Some of the fastest growing product categories in the food business are represented in the portfolio of WhiteWave Foods. That’s great news from a sales perspective, but it poses special challenges from a capacity point of view.
All of the 11 facilities in the WhiteWave production network came by way of acquisition: four plants in Europe, Earthbound Farm’s fresh-cut produce facility in San Juan Bautista, Calif., and most recently the So Delicious Dairy Free plant in Eugene, Ore. The others were inherited from Dean Foods, which bundled the plants with other assets when it spun off WhiteWave in 2012. (A 12th plant comes on line this month in DuBois, Pa., to support the firm’s expanded foray into cultured dairy.)
While Dean invested in and maintained its dairies in top condition — two of the sites received the EPA’s Energy Star designation for energy efficiency — only one had been in service for less than a decade. The Dallas plant was barely out of start-up mode when WhiteWave became a stand-alone company. Since then, the company has reoriented it into one of three cornerstone beverage sites and made it a showcase for the new corporate culture.
Organic milk, coffee creamers and plant-based beverages are WhiteWave’s sales all-stars. Those categories are riding two-year compounded growth rates of 16 percent for dairy and dairy alternatives, 8 percent in coffee creamers and 6 percent for organic products. Most food processors would happily swap their own categories’ growth rates for those kinds of numbers. They’d also have little sympathy for the difficulty of keeping the supply chain full for in-demand products, but expanding throughput capacity to meet demand is a major challenge for WhiteWave.
About 70 percent of products sold are made in company-owned facilities, with copackers filling the balance of demand, according to Jim Peacock, vice president of manufacturing. In-house production means faster speed to market, lower cost of production and greater quality control, and the firm has stepped up capital spending to optimize the supply chain and bring capacity in line with three-year forecasts.
Last year’s $128.9 million in capital expenditures equaled 6 percent of net sales and represented a 39 percent increase over the prior year. Some of that capital paid for six new filling lines, half of which were installed in Dallas, and more are on the way. A Mt. Crawford, Va., dairy is WhiteWave’s biggest producer, but additional lines in Dallas will add 50 percent more capacity in 2015 and push the plant to the No. 2 production site in the network, surpassing the City of Industry, Calif., facility. Weekly production at the 357,000-sq.-ft. Dallas plant already is approaching 1 million gallons of finished goods per week.
That new-plant smell
“Explosive growth” in Silk almond-based beverages and International Delight iced coffee coincided with development of the Dallas site, which was chosen partly because a mothballed 190,000-sq.-ft. frozen dessert facility provided an opportunity to take “a brownfield route” to production, explains Peacock.
A fast track schedule compressed the rebuild to six months, but escalating consumer demand made the original plan obsolete before the project was completed. Originally budgeted at $90 million for equipment and construction, the site already is an asset worth more than $300 million.
The 18-acre property was acquired out of bankruptcy by Dean in 2006 (frozen-dessert maker Americana Foods was the former occupant). The East and West Coast plants were slaking much of America’s thirst for Silk, Horizon and other WhiteWave brands, but logistics dictated a third plant to serve an area extending from Florida to Arizona and the Gulf to Chicago. Economic development incentives helped seal the decision to rebuild and expand the existing structure.
To the 142 production and 110 support staff in Dallas, the facility looks and feels more like a greenfield than a brownfield project. Except for some walls in the office area, the original structure essentially was demolished and rebuilt. The fit and finish of the production area and 11,000-pallet finished goods warehouse reflect the heightened safety standards for contemporary food production.
The facility also boasts a 2,400-pallet dry storage area, four batching rooms, five sterile storage tanks and a soy extraction system. With 13 shipping bays, “trucking companies like coming here,” says plant manager Matt Kuusinen. “They show up, we load them and they go.”
State-of-the-art filling technology from around the world handles the approximately 85 SKUs packaged in Dallas. The U.S. is represented by two Evergreen systems for gable-top containers. Aseptic-capable fillers from Sweden’s Tetra Pak and France’s Serac also are in service, though most products are refrigerated ESL. Shelf stable portion-control creamers are filled on an FDA-validated aseptic filler from Germany’s Bosch Packaging. The largest form/fill/seal machine for single-serve creamers in the Bosch lineup, the machine’s throughput is half again that of other Bosch fillers in the WhiteWave network.