A partnership between US entrepreneurs and German investors is helping retailers meet demand for Greek yogurt with store-brand options.
Fads and short-term trends regularly roil the food industry, but when purchase shifts are backed by brick and mortar, it’s a good bet yesterday’s fad is today’s fundamental change in consumption patterns.
Thick yogurt—specifically, Greek style—meets the fundamental-shift standard. A niche product in a lukewarm category five years ago, viscous Greek yogurt commands a still-expanding share of the dairy shelf. It is driving the kind of growth in US per capita consumption that dairy manufacturers have longed for since the 1980s. New plants in Batavia, NY (a PepsiCo-Theo Muller Group venture) and Twin Falls, ID (Agro Farma’s Chobani facility) help validate the expected staying power of Greek yogurt. The outlook was not as certain four years ago, though, when little capital was being committed to the product.
Plans for Commonwealth Dairy were being sketched out at about the same time, however, when two entrepreneurs in the retailing arena saw an opportunity to meet the growing demand for private-label yogurt. Greek yogurt was beginning to emerge as a dairy-case star, and Ben Johnson and Thomas Moffitt were finding it difficult to source store-brand yogurt from suppliers struggling to meet demand. Their technology advisor, Dieter Dobousek, introduced them to executives at Oberschönegg, Germany-based Ehrmann AG, a dairy processor with five production facilities in Germany and Russia. A strategic partnership was formed, and in mid-2010, construction was underway for Commonwealth Dairy in southeastern Vermont, with Ehrmann contributing capital and technical support.
Clean labels and natural ingredients are in high demand from retailers, and Johnson and Moffitt designed their Brattleboro, VT dairy to meet that demand. Standard yogurt was expected to account for 30 percent of production; instead, private-label Greek yogurt represents an even more dominant share of the production schedule. A workforce of 50 was envisioned after five years; instead, head count exceeded 100 within 18 months of the April 2011 startup, and work is underway on a major expansion.
Giddiness is the prevailing mood for yogurt makers eyeing a health-conscious public poised to elevate US per capita consumption from about 11.5 lbs. a year to something closer to Canada’s 22 lbs. or Western Europe’s 66 lbs. The prognosis is even more bullish at Commonwealth: Private-label yogurt only accounts for about 15 percent of supermarket sales, compared to half of the yogurt volume in Germany. Commonwealth’s early success also is a rebuttal of conventional wisdom that the barriers to entering US food manufacturing are too high for entrepreneurial startups to breach.
Keep it clean
Dairies set the sanitary standard in food production, but producing preservative-free, all-natural yogurt requires an extra dollop of hygiene. Automation is part of the recipe, along with concepts borrowed from aseptic and clean-room processing. At the Commonwealth dairy, HEPA-filtered positive air bathes the filling room and adjacent fermentation area, the most sensitive environment. A clean-room zone in the filling lines minimizes the potential for yeast, mold or bacteria to contaminate cups after they undergo treatment by vaporized hydrogen peroxide. Street shoes are banned, with staffers switching to company-supplied footwear before entering production areas. Those kinds of safeguards help Commonwealth achieve a 60-day shelf life without stabilizers or preservatives.
Superior process control is another essential element. Commonwealth achieves it with redundant PLCs and servers, linked by fiber optic cable to a hot backup for switchover in the event of a failure. The controls architecture, based on Siemens S7-400 PLCs and WinnCC servers, mirrors the system Shambaugh & Son, the design-build firm for the Commonwealth project, installed six years ago at T. Marzetti Co. in Horse Cave, KY (see “Plant of the Year,” Food Engineering, April 2007). Bus connections help minimize wiring, with AS-i Bus networking plant devices, including 86 mix-proof valves from Sudmo, and Profibus providing the controls protocol.
The plant does not have a central control room. Instead, HMIs provide process visibility in all areas, beginning in raw-milk receiving. The screens provide a view to the entire process, though operators can only influence processes in the room in which the HMI is positioned. Even then, the options are limited: Green squares denote the current status. Two blue squares highlight the next option: either proceed to the next step or shut down. Clicking on any other square generates an “insufficient permission” message on the screen.
The facility also reflects what Paul Meyers Jr., Shambaugh’s COO, terms “European-style manufacturing” in terms of energy use and sustainable practices. Vermont is the Green Mountain state, and environmental practices are reflected in strict construction codes and operating standards. Ownership chose to go above and beyond those standards by involving Efficiency Vermont in upfront technology decisions (see related story on page 46). The net effect is a collection of technologies and approaches that might be viewed as best practices in food production.
Every electric motor rated over 1hp is equipped with a VFD. Three hot-water boilers were installed in lieu of a steam system, significantly reducing energy use. “It was less expensive and more efficient to use hot water to directly heat the HTST [pasteurizer], rather than using steam,” explains Meyers. “It’s an approach that works well when you’re close to the load.” Solids in the first CIP rinse are recovered and sold as animal feed, reducing BOD levels by 90 percent and keeping the plant in compliance with local wastewater restrictions. “It’s an initial cost that a lot of plants don’t want,” he acknowledges, “but it’s really good for the environment and will save them money over time.”
