This Rock Island, Ill.-based bakery doesn't view other sugar-free products as its competition; it strives to surpass full-sugar products. As the diabetic, sugar-free market continues to grow, Hill & Valley's lean production is poised to meet the demand.
Nearly 24 million children and adults in the Untied States have diabetes, and another 57 million are currently in a pre-diabetic state, according to the American Diabetes Association (ADA). In the past, this diagnosis would have meant these consumers would have to eschew bakery products. However, Hill & Valley, Rock Island, Ill., is serving this niche by offering a variety of sugar-free and no-sugar added sweetgoods.
“For those diagnosed with diabetes, one of the first things that comes to mind is ‘I can't have sweetgoods anymore,’ or they go to the store and the baked products made without sugar have an aftertaste. They are under the impression they have to eat products that don't taste great,” says Scott Florence, president/C.E.O. “We have award-winning products we formulate to taste just as good if not better than full sugar products. That's the first step that connects with the consumer.”
And, the consumers are responding. For the past 10 years, Hill & Valley has consistently delivered double-digit growth. Florence expects similar growth this year, selling almost exclusively to supermarket in-store bakeries.
With 109 SKUs in four categories — muffins, cakes, cookies and pies — Hill & Valley offers something for almost every consumer looking for a sugar-free or no-sugar added bakery product. The high SKU count is a result of founder George Coin's experience with his family's wholesale bakery that sourced all bakery products for a local supermarket chain. In 1986, Coin opened his own bakery, Nancy's Pies, that made sugar-free products. Florence joined the company in 1995, and at that time the bakery began to rapidly expand its product line. Coin retired in 2005, selling the bakery to an investment firm.
About three years ago, the bakery renamed itself Hill & Valley, with all products carrying the same brand name. “This is a brand now, emerging from a nutritional claim, so we have to think differently,” Florence says. “How do we communicate that to the consumer? Our partnership with the ADA is part of that.”
In step with ADA
In 2009, Hill & Valley became a national promotional sponsor of the ADA and its Step Out Walks to Fight Diabetes. Fourteen products — two-pack oatmeal cookies and several varieties of angel food cake, mini muffins and sliced crème cakes — rolled out with new labels in May featuring a special Step Out to Fight Diabetes logo, highlighting the product's compliance with ADA standards. Hill & Valley is currently working with the ADA to introduce even more ADA-labeled products in 2010.
“We were naturally aligned to meet ADA requirements, but we did have to do some minor reformulations in order to make sure we were compliant with what the ADA would perceive as being proper food items for a healthy diabetic lifestyle,” says Amy Behning, director of marketing. “We looked at their guidelines and said, ‘this product is really close, we could do some minor modifications.’ ADA-labeled products have the same premium tasting qualities as the rest of our products.”
The sponsorship also includes a significant brand and sales promotion to help grow and introduce the bakery's products to the diabetic market, Behning adds. It includes manufacturer's coupons and instant redeemable coupons on certain products as well as ads in national diabetic and healthy living magazines. Hill & Valley also provides in-store bakeries with ironman signs, tabletop signs, rack toppers and freezer clings to help promote the walks and Hill & Valley's sugar-free products.
Throughout the year, Hill & Valley will partner with retailers in about 20 markets to help promote the Step Out Walks. In five of those markets, the bakery will showcase its Step Out Café, a large tent offering free fresh fruit, Hill & Valley ADA-compliant products, hot coffee and bottled water. The cafés are co-branded with the bakery, ADA and the local supermarket and will connect with walkers who can sample Hill & Valley products as well as entertain participants before and after the walks, Behning says. “Hill & Valley wants to assist in positioning our retailer partners as a community resource for health and nutrition. It is truly a win-win-win promotion for the ADA, Hill & Valley and our retailers,” she adds. “Diabetes changes a person's lifestyle, but what Hill & Valley provides are great-tasting bakery items that they thought they had to give up.”
Formulating without sugar
“We spent a lot of time coming up with the right blend of sugar substitutes because the taste profile we are looking for has to be equal to or better than its matching product with sugar,” says Jose Velez, R&D manager.
Hill & Valley uses a variety of sweeteners, but mainly maltitol and sorbitol as well as acesulfame potassium and sucralose or Splenda to give products a little extra sweetness, Velez adds.
“We've been in business a long time, and we know a lot more about these sugar replacers and how they apply to bakery than other manufacturers,” Florence says.
By removing the sugar, Velez and his R&D team not only have to replace the sweetness, but sugar's other qualities, such as caramelization, shelf life, moisture and texture or mouthfeel. And, the replacement ingredient is often not a simple 1:1 ratio. For example, Splenda is 600 times sweeter than sugar, so emulsifiers and starches need to be added.
