Why did Kettle Foods build a new $22 million, 73,000-sq-ft potato chip plant at Beloit, WI? Simple: It needed the capacity. But why did the company go to the extra effort and expense to make this a "green" facility, adhering to strict environmental and energy-conserving procedures for design, construction and operation? That question, too, has a simple answer.
"It’s in the DNA of our brand," said Tim Fallon, president and general manager, North America, Kettle Foods, Salem, OR.
Now in its 25th year as a potato chip producer, Kettle Foods continues to take a leadership position in environmental stewardship. "If you look at our history, sustainability is business as usual for Kettle Foods,"Mr. Fallon said. "We’ve been doing this since the start of the business."
The company’s headquarters facility at Salem has one of the largest solar arrays in the Pacific Northwest, and it recycles its used cooking oil into biodiesel. Wind power and wetlands restoration represent other important sustainability initiatives taken on by the company.
Opening its second US location, the company opted to follow Leadership in Energy and Environmental Design (LEED) principles, developed by the US Green Building Council. "With Beloit, we wanted to make a bold statement," Mr. Fallon explained. "We went aggressively after Gold LEED certification, and this is the first food processing facility in America to earn that standing. Yes, it was more costly to build the plant this way, but it’s what the brand is all about."
TIMELY ADDITION. At the official ribbon cutting in mid-September, the new facility already was running a full 24-hour schedule, five to six days a week. It officially started up in April. The need for rapid progress dictated a design-build strategy for Beloit, and timely completion was vital.
"Our business is increasing rapidly," Mr. Fallon stated. "In 2005-06, we were up 25%, and this year, we expect to be up 40%. The speed of this project was important, if we were going to meet rising demand."
Such growth is unusual among snack foods lately, according to Mr. Fallon. He described the regular potato chip market as soft,"but premium chips like ours seem to be growing at double-digit rates."
For Kettle Foods, the fastest climb in sales is taking place in the Midwest and on the East Coast, and the new Beloit plant now supplies a market that stretches from the front range of the Rockies to Texas and from Maine to Florida. It ships its potato chips to a Chicago, IL, distribution center, a third-party warehouse.
The facility’s design, however, provides ample floor space to double capacity without moving any walls. "We are currently at capacity here," Mr. Fallon said. "It’s been a good year. At Beloit, we set production records every week this month. The plant’s business can be doubled in two years, and we are on track to double it again in three years."
UNIQUE BUSINESS. This rather unusual plant was built by a rather unusual company. Founded by Cameron Healy in 1978 to make and market natural foods, its first products were roasted nuts, trail mixes and nut butters. Hand-cooked, batch-style potato chips joined the company’s roster in 1982. Six years later, Kettle Foods Ltd. started up in Norwich, England, producing hand-cooked chips, or "crisps" as they are known in Europe.
Over the years, Kettle Foods added to its snack food offerings, with organic potato chips in 1989, tortilla chips in 1992, baked chips in 1995 and Krinkle-cut chips in 1999.
Also in 1999, Kettle Foods moved into a new headquarters facility at Salem. Part of this project restored native vegetation and created natural ponds around the site. The company took responsibility for maintaining the stream and wetlands system near its facility.
Three years later, it began having its waste cooking oil processed into biodiesel, which fuels three company diesel VW Beetles, thus saving approximately eight tons of CO2 emissions annually. That same year, it installed the largest commercial solar array in the Pacific Northwest on its roof. With more than 600 panels, the array produces 120,000 kwh of electricity per year.
Because of its efforts to improve the environmental health of its 7-acre site in Oregon, Kettle Foods earned Salmon-Safe certification in 2006, only the second corporate campus to achieve this award. That year as well, the company started purchasing wind energy credits to offset 100% of its electricity use in the US.
It also is a leader in snack processing technology. Consider Kettle brand Bakes. These are the only baked potato chips to use fresh whole slices from real potatoes.
Kettle Foods distinguishes itself in its marketing efforts, too. The company prints its trademarked slogan — "A Natural Obsession" — on packaging and signs.
