CHELSEA, MICH. — