You’d be forgiven if you thought the art hanging inside Denali Ingredients was the work of Jackson Pollock — the famed abstract expressionist who’s known for “drip” paintings.
But upon closer investigation, that light brown canvas looks more like peanut butter. The red “paint” dripped and strewn across the backdrop is definitely strawberry sauce. And the brown splatters? That’s chocolate.
It’s the perfect way to capture Denali’s approach to food. As an ingredients supplier for the ice cream industry, the success of the New Berlin, Wisconsin-based company hinges on creativity and artistry to keep it ahead of the curve.
Denali’s main market is ice cream, which, despite being one of the most popular desserts in America, has actually seen per capita consumption declines compared to 25 years ago. Part of the drop has come from the rise in good-for-you eating trends.
But if you can’t beat ‘em, then, well, feed ‘em. That philosophy is partly why Denali hasn’t seen its business melt with any dips in the industry. Instead, the company has met every trend with a tasty solution, and has done nothing but grow since it launched as a frozen treats ingredients business 10 years ago.
Behind that success is the constant push to innovate and create. Whether it’s clean eating or a specific flavor fad, Denali cranks out dozens of new ideas every year to meet the needs of its 300 or so customers (which include every major ice cream maker in the country).
While many companies see research and development as a burdensome cost, Denali views R&D as an investment.
During a recent sit-down with Denali’s president, Neal Glaeser, Food Manufacturing learned how innovation and other factors have helped the company grow beyond its own expectations.
Denali Ingredients, a sister company of Michigan-based Denali Flavors, started as a sales and marketing businesses for several brands in the industry, including the blockbuster Moose Tracks flavor. But after 10 years, and a series of mergers and acquisitions with Eskimo Pie, CoolBrands and others, Denali started manufacturing its own ingredients in 2006. The move paid off.
“When we purchased the facility here in 2006, we were manufacturing 21 million pounds,” Glaeser says, referring to the company’s headquarters and 90,000-square-foot manufacturing facility in New Berlin. “This year, we’ll manufacture about 50 million pounds.”
The number of employees has also grown — from 29 workers that first year to about 125 today.
Moose Tracks, which is now one of Denali’s sister companies, is also one of its biggest customers. Denali supplies all of the fudge, caramel and other ingredients for the famous flavor. All told, the partnership amounts to about 10 million pounds of fudge a year for Moose Tracks alone.
The rest of Denali’s portfolio runs the gamut of delicious additions to ice cream — from peanut butter to coconut, fruits, candy corn and butterscotch. The company also provides a range of stabilizers, doughs, sauces, powders, variegates, coatings, extruded products and flakes.
“It’s a soup-to-nuts operation,” Glaeser says of Denali’s ability to supply the whole package for either a traditional ice cream flavor or something more exotic.
One of the company’s biggest wins has been its line of cookie doughs.
“In 2009, we made about 380,000 pounds of cookie dough. This year, it’s eight million (pounds), and that continues to grow,” Glaeser says.
Denali has been experimenting with other dough varieties, including a peanut butter-flavored dough.
Glaeser also takes pride in Denali being one of the first companies to produce salted caramels, which have become one the hottest ingredients in the dessert world over the past few years.
How to Invent a New Ice Cream
Denali currently makes a whopping 2,200 different formulas in both of its manufacturing spaces (the company has a second facility about a mile from its main campus). To be on the forefront of emerging trends, the company has had to make a concerted effort to create a productive space for R&D. For Denali, that means having a state-of-the-art Innovation Center that’s equipped with a tasting room, pilot lab and experienced employees.
In the lab, the company spends a considerable amount of time dreaming up new kinds of ice cream.
In fact, every year, Denali’s staff is tasked with inventing new flavor concepts. According to Glaeser, the team often starts with about 50 to 75 ideas. After rounds of brainstorming, experimenting and tasting, the list is whittled down to 12 flavors. These new ideas are then sent to ice cream manufacturers, who may purchase either the whole concept or parts they want to work into other recipes.
During Food Manufacturing’s visit, Denali’s lab had a range of bold, new flavors that had recently been developed, including cookies and coffee gelato, honey graham crumbles in milk, a butterscotch variety and honey roasted peanut butter, which recently won Denali a “Most Innovative Prototype Flavor” award from the International Dairy Foods Association.
“We want to push the edge a little bit,” says Kim Premo, the company’s vice president of R&D. “It demonstrates that you’re thinking forward, and some manufacturers want to be a part of that.”
How does Denali keep the ideas coming? First, it invests in market research on industry trends. The company also keeps a close eye on flavor trends at restaurants and grocery stores. Customers can also be a good source of inspiration, and, of course, employees offer up their own ideas.
For Denali’s team, however, the most fun part of the innovation process is a yearly jaunt through the Windy City.