People’s Choice, now in its fourth year, invites consumers to taste the finalists for proposed new flavors in limited edition snack packs and vote for their favorites on its Web site, www.kettlefoods.com. In 2006, Buffalo Bleu and Tuscan Three Cheese tied as winners. Both flavors were introduced in stores. The 2007 contest brought Island Jerk flavored Krinkle Cut to the fore.
Consumers today have a choice among hand-cooked potato chips, but Kettle Foods keeps its edge in the market. "We use only the best ingredients — all natural, nothing artificial," Mr. Fallon pointed out. "We want (the ingredient statement on) the bag to read like a recipe: potatoes, salt and oil, and that’s all.
"Since the start of the company, we have always been zero trans," he continued. "We have been frying in sunflower and safflower oils for 25 years now. And we are known for our unique flavors. All this separates us from our competitors." So does the choice of environmental awareness that’s long been part of standard operating procedure at Kettle Foods.
In 2006, the London, England-based investment firm Lion Capital acquired Kettle Foods, enabling wider global distribution of Kettle brand potato chips and snacks.
BELOIT CHOICE. Site selection for the new plant, assisted by A. Epstein & Sons International, began in January 2006. The company wanted a location closer to Midwestern and Eastern markets. It concentrated the search in Illinois and Wisconsin, starting with about 100 sites and narrowing it to five.
"We wanted a site no further than eight hours from the supply of potatoes in the varieties we require," Mr. Fallon said. Also among the criteria evaluated were proximity to the Chicago warehouse, the quality of the workforce and economic incentives. Each was as important as the other.
Among the factors that tipped the balance to Wisconsin were the state’s environmental and energy initiatives. "Wisconsin has a strong economic package," Mr. Fallon noted, and it provided a $500,000 low-interest loan to facilitate construction startup. He added that the city of Beloit offered incentives in workforce, cultural and training resources. It also eased the permitting process to accelerate plant construction. And he thanked Beloit-based Kerry Food Ingredients, a supplier of flavors to Kettle Foods, for providing meeting space during the construction.
At the ribbon cutting for the new plant, Wisconsin Gov. Jim Doyle presented Mr. Fallon with a plaque recognizing the site’s Gold LEED certification status. The plant is the state’s fifth Gold LEED building.
"Kettle Foods represents everything we are trying to do here in Wisconsin," the governor said. "We are committed to being a good workplace and a good partner." He also described the state’s energy initiative. In April, Gov. Doyle signed an executive order creating a new Office of Energy Independence to carry out a goal he announced earlier: generation of 25% of the state’s electricity and 25% of its transportation fuels from renewable sources.
"The wind turbines on our roof will generate enough electrical energy to produce 56,000 bags of potato chips each year," Mr. Fallon said. "And they aren’t the only unique features here. You will also see daylight views in the factory, recycled materials, VOC-free paint on the inside walls and a view of the rolling hills of Wisconsin from the break room.
"This is a special and historic day for us," he continued. "Beloit is our first expansion and new facility since 1999. And the Gold LEED certification validates our business. (The environmental and energy savings aspects here) represent business as usual for Kettle Foods. Our actions can be an example for others."
WITH PURPOSE. Introducing the new plant, Kettle Foods described its products as "potato chips with purpose, seasoned with sustainability." The facility demonstrates the company’s commitment in a number of ways.
The electricity produced by the 18 AeroVironment wind turbines on the factory’s roof flows into the utility’s grid to offset some of the plant’s electricity use. The remainder of the energy is offset through purchase of wind energy credits from Renewable Choice Energy, thus qualifying all of the plant’s electrical energy as renewable. With the plant set high on a hill, air currents hit the walls of the building and rise to the roofline, creating "architectural wind."
Kettle Foods chose locally based Affiliated Construction Services and Affiliated Engineers, Inc. to manage the design-build construction of the plant. "They gave us a ‘home field’ advantage," Mr. Fallon observed.
