June 18, 2012
by Bryan Salvage
Hormel Foods Corp.’s flagship 1.1 million-sq.-ft. processing plant in Austin, Minn., turns 30 years old in September, while the company’s iconic SPAM brand celebrates its 75th anniversary this year. The technologically advanced Austin facility, which produces a wide range of mostly value-added pork products, including SPAM, replaced an existing beef plant that had become inefficient after decades of additions and remodeling.
The original Austin plant, which spanned 54 acres and was nine-floors high at the tallest spot of the complex, was considered the largest meat plant in the world during its heyday. The current facility remains one of the largest meat plants in the world – and a modern technological marvel.
Richard Knowlton was chairman of the board, president and CEO at Hormel Foods when the current Austin plant was designed, built and opened. In his book Points of Difference: Transforming Hormel, he explained that after years of researching how to make the aging Austin, Minn., beef facility more efficient, executives at Hormel Foods determined it would be best to replace it. Heading up research on this project, Knowlton championed having the new plant built in Austin.
“Hormel’s long-term future demanded a plant that could support the necessary advanced technologies,” Knowlton wrote.
Hormel Foods’ Austin facility meets this need – and much more. The structure is six plants under one roof – dry sausage, meat products, grocery products (canning), shipping warehouse, harvest and fabrication plus a large refinery operation – all connected by common passageways, explains recently retired, 38-year company veteran Bruce Schweitzer, vice president of operations, Refrigerated Foods. Schweitzer had oversight of 14 Hormel Foods refrigerated food plants, including Austin, and was also president of PFFJ LLC – Farm Operations. (See retirement side bar on Page 26).
“This plant was built for large volumes and tonnage with products that are big movers, such as SPAM, pepperoni, hams and other established products,” says Tim Fritz, Austin plant manager and 28-year company veteran who reported to Schweitzer.
Products made at the Austin plant represent approximately one-eighth of the annual product volume produced by Hormel Foods. “We run 1.3 billion lbs. of processed product through this facility every year,” Fritz says.
Each year the Austin facility produces more than 60 million lbs. of dry sausage, primarily pepperoni, which is one of the biggest-selling products produced at the Austin plant. Grocery Products (canning) makes 110 million lbs. of SPAM products, canned hams and ham patties per year – 75 million lbs. of which are SPAM products.
The first can of SPAM luncheon meat was produced in 1937 at the Austin plant. Today, Hormel Foods makes 11 varieties of SPAM, including SPAM hickory smoke flavored, SPAM less sodium, SPAM lite, SPAM hot and spicy and SPAM oven-roasted turkey, among others.
The Austin plant also makes 100 million lbs. of meat products annually, including Hormel Cure 81 hams, Hormel Black Label bacon and Fast ‘N Easy bacon; the Rendering and Refinery Department makes 250 million lbs. of various products per year.
“The Austin plant produces blended seasonings for other Hormel plants,” Schweitzer says. “Marinated meats are also unique to this plant. The Austin plant is the only company plant producing flavored loins and pork filets.”
Points of difference
“Unique” describes the operation. Most meat harvesting and processing plants 30 years ago were multi-story. Live animals were transported to the top where they would be harvested, fabricated and then the resulting portions and cuts would be gravity-fed through five or so floors down to the first floor, Schweitzer says.
This plant is a single-story operation. “That was unusual in 1982,” he adds. “Today, the plant runs three shifts per day, five days a week and employs about 1,750 people.”
Hormel Foods has a partnership with Quality Pork Processors Inc., which is located at one side of the Austin facility and totals around 300,000 sq. ft. All fresh pork QPP processes goes to Hormel Foods. QPP employs 1,300 people who harvest, process and fabricate the hogs. Hormel Foods then utilizes the cuts of meat and trimmings throughout its Austin facility.
“We’ll run 19,000 hogs a day on two shifts,” Schweitzer says.
Approximately 90 percent of all raw protein materials for the Austin facility come from QPP. “We make some turkey pepperoni and some beef goes into our dry sausage, but the vast majority of protein we use is pork that comes from QPP,” Fritz says.
Another point-of-difference is the plant’s Automatic Storage & Retrieval System (ASRS), which has been operating since the plant opened. It is a 14-level-high, computerized warehouse that operates four automated cranes that rapidly travel up and down the aisles to store and retrieve products by bar code. “Such a system was unheard of in 1982,” Schweitzer says.
Hormel Foods’ high-pressure processing (HPP) system used on some of its products was initiated in the Austin plant through R&D. Hormel Foods’ HPP technology system treats Hormel Natural Choice products, resulting in meat that is 100-percent natural with no preservatives, added nitrites and nitrates, artificial colors or flavors.
Among the most important accomplishments Hormel Foods achieves utilizing technology is through ergonomic machinery and assists – eliminating physical stresses created by some jobs on the line, Fritz says. All company plants have ergonomic and safety teams who have attacked difficult ergonomic problems involved with manual handling and packaging.
For example, during the last six years the plant has operated a high-speed robot to palletize heavy loin boxes, which can weigh between 76 lbs. to 81 lbs. per box. “We have plans to use a lot more of this technology,” Fritz says.
In dry sausage manufacturing, an automated hydraulic stick assists line workers in lifting the pepperoni sticks to the trolley. And trim blend room employees who rack boneless butts for pulled pork use pneumatic lifts to raise and lower the racks for easier loading. “We use a lot of ergonomic-based technology,” Fritz says.
More than 50 percent of the plant’s employees have more than 10 years of service in the plant. “We’re quite proud of that,” Fritz says. “Our employees are at the heart and source of our success as a company.”
Maintaining and enhancing worker safety is very important. “We want every employee to go home at the end of the day as healthy as he or she was when arriving to work earlier each day,” Schweitzer says.