“We're always changing our formulations and trying to solve problems. We always want to make sure we have the best-tasting products,” Florence adds.
Developing new products is a joint effort between the R&D department and marketing, which conducts consumer panels to see what consumers want. One new product introduction Hill & Valley will launch in the near future is cupcakes. The new line of cupcakes is trans-fat free, as are all of the bakery's products.
With the 109 SKUs, achieving production efficiency can be difficult. “When you have a broad product line, no one product line is always begging for additional productivity or investment. You have to drive out cost one second at a time or a partial person at a time. The best way to do this is lean production, which allows you to continually improve each workstation,” Florence says.
The 60,000-sq.-ft. facility devotes 25,000 sq. ft. to production, which is set up in three product cells: cakes, cookies and pies. The only pieces of equipment that can't be moved are the mixers (except batter mixers that are on wheels for mobility), the pie line and the 17 double rack convection ovens. The batter mixers and depositing equipment are mobile as are parts of the cake and cookie lines. Some components of the lines are interchangeable. One 90° conveyor turn is used on the first shift for cookies and then used during the second shift for crème cakes. “We do not have any monuments to production like big long tunnel ovens,” says Jim Graham, plant manager.
Lean production attempts to eliminate unnecessary movement by employees, which allows them to devote more time to productive labor and allows the bakery to reduce costs. This is accomplished by setting up the lines in circular cells, where the product does most of the moving and not the employee. Moving the dough from the mixers to the line and the racks from the line to the ovens and back proved more efficient than having the employees move more. “Before switching to lean, we did a study to see how far people traveled to complete the product, and they could travel quite a ways,” Graham says. Now, employees are mostly stationary.
For example, after cookie dough is mixed, it is transferred to depositors where pans travel on a conveyor below the depositor to an employee who places the trays on racks. The racks are then transported to ovens, and after baking the racks of baked cookies are moved back to the cookie line where employees take the cookies off the trays and place them in clamshells. The empty trays slide on a conveyor back to the depositor to be filled again. Discards are thrown on a belt that moves in front of the employees to be deposited in the reject bin. Employees no longer have to turn to throw the deformed cookies in a bin behind them. Once the cookies are placed in the clamshells, they are conveyed through a metal detector, checkweigher, labeled and boxed.
“No one is moving on the line,” Graham says. “In lean production, we are looking to improve ergonomics and eliminate movement.”
On the pie line, meringues are run on one side and fruit on the other. For meringue, the pastry dough is placed in tins and baked. The pudding for the meringue pies goes through a heat exchanger to bring it down from boiling to about 70°F. Then, the cooled filling is deposited into the shells, followed by the meringue that is peaked by hand. The pies continue on the conveyor to infrared burners for browning and are moved through a cooling tunnel. After cooling, the pies are labeled, checkweighed and sent through a metal detector before an employee boxes them.
For fruit pies, after the shells are in the tins, the fruit is deposited by hand and a slurry is deposited over the fruit. Then, the pie is covered with more dough, pressed and transported to the oven or boxed for the freezer if it is being shipped unbaked.
“We used to mix our fruit and slurry together in a kettle, but the mechanical process of transferring destroyed the fruit. You started out with whole pieces of fruit and ended up with jelly,” Graham says. “We went to a manual process of putting the fruit in, so we end up with a very nice looking pie with lots of whole pieces of fruit.”
With lean production, in each phase of the process, you balance the rate of the people so that one isn't running faster than another part of the process, Graham adds.
“It is a totally flexible, very innovative way to approach production,” Florence says. Product is shipped frozen with a shelf life of 20 to 40 weeks. Once thawed, the shelf life ranges from five days to a month, depending on the product. Pies have the shortest shelf life and cookies have the longest. Most products are completely sugar-free, with the exception of a few products that have ingredients, such as fruit, that contain naturally occurring sugars.
The point of the brand is to solve a problem for consumers who are searching for sugar-free baked products, Florence notes. Hill & Valley's goal is to provide those consumers with a solution.
Hill & Valley Bakery
Headquarters: Rock Island, Ill.
Web site: www.hillandvalley.net
Management: Scott Florence, president/C.E.O.; Mark Robson, C.F.O.; Jim Graham, plant manager; Jose Velez, R&D manager; Amy Behning, director of marketing
Product line: sugar-free cookies, crème cakes, decorated cakes, brownies, muffins, cupcakes and meringue pies; no-sugar added fruit pies
Plant size: 60,000 sq. ft. — 25,000 sq. ft. production, 25,000 sq. ft. warehouse, 10,000 sq. ft. freezer
Number of employees: 120
Production lines: two pie lines, one for meringue and one for fruit; cookie line and two to three cake lines for crème cakes, decorated cakes and angel food cakes