Engineers took advantage of a 2009 change in the Pasteurized Milk Ordinance that allows dairies to incorporate a UV pasteurization unit for push water. Essentially a liquid pigging system, push water evacuates a filling line before a product changeover occurs. Because the water contacts the product, it must be pasteurized. The conventional method is thermal pasteurization, but the capital costs of a heat exchanger, pumps, valves, controls and tank dwarf the capitalization of a UV system. Other than sensor calibration and bulb changing, UV’s maintenance costs are negligible, notes Maintenance Manager Daniel Frommel.
Improvements continued after production began. Less than a year into operations, a smaller VFD-equipped air compressor was installed, with the original compressor relegated to backup duty. When air demand escalates, the backup unit comes online; otherwise, it is idle. The redundant capacity allowed engineers to lower the pressure set point from 130psi to 105psi. The capital project became a go when energy-use auditors calculated the investment would generate a return within eight months.
Refrigeration is required in finished goods areas. The industry trend is to limit the Freon loop in an isolated room, then loop glycol to areas that need to be held below 37°F. “Most plants without freezing requirements are going that way,” says Meyers. “It’s a food safety consideration.”
The Bus systems reduced wiring requirements not only during the construction phase but also for plant and system expansions. “You see a lot more spaghetti wiring in most plants,” observes Keith Farnsworth, senior process engineer at Zajac LLC, a Portland, ME engineering firm that is installing two more 8,000-gallon fermentation tanks, adding to the original six. The As-i Bus protocol in particular is easing the new tanks’ integration with a cluster of 36 Sudmo mix-proof valves in the fermentation room. Colored lights on the control tops provide an at-a-glance status report: Idle valves glow amber, open valves shine green, and a red light triggers a maintenance call.
Production Manager Berthold Gruber jokingly refers to the signal lights as the plant’s “disco cluster,” though he appreciates the visual as an involvement tool. In fact, operator engagement is essential to minimize the mistakes that cause product-quality issues. “You can track everything on the [HMI] screens, which is helpful for identifying quality issues,” he allows, but automation systems only emulate human senses and responses. “When people are on the floor, they can hear the noises and respond to what is going on,” Gruber underscores.
Gruber and Frommel are Austrian and German engineers, respectively, embedded in Brattleboro since 2011 to oversee operations until responsibilities can be handed off to domestic professionals. Both have worked at Ehrmann facilities in Europe. The Brattleboro and European plants are comparable in terms of automation, they say, but two distinctions set the US dairy apart. The first is production velocity: Raw milk may be held for up to a day and a half in a German dairy; in Brattleboro, it enters the production stream within hours.
The other difference is the walkable ceiling, which isolates pipes, pumps, motor control centers and other equipment that don’t need to be in close proximity to process equipment. “That’s pretty cool and a really big advantage,” Gruber says appreciatively. It enhances hygienic conditions and is well on the way to becoming standard for US greenfield projects. Of particular appeal to Frommel is the elimination of the potential for broken glass from light fixtures contaminating process areas. The fixtures are sealed off from the process areas below, accessible only from the interstitial area above.
Upgraded filler specs
Particular attention was given to hygienic design for the fillers. Rather than import European machinery, management opted to use a US supplier with 3-A certified components and a familiarity with PMO requirements. The objective was to emulate aseptic design without the validation.
Domestic fillers didn’t meet the dairy’s requirements, but Oldsmar, FL-based Osgood Industries had a relationship with Germany’s Bosch Aseptic. Reasoning that Bosch could assist Osgood in improving its package-sterilization capabilities to meet Commonwealth’s requirements, plant owners commissioned Osgood to fabricate the first three models of what would become Osgood’s UltraClean filler line. The supplier had incorporated a UV disinfection component for foil lids on a previous order, but the Commonwealth job was its first experience engineering a vaporized hydrogen peroxide system for cup sterilization. Change orders and extended development time stretched delivery several months beyond the target date, but the fillers were commissioned in time for production startup.
Servos replace air cylinders in the fillers, and a “sterile air tunnel” encloses cups with diameters of 95mm, 80mm and 115mm as they are transported through the filling zone. Run speeds approach 200 cups per minute. An Osgood representative says the firm guarantees a 4 Log reduction on the challenge organism. A fourth filler will be delivered as part of the plant’s expansion project. Fabrication is expected to take six months. The Commonwealth units incorporate cup feeders, seal checks, coding and case packing in the sanitary zone.
Downstream from the filling room, three X-ray machines from Mettler-Toledo provide quality assurance against fruit particulate and foreign materials in finished goods. Otherwise, packaging remains primarily a manual operation, though the firm intends to automate the area.
