Faribault Foods demonstrates how progressive strategies focused on equipment investment and consumer trends can help cut costs and capitalize on opportunities.
The units above have been added to help Faribault Foods better manager their water and natural gas usage rates.
When you look at either the finished product or the actual facility’s exterior, it’s not unlike the canning factory my grandfather worked at over 60 years ago. However, much like the products they process, the most appealing elements of Faribault Foods are found beneath the outer skin and within the distinctive flavors of their processes and approaches.
With four locations throughout Minnesota, Faribault Foods has been family-owned for over 115 years. It employs several hundred, most of whom are directly involved in the processing, packaging and distribution of the numerous vegetables, soups, beverages and pastas the company produces under one of its own eight brand names or among the dozens it private-labels or co-packs for other food companies.
Their own brands include Butter Kernel®, Chilliman®, Kuner’s®, Kuner’s Southwestern®, Mrs. Grimes®, Pride® and S&W Beans®. Most of these would be considered regional brands sold through varying retail outlets. These products are the legacy of Faribault’s business.
Co-packaging is the arrangement where Faribault leverages their areas of specialization and efficiencies in manufacturing to producce proprietary products for other food companies. Faribault works with several major entities in the soup and vegetable categories. Leveraging these areas of specialization allows Faribault to provide high-quality, cost-effective products for a number of elite business partners.
Private labeling presents the opportunity for retail stores to have their own label on a variety of high-quality products.. A greater focus on developing this segment, along with the diverse offerings within their own brands, has created a label inventory.
Despite a challenging economy, Faribault Foods has continued to grow — an accomplishment they attribute to a proactive corporate culture that readily embraces change. As a mid-sized company, Faribault also feels well-positioned to react quickly and diversify into other product categories as consumer demands change. These dynamics are well-represented at the company’s flagship facility in the town from which the company draws its name.
Multi-million dollar investments in automation and food safety equipment have been key ingredients to the company's growth.
Looking specifically at the Faribault, MN facility, it was originally a seasonal canning and packing plant for corn and beans. About 10 years ago, it transitioned to year-round operations with a focus on beans. Over one million cans of such product are turned out of this location every day.
This type of production quantity has given David Tieman, the plant operations director, a number of challenges in keeping the facility running as efficiently as possible while maintaining stringent quality standards and accommodating new offerings.
“Driving production drives the bottom line,” offers Tieman in describing operational approaches that stress ongoing overall equipment effectiveness measurements as part of the facility’s continuous improvement process. “It’s a team effort throughout,” he continues, “which helps not only in keeping the plant running efficiently, but safely as well.”
While many in the processing marketplace like to talk about investing in leaner, more efficient production strategies, Tieman points out that Faribault has also walked the walk. The last three years have encompassed a multi-million dollar investment strategy focused on adding more efficient automation, capital equipment capable of handling more throughput while requiring less down time, and — pherhaps most importantly — producing and analyzing production data to provide continual improvements to the production process, which includes a great deal of employee training.
“Due to the implementation of more computer-controlled equipment, we need employees with higher skill levels than in the past,” offers Tieman. This meshes with added investment in machine controls that allow most equipment to run on its own, with the operator responsible only for monitoring, troubleshooting and ensuring quality standards are maintained.
“The demand in organic foods has been steady for the last 10 years, and definitely a growth area for us over the last five,” states Tieman. “We were one of the first to champion organics, which, due to the longer lead times, required some significant modifications to our production flow. We also found that organic products place a greater demand on supplier relationships, as we have to know these specialty companies better and put longer contracts in place because everything simply takes a bit longer,” he adds.
One of the most significant production changes stems from the cleaning that must take place when changing-over lines. “A complete clean-up is mandatory when changing between regular runs and organic products, so it takes about 50 percent longer than normal changeovers,” offers Tieman. This puts a premium on equipment that is easier to clean when going the organic route.
The added supply chain and change-over timing constraints created the need for investments that were more procedural than equipment-based in handling these new organic offerings. This entailed working through a significant and admittedly tedious certification process with Quality Assurance International (QAI). However difficult, this enabled Faribault to document the field-to-fork process that is the backbone of organic food offerings.
This dynamic also feeds into Faribault’s focus on food safety and traceability. Having learned some valuable lessons after enduring a recall, Tieman emphasizes the need for all parts of the company to be in communication about changes or concerns. Investments in new traceability software and barcode-driven tracking of everything that goes into the finished product have been key not only for their own internal purposes, but also in satisfying the growing number of customer audits they must pass. “Suppliers will challenge us, which is why documentation has become so important. And not just with the organic offerings, but in all we do,” states Tieman.
In addition to capitalizing on the organic trend, Faribault, like all manufacturers, has seen how identifying and working to improve energy usage can positively impact operations. Their efficiency-driven mantra is perhaps best represented by examining the company’s partnership with Xcel Energy and Thermo-Environment Systems in reducing natural gas and water use.
“We’re in the midst of a three-year initiative that focuses on water and sewer cost decreases. Although water is obviously vital to the canning process, we know we have to be responsible with this natural resource,” states Tieman.
Faribault worked with TES to create a system which captures and transfers energy from heated water within the plant to water entering the plant. Given the substantial amount of energy used in their water-intensive cooking systems, this also had a dramatic effect on the plant’s natural gas consumption.
Additionally, through recycling efforts, Faribault developed methods to reduce the amount of water being used in the plant. Through a unique, state-of-the-art process, the plant was able to reuse much of the water that had previously simply gone down the drain. The end result is saving millions of gallons of water every year.
TES also aided in capturing much of the waste heat generated during the canning process and reusing it for other purposes, such as pre-heating boiler make-up water and tempering water used in the cooking process through heat exchangers. In capturing and using this usually discarded heat, the plant has reduced natural gas consumption by 38 percent since the system’s implementation in 2007. This has led to an annual reduction of CO2 emissions by more than 3,000 metric tons — the equivalent of removing 579 passenger vehicles from the road, according to EPA greenhouse gas calculations. Xcel Energy recognized the facility with one of only seven Energy Efficiency Awards given to Minnesota manufacturers.
“We were able to introduce all this technology, reduce emissions, improve water usage, cut natural gas costs all while experiencing no safety or quality issues along the way,” states Tieman.
The inner workings of this Faribault plant seem to echo that of many manufacturing facilities around the U.S. — or at least the successful ones. While the basis of the business and the structure that houses it seem to have changed very little, the inner workings offer a great deal of cutting edge technology and revolutionary production schemes that have resulted from constant re-investment and progressive business approaches. It’s definitely not my grandfather’s canning factory, and I think he’d agree that there is no way it could be and survive in today's market.