During construction, 35% of building materials were harvested, manufactured or extracted within 500 miles of the plant. Fourteen percent of building materials had recycled content, and more than 75% of the construction waste materials were recycled, thus reducing landfill waste.
All paints, sealants and coatings meet Green Seal standards, ensuring healthy indoor air quality. YOLO Colorhouse paints were used throughout, and the countertops in the break room are made of compressed recycled paper from Paperstone Countertops. Office carpeting was selected from Green Label Plus Carpet.
Day-to-day operations are equally as green. The plant filters and reuses 1.65 million gal of water used to wash potatoes. It diverts 120,000 gal of this filtered "graywater" to the facility’s restrooms. Everything from paper, cans and glass to fluorescent bulbs, cardboard and scrap metal are recycled throughout the facility at designated recycling stations. "Impact" lighting turns on and off automatically when people enter and leave rooms.
And five of the site’s 12 acres are being restored to native prairie through Tallgrass Restoration, LLC. These native grasses do not need irrigation. Kettle Foods even distributed packets of native prairie plant seeds to those attending its grand opening celebration.
"Kettle Foods is setting a new standard for sustainable food manufacturing in the US," said Connie Lindholm, executive director of the Wisconsin Green Building Alliance.
"Investing in green building was a conscious decision on our part to demonstrate our values in a very tangible way," Mr. Fallon said.
‘USUAL’ PROCESS. The Beloit plant, administered by Bob Manzer, plant manager, and Jim McMullen, director of operations, makes only potato chips and consumes four truckloads of potatoes a day. Mr. Fallon described production equipment and methods as "the usual" for hand-cooked chips, but the company considers unique aspects of the process to be proprietary. And because the new plant received all-new equipment, the company took the initiative to improve a number of components.
"There were several things on which we challenged our suppliers, and they stepped up," said Clint Carey, Beloit’s project engineer.
"For example, the fryers are intended to run longer, so we looked at the impurities filtration system and upgraded it," he explained. Another change in fryer technology was to install FOODesign Machinery and Systems units with higher capacity than those at Salem. Kettle Foods already had experience with fryers of this size at its Norwich plant.
"We also upgraded the controls on the processing equipment," Mr. Carey continued. "We put in more variable-frequency drives, so the lines can be fine-tuned much more easily. These are things we typically do when we expand."
The first thing a visitor notices about the Beloit plant are the windows that provide outside views for nearly every employee. Next is the separation of operations into rooms with differing temperature, humidity and lighting conditions (for example, low in the potato receiving and storage area, higher in the cook room).
A mezzanine connects the top of the potato storage room with the room containing utilities and fryer exhaust ducts and, farther along the way, with the seasoning operations set above the packaging stations. Doors keep these areas separate, too.
With four lines now in operation, managers are quick to point out empty bays already fitted with utility stubs and knockouts for the fryer exhaust systems. These will accommodate the next four lines.
BY THE LOT. Potatoes come to the Beloit plant by the tractor-trailer load. A Spudnik potato unloader at the three receiving docks pulls the potatoes out of the trailer and sends them through an inspection station. Raw potatoes are scrutinized on receipt for variety, size and other attributes.
"When a new lot of potatoes arrives, we fry a sample to judge its performance," said Mr. Carey. "Many of our farmers ‘lot out’ their potatoes for us. In other words, they track the lot from the field to the truck. When we go to a different lot, then we’ll test again. We also test when using stored potatoes."
The plant receives truckload lots of potatoes daily, holding them briefly in four large bins. "No potatoes are put into long-term storage here," Mr. Carey continued. "We process potatoes immediately on delivery."
From the large bins, potatoes move out through the bottom via a water flume leading to a Lyco washer. Scrubbed and screened to eliminate stones and other field debris, the clean potatoes move up a conveyor to the mezzanine where a scale routes measured quantities of potatoes to each fryer line. A release gate drops the potatoes down to the cook room.
