In Tortilla Territory
Customer projects get first priority from Casa de Oro Foods’ QA and R&D group.
BakingBusiness.com, May 1, 2006
by Laurie Gorton

Satisfying customers is job No. 1 at Casa de Oro Foods, a 2-plant producer of flour and corn tortillas and corn-based snacks based at Louisville, KY. This mission shapes the responsibilities, activities and projects of its Omaha, NE-based R&D group, headed by Charles Kraut, Ph.D., vice-president, product development and quality assurance.

Today, Americans consume more tortillas than ever, creating a market worth $6 billion, according to the Tortilla Industry Association’s most recent estimate. As this preference continues to grow, it’s important to refresh the category with new products to satisfy those tastes. The same holds true for tortilla chips and corn-based snacks.

And when those tortillas and chips bear another’s brand, as does much of the output at Casa de Oro Foods, those customers get first priority, both in new product development and troubleshooting. So, it follows that quality assurance is also part of this group’s responsibility and acts as “the guard at the gate,” as Dr. Kraut puts it.

CUSTOMER FOCUS

Time in R&D is allocated by priority of the project, and customers always get first priority. That’s no surprise. The company pioneered long-shelf-life tortillas and expanded the dinner kit market beyond corn tostadas and taco shells to the flour-based products so popular with Americans. Looking ahead is a vital part of the service it now provides its customers.

“When we started Casa de Oro in 1992, we had a limited customer base, and the department’s focus was on how to build the business by bringing in more customers,” Dr. Kraut explained. “The mission at Casa de Oro is to meet or exceed customer expectations, and that applies to R&D and QA as well.”

That assignment evolved over the years. Although customer-related matters, including new product development, still set the pace, the staff has become more proactive, according to Dr. Kraut. “We address issues facing the customer before they become concerns for our business, and we also explore trends and study ideas yet to be commercialized.

“The industry is moving beyond the Mexican food category,” he continued. “Tortillas have become a staple in American diets replacing bread. What drives the market today are all the new uses: wraps, desserts, salads. A tortilla can be almost anything.”

“Tortillas only seem simple,” said Omaha Lab Manager Pam Berndt. “When people find out that I work for a tortilla company, they ask, ‘What’s so complicated about tortillas?They’re just flour and water, right?’ But there’s a lot more to tortillas than that!”

GOLD STANDARD

ConAgra Foods, Omaha, formed Casa de Oro Foods in May 1992 to produce flour tortillas, a new category of grain-based foods just then emerging into the marketplace . The company renovated an idled food processing plant on Omaha’s Central-West side to house three high-tech tortilla lines supplied by an automated ingredient system.The plant shipped product to its first customer in January 1993. Five years later, ConAgra purchased Mesa Foods, Louisville, KY. This producer of corn-based tortillas and snacks was merged with Casa, bringing with it the retail brands Mesa and Chi-Chi’s (licensed from the restaurant chain).

In 2004, Casa de Oro was acquired from ConAgra by Plaza Belmont Management Group LLC, Shawnee Mission, KS, an investment firm that specializes in food manufacturing companies. Robert Parnow, a Plaza Belmont partner, oversees the tortilla company, which today ranks as one of the Top 5 largest in the US. The two plants with their combined total of 280,000 sq ft of manufacturing and warehouse space ship products throughout the US east of the Rockies.

Over the years, the company added production lines and products. Omaha, for example, saw the number of heat-press lines in its processing shop rise from three in 1993 to seven today, filling the plant to its physical limit. “Louisville gave us corn capacity and room to expand,” Dr. Kraut noted. The company’s product menu now extends to flour tortillas, corn tortillas, taco shells, tortilla chips, pre-cut chips, gorditas, flat breads and tostadas plus dinner kits.

Making more than 6 million tortillas a day, Casa de Oro generates approximately $60 million in sales annually. That figure is expected to double in the next few years, according to Ted Longacre, Casa de Oro’s president, who observed that tortilla sales continue to climb 10% or more annually.

R&D PLUS QA

While Omaha is home to Casa’s R&D operation and its pilot plant, there is strong delegation of responsibilities to Louisville, according to Dr. Kraut. The Omaha department consists of him and Ms. Berndt, plus a full complement of line and quality technicians. At Louisville, QA Manager Denise Moore oversees a similarly staffed department. As head of R&D and QA, Dr. Kraut reports directly to Mr. Longacre.

The relationship between the two locations is mutually supportive. “Louisville and Omaha are very similar in their setup,” Dr. Kraut said. “The QA staff in both labs assists the R&D effort when the need arises.”

Dr. Kraut tries to allocate his time 50:50 between the two locations. During the past year, he had a heavier schedule at Louisville because of changes in plant management and installation of a new line there. Recently, he has concentrated on Omaha and a series of R&D pilot plant projects.