“We’ll spend about two days in Chicago doing a tour of boutique grocery stores and restaurants,” Glaeser explains. “We’ll go from restaurant to restaurant and talk to pastry and dessert chefs about what they’re seeing happening. So, it’s fun and creative.”
Denali’s lab capabilities are also a big draw for its customers. Instead of having to collaborate remotely, customers can now come to Denali’s headquarters and work alongside lab personnel to innovate on the spot, which makes it faster to take a concept from bench to market.
“We can short circuit the R&D process by many weeks,” Glaeser says. “We think this setup is unique. We don’t see a lot of other companies investing as heavily in R&D as us. I think a lot of companies look at it as a cost. For us, it’s generated revenue.”
Keeping Up With Clean Eating Trends
Denali is also on the forefront of clean label trends in the wider food industry, and is able to produce ingredients that are organic, non-GMO, free-from dairy, artificial flavors, HFCS, PHOs, modified starches and hormones.
The company has also been working hard on producing flavors in line with one of the most popular “healthy eating” ice cream trends: low-sugar, high-protein varieties.
Those varieties can pose new challenges, though. Protein, for example, can be chalky, making it more difficult to produce an ice cream eaters will not only feel good about, but enjoy eating.
Often, the biggest part of these trends is being on the same page with different customers who may have different definitions of what “clean eating” means.
Despite the challenges, Denali has made sure it’s not missing out on one of the fastest-growing segments of the industry.
Lessons From Growth
In 2016, Denali reopened its facility after a $5.5 million expansion project that gave its 40-year-old building a facelift and revamped production and lab space.
Despite also opening a second manufacturing space nearby, the company’s growth projections are so promising, they’re already shopping for another new facility to expand production even more.
Glaeser says it’s a good time to think about new investments. He advises, however, that companies make sure they have enough projected future growth to support an expansion. And companies have to also accept that there’s always an element of risk involved.
“I think everyone’s risk tolerance is different. But there’s also equal risk in doing nothing,” Glaeser says. “We really believe that if we’re not growing, we’re going to get run over. Years ago, you might have been able to say, ‘I like what we do and I don’t want to do anything different.’
“That doesn’t work anymore.”
Of course, making the leap can be nerve-wracking, which Glaeser admits when recalling the company’s initial investment in cookie doughs. “We didn’t make much dough that first year, which scared the heck out of me,” he says.
But ultimately, making bold leaps became part of the company’s strategy.
“That speaks to our willingness to take risks in areas that we think are underserved,” Glaeser says of cookie dough.
How to Find and Keep Good People
Attracting reliable workers is a widespread issue in manufacturing. While Denali has been looking at automating some of its packaging processes, Glaeser says that much of the actual food manufacturing is still done in an artisan way. The cookie dough, for example, is meant to have a certain texture, look and color. This requires actual people watching the line.
One of Denali’s biggest successes with finding the right employees has come from a program called The Joseph Project. Founded in Milwaukee by a local pastor, The Joseph Project is a career placement program that provides resources, education and support to people looking for work. Enrollees in the program attend five days of classes that promote life skills such as resume writing, and are then given assistance finding transportation to a job.
After finding out about The Joseph Project through a local business association, Denali began recruiting through the program with great success. Glaeser says the company current employs eight graduates of the program and says that, on average, the company has a better retention rate from The Joseph Project employees than the general public.
Glaeser says the company has also taken many deliberate steps to help shape the careers of its employees. After creating a strategic plan a few years ago and coming up with ideas for employee retention, the company created a mentorship program. Sixteen of the company’s employees are currently in the program — with three of them directly under Glaeser’s wing.
The program has a clear protocol and requires that the mentor and mentee meet every two weeks for about two hours. The pair create objectives, cover material and report their progress. But it’s about more than just checking boxes.
“There’s a really cool relationship that’s developed between the mentor and mentee,” Glaeser says. “And it shows that we are investing in them. It’s been one of the best things we’ve done.”
Glaeser says the company has also improved on how it connects with its younger workforce.
“We work hard with our supervisory team to give them the tools to communicate and on how we deliver our message,” he explains. “It can be challenging, but I think it’s actually good for us to rethink what we’re doing.”
What Lies Ahead
While Denali’s biggest market reach is in ice cream — and the company may expand into new segments of ice cream ingredients soon — it has begun to dip its toes in other food-related waters. Glaeser says keeping an eye on new frontiers is likely to become a growing focus for the company in the next few years.
“I think anyone who knows something about business would look at us and say we should be more diversified,” Glaeser admits.
Looking ahead, Glaeser says Denali could look to expand into other areas of the dessert aisle, or make inroads in other food service segments. In the meantime, though, the company will still be busy in its lab working to create the next great flavors in ice cream.