the Northwest Food Processors Assn., which has certified more than 100 PCQIs, mostly at smaller food companies, in the past year.
Empathy for the little guy
Two million snack bars that are extruded, slab-formed or enrobed roll off the production lines each day at Bridgetown. When another line is commissioned next year, that figure will increase.
Empathy for entrepreneurs with a focus on healthy eating is part of the firm’s DNA: CEO Dan Klock’s wife, Kelly Flatley, cofounded Bare Naked granola in 2002. She developed the product in rented commercial kitchen space and nurtured growth until Kellogg Co. acquired the brand for $60 million five years later.
Bridgetown’s goal is to serve as a reliable manufacturing partner to the waves of food entrepreneurs who need help to scale up their businesses, according to Klock. Most of production involves new-to-the-market snacks, atypical of the model used by many contract manufacturers.
“We take a value-added approach and help companies with formulation and raw material sourcing,” he says. “We try to find brands that we want to invest in.”
The formula is working: Most of three-shifts-a-day, five-days-a-week throughput involves product for companies that have worked with Bridgetown since 2011, including four brands that were acquired by larger corporations.
Architectural engineering firms assisted in process issues and equipment selection. Three high-throughput topload cartoners from Bosch Packaging’s Sigpack division were a key addition. The machines handle multiple pack configurations simultaneously and helped boost output 40 percent.
Klock turned to OMEP for help with management systems, maintenance practices and training, part of the effort to attract and retain the talent needed to continue to grow.
“Food companies have their own unique challenges,” allows Aaron Fox, OMEP president, but they share issues common to all manufacturers. One of the most pressing is recruiting and training “the skilled work force they need to support growth,” says Fox.
“People assume if you have equipment in place and the capacity to produce you can support growth, but if you don’t have the people to make sure the equipment is running properly and creating value, you have a looming problem.”
OMEP works with the Oregon Talent Council on Smart Talent, a program that recruits people with an aptitude and interest in maintenance and other job functions. They join at entry levels and receive the training to create a career path. “In Oregon, the skilled-worker job gap is more than 50,000” and growing, Fox points out. Lost productivity and revenue is pegged at $2.34 billion.
He believes skilled workers and simplified supply chains will supplant outsourcing and low-cost labor as drivers in manufacturing. Localized manufacturing and distribution have catapulted Bridgetown to $100 million in annual revenues. Growth will continue, Fox predicts, because the lengthy supply chains needed to support mega-plants result in diminishing returns due to costs associated with scale that regional manufacturers like Bridgetown do not face.
That advantage will evaporate, however, if small and mid-sized food manufacturers are not able to tap the expertise and support of other organizations to address their weaknesses. Fortunately for them, the support network is growing.
“It strikes me that there’s a much more collaborative approach to business in the Northwest,” observes Wildtime’s Averill, a transplant from the Midwest. As an example, he cites Wildtime’s relationship with Glory Bee Foods, another Eugene, Ore., firm. The companies could be viewed as competitors, he says, but the relationship evolved as more of a partnership in serving the natural and organic audience.
The Northwest is not unique in nurturing small companies and food entrepreneurs. OMEP is one of 50 manufacturing extension partnerships. Trade associations in other regions also have gone beyond lobbying to address the day-to-day needs of their members. Product development and sensory perception labs like Oregon State University’s Food Innovation Center in Portland are assisting early stage companies across the country.
Collaboration and assistance levels the playing field and nurtures overall growth in the food industry.