When the company started up, however, the need was for QA. “The first requirement here was to make Casa the customer’s choice and, thus, quicken the pace toward profitability,” Dr. Kraut said.

“I came over from ConAgra’s central lab in downtown Omaha, and QA was 100% of my assignment,” he continued. “Until that point, my food industry career was completely in R&D. I gained all my QA experience with Casa.” A native of western Illinois, Dr. Kraut received his bachelor’s degree from Kansas State University, Manhattan, in bakery science and technology, and he continued his education by earning a master’s degree and doctorate in food science and human nutrition from Michigan State University, East Lansing.

As the company grew and evolved from serving a limited customer base to a more diversified one, Dr. Kraut’s department found its responsibilities growing, too. “Over the years, we brought in additional staff to help with these activities,” he said. And then he challenged them to seek additional experience and build responsibilities. “Pam Berndt is a good example,” he observed. Graduating with a degree in chemistry and microbiology from University of Nebraska, Omaha, she joined the company in August 1993 as one of its first lab technicians.

“I started out testing raw materials to make sure they met our specs,” Ms. Berndt explained. “When the microbiology position opened up, I took that on, and more responsibility fell on me. Next were auditing responsibilities and troubleshooting of the lab equipment.”

“Pam is also our Six Sigma ‘black belt’ and is involved with product and process improvements,” Dr. Kraut noted. Six Sigma programs seek to increase profits by eliminating variability, defects and waste that undermine customer loyalty.

PERSONAL GROWTH

Casa de Oro managers recognize that the need of its people to stay current in their skills is as important as the need of its plants to stay current in their processing technology. The company managers attend industry association meetings and educational seminars to stay in front of trends and process changes. This information is then transferred to other employees through company training sessions.

“Staying current in skill sets is critical for the evolution of our company,” Dr. Kraut said. Enrichment activities also include reading industry trade publications, talking to customers and attending seminars. Both Ms. Berndt and Ms. Moore recently returned from taking an auditing course at Dallas, TX, and Ms. Berndt cited completion of the American Institute of Baking’s food science correspondence course as another activity. “The more exposure to new things, the better our projects will be,” Dr. Kraut said.

Explaining the benefits, Dr. Kraut credited the knowledge and longevity of the Omaha employees with their ability to manage more responsibilities than would normally be expected. He stated this was unusual among food plants and something his company considered a big advantage in business.

ON GUARD

To build on advantage requires a strong foundation, which QA provides for Casa de Oro. “QA has had more to address lately than ever before,” Dr. Kraut said concerning the changes brought about by the Public Health Security and Bioterrorism Preparedness and Response Act of 2002. “We were already doing verification before 9/11, but it has become even more of an issue.”

He described QA effects as being more intense and requiring his staff to probe further up the supply chain. The company checks the seals on all trucks bearing incoming materials and outgoing finished products. At the receiving dock, Ms. Berndt examines the paperwork that comes in with each shipment. She also visits suppliers in person on an annual basis to audit them, and Dr. Kraut audits them at least every other year.

Allergens pose different challenges. There is the matter of proper labeling, a legal requirement since January 2006. “We were doing this before, but the process is more rigorous now,” Dr. Kraut observed. Ms. Berndt added, “And we have to be more careful about segregating allergenic ingredients in the warehouse.”

“QA has to be the guard at the gate,” Dr. Kraut explained. “There are no gray areas in quality. It has to be black or white. We have to be in range. This is where we have most conflicts on meeting quality specifications, yet QA must assure the highest quality for our customers.”

Operations staff at both facilities understands that quality is the most important factor to customers and the company, according to Dr. Kraut, and both departments work hard to maintain high standards. “Often QA leads the effort, but operations come right along, too,” he said.

THREE TECHNOLOGIES

R&D activities at Casa de Oro support three technologies. As Dr. Kraut explained, these are: 1 — heat-pressed flour tortillas, 2 — sheeted and die-cut tortillas and 3 — corn products such as chips and taco shells.

“From an instrumentation standpoint, we are very well equipped to support the heat-pressing process,” Dr. Kraut stated. From the start, the Omaha plant was laid out and equipped with a pilot line that mimics the Lawrence Equipment Mega production process. “The equipment, which was built by the vendor of our heat-press lines, allows us to do formula and process development before we take up time on the production lines. It is a key asset,” he explained.

The pilot plant — playfully called “the skunk works” or “Mini Mega room” — occupies about 500 sq ft and contains a Peerless horizontal mixer capable of turning out 400-lb batches. The press line encompasses dividing, resting, pressing, baking and cooling operations. Controls on its press and oven are identical to production-scale systems. “This makes it easy for us to move a process from the pilot plant to the production floor,” Dr. Kraut said. “Our customers often come in here to work side-by-side with us.”