Turnover is around 7 to 8 percent in the Austin facility, Schweitzer says. “And that includes all separations,” he adds. “We all have the same goals from corporate all the way through the organization. When someone on the line feels a part of that success, then they’ve bought into it. It’s, ‘I can make a difference, I am adding value, I am important’ and ‘I am critical to the success of the company.’”
Many technological advances in the Austin plant are Hormel Foods-created and proprietary. “We have something few people know about – an in-house engineering development facility based in Hayward, Minn.,” Schweitzer says. “This team develops equipment for our needs. Many times they patent it just for Hormel.”
In the Hormel Bacon Bits production area, Hormel Foods engineers designed and pioneered a proprietary vision system that locates foreign material and ejects it from the line. “Anything that isn’t brown is automatically removed,” Fritz says.
The in-house engineering development team and Austin plant employees also collaborate to redesign work areas. For example, the plant’s dry sausage area includes four drying rooms. One room was recently redesigned to drive out inconsistencies in drying. “We’re drying and heating that air throughout the room to the exact requirements we want now,” Fritz says.
“We’ve seen an improvement in drying variation of 30 percent in this redesigned drying room...significantly better than we had before,” says Brandon Koehler, lead supervisor of dry sausage. “We no longer have to continually rotate products to make sure our variation is under control and we’re now about 15 percent faster in pulling out moisture compared to our other three drying rooms.”
Fritz says plans are in the works to do the same conversion to other drying rooms in the next three months.
Effective preventive maintenance is essential to keeping this facility running safely, consistently and smoothly. “We track the performance of every piece of equipment within our operation to understand what needs to be done, what the cost-out is and when we need to maintain and replace those items before they break down during the process,” Schweitzer says. “You have to be committed to preventive maintenance.”
New products are the life’s blood of the Austin plant.
“We just went through a rejuvenation process with regards to Cure 81 hams,” Fritz says. “We’ve seen sales flatten out in recent years, so we redesigned that ham and recently introduced new variations.”
Hormel Foods original Cure 81 ham was available in one flavor, slightly dryer and not quite as sweet as the new offerings, had a slight smoky flavor and the outside texture was smooth. Four new Cure 81 hams include the Classic, which is sweeter than the previous Cure 81; Brown Sugar; Honey; and Black Pepper in shrink-wrap packaging. These new products are selling better than anticipated, Fritz says.
“We found in our focused market studies consumers were looking for a little sweeter taste and wanted more variability,” he adds. “They don’t want the same old ham for every occasion.”
Hormel Foods recently launched several new ready-to-eat snack products – Hormel Pepperoni Minis and Hormel Pepperoni Stix in stand-up pouches. These products don’t cannibalize Hormel Foods’ other pepperoni products, Fritz says, and their sales have been growing nicely.
Hormel Foods has taken a commodity pepperoni that was used to put on pizzas and made them into snack items, Schweitzer adds. “A lot of success for Hormel over the years has come from taking traditional, commodity type items and adding value through packaging and different applications for the consumer that no one had thought about before,” he adds.
Other new products produced at the plant include Hormel Hardwood Smoked Pulled Pork, Austin Blues Pulled Pork, Hormel Fully Cooked Bacon and Hormel Always Tender Oven Ready Pork & Chicken entrées.
One of Hormel Foods CEO Jeffrey Ettinger’s goals is to obtain $2 billion in sales from new products that didn’t exist prior to 2000.
“He wants that accomplished by the end of FY2012 – and we’re right on track,” Fritz says. “If we’re going to continue to be relevant with the consumer, we can’t keep selling the same products. So, he challenged the company and it started with the goal of $1 billion in sales from new products that didn’t exist prior to 2000 by 2007. We reached that goal. At that point, Jeff reissued the challenge.”
One way to drive innovation is through developing successful new products, Fritz adds.
During the plant tour, one common theme emerged over and over again: the employees at Hormel Foods are the company’s most important resource. “If you want to talk about what has been the success of the Hormel Austin plant the last 30 years, it’s our people,” Schweitzer insists. “That is what has made Hormel Foods successful.”
“We have such a dedicated workforce here,” Fritz says. “Hormel Foods prides itself on being the kind of company people want to work for and where they can establish a long-term career.”
During the Austin plant tour, Brandon Koehler, lead supervisor of dry sausage; Dan Lilly, new smokehouse operator and former blend system operator; Matt Wenzel, supervisor of the smokehouse department; Jim Nelson, slicer operator in dry sausage packaging; and Rod Ryks, chairman of the safety committee and an employee in the ham boning department – which recently celebrated 406 days without an OSHA-reported injury – all credited teamwork for the Austin facility’s continuing success and outstanding worker-safety record.
“Everybody pulls together...it’s all about working together,” Ryks says.
Last year was the best year in worker safety for the Austin plant. Hormel Foods managers continue to challenge their employees to work safely, Fritz says. “We track our training, and our compliance on our training is 99.9 percent,” he adds.
“We drive that worker-safety culture – and it’s working,” Fritz says. “I take worker safety very personally.”
Fritz’s major challenge is ensuring the plant is running safely, consistently, effectively and efficiently every day.
“You have to trust your people. I have 14 direct reports, including seven operating superintendents,” he says.
Each year the Austin facility is challenged to produce more product.
“We somehow accomplish this every year,” Fritz says. “Last year was a record year in tonnage and volume coming through the plant.”
But space keeps getting tighter. “We keep thinking there’s no way we can squeeze more out of this building – but every year we figure out a way to do it,” Fritz says. “Last year we produced more SPAM than ever before. And through three periods of this most-recent year, we’re ahead of that volume by about 4 percent.
“We keep finding innovative ways to produce more without adding brick and mortar,” he concludes.