Building a better bar
Elan Nutrition adjusted its recipe for success and has found it comes in many different flavors. Jennifer Monroe reports
Anyone in the food industry will tell you it’s the right ingredients in the right amounts that make a product a success. But at Elan Nutrition, this philosophy applies to its business practices, its operations, and its products.
Elan is a private-label manufacturer of nutrition food bars. When it was founded in 1980 as Five Star Brands, it set its sights on providing nutritious snacks for the local market. Now it is a national manufacturer of the most technically complex nutritional bars and serves the sports, health and wellness, meal replacement, and nutraceutical markets. Elan’s products provide: balanced nutrition for meals and snacks; diet and weight management including low carbs, low fat, and specialty diets; and sports nutrition, including energy and high protein bars.
While today the company’s sales lie between $75 million to $125 million, it was far from healthy just two years ago. “Elan was underperforming at the time,” explains David Finnigan, president and CEO. “It was losing money.”
Enter Sun Capital Partners, an investment group. It purchased the company, renamed it Elan, brought in an entirely new management team, and immediately invested $10 million into capital equipment for the company’s 230,000-square-foot facility. This facility, still new itself, was built in 2000 to help the company improve quality, and to place an R&D lab next to a full-scale pilot plant.
Finnigan describes the new team as having a “diverse food background” with most of the members coming directly from the food industry. As for himself, Finnigan spent 17 years at Armstrong World Industries, with the last 11 years in general management positions in multiple industries. Just before joining Elan, he was at Dal Tile International, a $1.2 billion dollar ceramic tile manufacturer.
This team set as its first priority the development of a three-year plan to create an environment of teamwork and trust; encourage employee involvement at all levels, conduct business in an ethical manner; achieve constant improvement in quality, cost, and time; and measure and reward performance.
Next, each functional group developed its team objectives, which mirrored those of the entire company. Finally each individual employee set his or her own goals and objectives, again mirroring those of the functional group and the company. “Everybody is pulling the same way,” Finnigan says. “My plan as the CEO is the same as the people in the plant. We measure it, we review it on a monthly basis, and that’s the fundamental baseline of our plan.”
From this base, Elan evaluated the market and found a number of opportunities. With Sun’s capital investment, the company was able to add new technology to and expand existing technology within its manufacturing operations. “Prior to the investment we had a lot of single extrusion and limited co-extrusion,” says William Curtis, vice president of operations. “When Sun came in we tripled our co-extrusion capability because that is what we believe the marketplace is going to.”
Curtis should know. He brought more than 25 years of experience in the manufacturing and quality assurance operations of major food and non-food manufacturers to Elan. He served as regional quality control manager for Frito Lay, plant manager of a variety of plants in the Kraft/Nabisco system, and just before joining Elan, as vice president of operations for Zelinka Nurseries.
What does this expanded co-extrusion capability mean for Elan’s customers? More flavors, layers, and textures. “We can provide the consumer with variety of taste and texture,” Finnigan says. “Today’s bars enable you to get crunchy, chewy, chunky, and more.”
Curtis agrees. “We can add a layer of fruit filling,” he explains, “so you can add a different flavor. You can go a little bit farther too. We have the capability to add a chopped nut on top or to drizzle an icing on top. When a consumer opens that package they see a layered bar: first there’s cake, and on top of that a jelly or a marshmallow, then some type of coating, then a little design on top to give it a little bit of a pop.”
New to Elan are sheeted lines which produce crisps and a packaging innovation that allows its customers to offer mini bars. “It’s like a Rice Crispy,” Curtis explains. “One of our customers likes to have a soy crisp, and this allows us to provide it. It gives our customers the opportunity to address the snack market.
“We started from the beginning, looking at what we could do to create excellent tasting products for our customers,” he continues. “From the beginning all the way through the packaging is all brand new and designed to give the most to our customers and consumers.”
In addition to the new equipment, Elan is beginning to introduce lean manufacturing concepts into its operations. “We’re in our infancy now,” Curtis says, “and we’re looking at it as employee involvement. It goes back to the principles.”
At the center of its continuous improvement efforts are safety, customer service, and waste reduction. Elan is focused on taking what Curtis described as “dead time” out of its processes, improving quick change over and moving to standardized parts. Employees are receiving training both in the community and at work, with cross-training a key component of their education. “We are making standard operating procedures a way of life,” Curtis adds. “Our engineers are out there everyday working with employees to improve quality and take out waste everywhere we can.”
While new equipment and quality operations are vital, the so-called “magic” happens in Elan Nutrition’s R&D department. Elan has a full development laboratory and pilot plant on site supporting technical product and process development. It is this staff of 12 that is responsible for the company’s creative and tasty recipes. “We bring products to our customers to be proactive,” Finnigan says. “We are a resource for them.”
Elan also works with customer requests to “build a bar.” For example, a customer might want a bar that addresses the needs of body builders or assists in bone and joint health. This customer is then assigned to a team that consists of people from customer service, R&D, and sales and they all work together to bring the product to life.
In addition to being beneficial to its customers, Elan finds having R&D in-house helps with speed to market. “We are always looking for ways to take time out of that process,” Curtis says. “Having the development in-house, we know the products, and we know the recipes.”
Getting the recipes right depends, in large part, on getting the right ingredients. Within the last year, Elan has worked to narrow its supplier base while deepening its partnerships with key vendors. “We narrowed our suppliers and then went back to them and gave them forecasts on our volume,” Finnigan says. “We asked them for price concessions and delivery alternatives. We also defined lead times with them; now they’re built in. Most of our suppliers now hold a minimum of inventory for us and ship it as we need it.”
Elan also has defined its specs for all of its products and put those in the hands of its suppliers. “That hadn’t been done in the past,” Finnigan continues. “We’ve gone back and defined what the specs are, and asked them to hit those specs. It eliminates some of the confusion and improves the process.”
Partnership with Elan extends beyond inventory and quality control, however. “One of the things we believe in is it’s beneficial to both parties if you partner with fewer people and move to true partnership,” Finnigan says. “We’ve partnered with them with R&D, and one company is working on proteins for us. Another has done some consumer testing so we can go out with third-party research.”
As it encourages open communication within its walls, Elan believes it should be open with its suppliers as well. It invited all of its vendors to its Grand Rapids, MI, facility to reinforce those partnerships in a group setting. “Our goals are now our suppliers’ goals,” Curtis explains. “They can give us a better product and we can certainly give the best product to our customers.”
Every day it is this drive for customer satisfaction that fuels Elan Nutrition and its constant measurements. “We have a bunch of metrics we measure,” Finnigan says, “and complaints are one of those. Our customers contact us with anything they hear from their customers. We’re talking to our customers at least weekly so we know about any issue immediately. We take those things to our employees, address them at once, and let our customers know what we’ve done.”
It is this decision to be open and honest with customers, suppliers, and its own employees that Curtis believes sets Elan Nutrition apart. “It is our competitive advantage,” he says. “We let customers in our labs and our plant. We really believe in the partnership side, and we have that same partnership going the other way with suppliers. We are zeroing in with fewer people but asking them to participate in our success at a greater level.”
30 Apr 2005 21:55A link to this article can be found at: http://www.themanufacturer.com/us/detail.html?contents_id=3406