The receiving dock also houses storage tanks for sunflower and safflower oils. These highly unsaturated fats are held under a nitrogen blanket supplied by a BOC Gases system to safeguard quality and taste. Two other tanks in this area hold used cooking oils before they are sent to PrairieFire BioFuels Cooperative for conversion into biodiesel. The graywater wastewater treatment tank is also located in this area.
FRY, SEASON, PACKAGE. Reaching the cook room on the main floor, potatoes enter an auger that controls their movement into the slicer at the head of each fryer line. Slices are released as a batch into the fryer. Operators control cooking conditions by raking the potato slices as they fry in the hot oil.
The fryer releases its batch of finished potato chips all at once onto a takeaway conveyor. Chips from the four fryers converge, and all pass through a Key Technology Optyx optical sorter. This eliminates any undesirably dark chips, as well as fines and clumps. Chips continue into an FMC FoodTech vertical bucket elevator that carries them to a Heat and Control FastBack accumulating conveyor and chip feeding system located on the mezzanine.
Operation of the accumulator is controlled by computer to distribute chips to three packaging lines. Chips pass through Heat and Control large-diameter tumbling cylinders where they are dusted with salt, pepper and other seasonings. The company installed a commercial-scale dishwasher on the mezzanine to clean the seasoning tumblers. This saves water and avoids the mess of hosing off the tumblers on the deck. A quality assurance station to one side allows operators to test for proper seasoning coverage.
The finished, flavored potato chips fall from the seasoning tumblers into Yamato 16-head net-weighing scales above Hayssen vertical form/fill/seal baggers. Two of the three packaging lines are twin configuration systems; the other is a single.
Packaging room operators load the bags filled with chips into waiting delivery boxes, assembled by Combi Packaging System case erectors located on the mezzanine and dropped down to the packaging lines. Operators seal the boxes and place them onto shipping pallets to build loads. All chips are shipped immediately to the warehouse in Chicago for distribution. Four shipping docks accommodate the tractor-trailer rigs. The dock area also provides storage for film and cardboard supplies used by packaging operations next door.
FROM SCRATCH. Kettle Foods drew its Beloit staff from the local area. Few had any experience in food processing, so careful recruitment and training were important. "We had great support from the Rock County Job Center," Mr. Fallon said. The job fairs run by the county attracted more than 3,000 applications for the snack plant’s 100 positions. Human resources are the responsibility of Jerry Sonnenberg.
On-site training was done with the equipment, with vendors and with staff from the Salem plant. For off-site training, the company turned to Blackhawk Technical College in Beloit. "Training and improvement are ongoing processes here," Mr. Fallon observed.
Such training emphasizes quality and conservation. "We want to produce the best chips with the least amount of labor and materials and do so in an environmentally sound fashion," Mr. Fallon said.
Many of the green aspects to the plant involve employee relations, and that includes the break room with its spectacular hilltop view of the lush valleys around the plant. "You’ll notice that we gave the plant’s best ‘real estate’ to the employees in their break room," Mr. Fallon observed. "This was designed with the employees in mind."
The timeline for this highly expandable plant was quick. In September 2006, the North American group received its "go ahead." The final design was completed two months later. "We went from design to finish in less than a year," Mr. Fallon said.
Mr. Carey, who served as project engineer, lived on-site in a trailer for nearly a year to manage the project. He became the facility’s chief engineer during installation and commissioning.
The plant is constructed so it can double in production capacity within the current walls. The electrical system, fuel and water connections are all stubbed off to allow quick hookup of additional equipment in the future. Also, the building’s footprint can be doubled again by a simple expansion.
There’s no doubt that what makes this potato chip plant different from all others is its Gold LEED certification. This is one measure of how Kettle Foods differentiates itself from its competitors. "Look at the way the company does business," Mr. Fallon clarified. "It’s quality all the way. We don’t make an easy snack.
"The company is committed to doing things the right way from the start," he continued. "Sustainability. Corporate giving. It all starts with the brand. And we believe we make the best-tasting potato chips in the world."