Hot water from waste heat also is on the dairy’s to-do list, though scheduling that efficiency is beyond Commonwealth’s control. The facility is on the 120-acre Delta Campus, a business park owned by Bob Johnson, whose vision includes a mix of residential units, a school for autistic children and low-impact manufacturing. Johnson also owns the adjacent Omega Optical plant, which produces specialty filters used in microscopes and telescopes, including the Hubble space telescope. The site’s previous owner had more low-tech ambitions: The second pass by a backhoe unearthed the first of thousands of buried tires and automotive parts. By the time the parcel was cleared, workers had filled 28 dumpsters with recyclable materials and 61 dumpsters with trash.
Omega’s Johnson intends to build a biogas system with CHP generation. Waste from the dairy could supplement feedstock; the dairy’s piping system was engineered to accept the waste heat from Johnson’s generator. The plans are on hold due to a business slowdown.
In the meantime, Commonwealth is integrating with the rhythms of Vermont life. With a population of 12,049, Brattleboro ranks among the state’s 10 largest urban areas. Industrial job losses qualified the community for the US Treasury Department’s New Market Tax Credits program, which helped finance the dairy. Commonwealth represents the largest investment initiative in decades. “They were welcoming to us as a town,” says Commonwealth’s Johnson, and the dairy has reciprocated with its own good-neighbor approach. Brattleboro hosts the slyly named Strolling of the Heifers each June, just before Pamplona, Spain’s faster-paced bovine event. Last year, the dairy donated 328 gallons of yogurt to the event, helping Brattleboro lay a brief claim to the world’s largest smoothie certification in the Guinness record book.
The dairy embellished its professional reputation at October’s World Dairy Expo in Madison, WI, capturing the first and second place awards for its Green Mountain Creamery brand in the Greek yogurt competition. As the copacker for Ehrmann USA, it can claim partial credit for a bronze, as well: Ehrmann’s blackberry pomegranate yogurt captured third in the open flavor class.
Work began in October on an addition that will add 23,000 sq. ft. to the building’s original 38,000 and accommodate a fourth filling line. An April completion is expected. Site preparation began in October, exposing more tires and other treasures.
Speaking of Shambaugh, Johnson says, “These guys built a fantastic plant with everything we asked for. Our only complaint is that we didn’t build a big enough plant.”
New Englanders are among the nation’s leaders in per capita yogurt consumption, and a local C&S Wholesale Grocers distribution center helps Commonwealth serve that market. Even more yogurt eaters reside on the West Coast, where a second dairy may be built.
However growth plays out, the dairy’s owners are satisfied they have the capacity and flexibility needed to meet growing demand. Regardless of what style of yogurt the market demands, they believe they have a dairy that can deliver it, quickly and efficiently.
For more information:
Chuck Clerici, Efficiency Vermont, 802-860-4095, email@example.com
Paul Meyers Jr., Shambaugh & Son, 260-487-7805, firstname.lastname@example.org
Keith Farnsworth, Zajac LLC, 207-286-9100
Bigger bangs with VFDs, LEDs, et al.
Relegating a year-old compressor to backup duties would make most manufacturers cringe. But based on detailed analysis by consulting engineers from Efficiency Vermont, Commonwealth Dairy did just that, confident the eight-month ROI calculation would pan out.
Commonwealth is one of 69 energy-intensive operations in the state participating in Efficiency Vermont’s (EV) Energy Leadership Challenge, a program targeting 7.5 percent reductions in energy per unit of production. Even before the challenge kicked off, Commonwealth officials invited EV’s energy consultants to review the plant’s infrastructure and suggest improvements. Subsidies in the 10 to 20 percent range are provided when manufacturers upgrade their systems, but the greater value is the payback analysis EV auditors provide for technologies the manufacturer may not have considered, according to Chuck Clerici, EV’s business development specialist.
“The single largest upgrade that made a major dent in the dairy’s achievement of the 7.5 percent target was the installation of a water-cooled chiller” for the refrigeration system, rather than the air-cooled chiller originally planned, says Clerici. Related to that investment was the replacement of the original compressor with a VFD-equipped unit.
At EV’s recommendation, Commonwealth specified VFDs for every motor larger than 1hp. Another upgrade being considered is the replacement of T-5 fluorescent lighting with LED technology, a capital investment that is beginning to yield an attractive ROI while also eliminating disposal and possible contamination of mercury, a risk abhorrent in food production.
“More than anything, engineers want things to work, and if they work efficiently, that’s just gravy,” Clerici reflects. Demonstrating that technologies such as VFDs and LEDs won’t compromise performance or reliability is just as important as outlining savings from reduced maintenance and energy consumption in convincing manufacturers to upgrade infrastructure. “Energy efficiency is not the only consideration,” he adds.
EV is an example of a usage-reduction program that is decoupled from utility companies. Electric customers throughout the state are assessed a surcharge on monthly bills to fund EV’s $35 million annual budget.