To work on sheeted and corn products, R&D must cooperate closely with plant management to test on actual production lines. Casa de Oro also takes full advantage of the test facilities operated by its equipment vendors.

At an appropriate time, Dr. Kraut would like to add in-house pilot capabilities for sheeted and corn items.

Acquisition of the Louisville plant wrote a new chapter for R&D and QA entitled “Corn.” Dr. Kraut observed, “We are still learning the corn process.What are the quality factors that determine success? How do you maintain flavor in masa versus cooked corn approaches? There are still plenty of challenges.”

He continued, “People think this is a simple industry, but it’s not.There is a lot of technology involved that people don’t realize.”

TRIALS AND RUNS

Taking a product out of the pilot plant into production varies depending on location. In Omaha, things move in a straight forward fashion. Formulas and processes are developed and lined out in the pilot plant using small batches. When formulation work has advanced enough for a line trial, the first doughs are mixed in the pilot plant and then transferred out to one of the press lines. Settings in the pilot line can transfer almost completely to the main lines here.

“When we’re ready to run, I go to Ron Hardenbergh, the Omaha plant manager, and we set up a time,” Dr. Kraut said.

Mr. Hardenbergh lines up the shift supervisor and line operators to aide in this process. “They know it is a test and that there will not be a lot of time to set up and run with only 400 lb of dough,” Dr. Kraut continued.
Projects to be executed at Louisville are arranged through Rajeev Talwar, that facility’s plant manager.

“In product development, we are always busy,” Dr. Kraut said, noting that the latest trend involves products that promote health. He and his staff are actively exploring such items.

“New products are the life’s blood of any company,” he observed. “Our projects contribute to growth, thus sustaining the company’s forward momentum.” The department manages five to 10 active projects at most times, but there are usually 20 or more on the table for consideration.

Where do new ideas come from? “Everywhere,” answered Dr. Kraut and Ms. Berndt simultaneously.

“There are projects I would like to do,” Dr. Kraut said. “There are projects that come from customers, and these have priority . Also, we rely on trade publications, on ingredient suppliers and on our customers to bring in new ideas.”

One of the most interesting projects — tortillas for NASA space flights — started with a phone call. “I received a call out of the blue, so to speak, from a woman at NASA,” Dr. Kraut recalled. “She had purchased a tortilla dinner kit and wanted to know which company made the long-shelf-life tortillas it contained. ‘We do,’ I told her, and we sent samples. The program evolved from there.”

Obviously, this is not a big volume order for Casa de Oro, and the truth is that the company donates these products to the space program. NASA repackages the tortillas according to the requirements of space flight.

“Tortillas don’t crumble like bread,” Ms. Berndt said. “There’s a video clip on the NASA Web site that shows the program’s use of our tortillas. The ‘no crumbs’ comment is one made by the astronauts in that clip.”
“We enjoy this relationship, and the employees take great pride in it,” Dr. Kraut added.

TECHNOLOGY ASSIGNMENTS

As these managers noted, there is a lot more to tortillas than flour and water!

“Ingredient choices continue to evolve,” Dr. Kraut said. “The trans fat issue is one of our biggest challenges, and alternatives to shortenings containing trans fats are not where they need to be yet for our industry. Even so, we are being proactive and taking the trans out.”

Casa de Oro assisted in a recent project to improve chemical leavening for tortillas. The effort, led by Barbara Heidolph, principal scientist at Astaris (now ICL Performance Products), studied the functional roles of these ingredients. Some of the work to test her theories was done in the Omaha plant. She reported her research at a Tortilla Industry Association sponsored symposium at the 2001 annual meeting of AACC International.

“New products and new processes go hand in hand,” Dr. Kraut said. “A given project could involve a minor change in equipment settings or a major development requiring capital allocation.”

The Omaha plant was highly automated from the start with the latest in Shick ingredient handling and Lawrence processing equipment. “Counter-stacker technology has really changed in the past five years,” Dr. Kraut observed. “The systems are now more accurate and require less maintenance.

“Actually, I see tortilla technology as making a huge leap in the past five years or so,” he continued. “Consider vision systems. We first looked at them 10 years ago, but the capability wasn’t there at the time. It was a problem primarily of computing power, and that’s changed now. Today most new lines have vision systems. In Louisville, we installed two new vision systems in the past year. These are valuable to Casa because they can improve quality and production speeds all at the same time.”

He implied that even more exciting changes are on the horizon. “Ingredient and equipment suppliers need to know the tortilla industry better,” Dr. Kraut said. “There are so many opportunities here. I say, ‘Bring it to us!’”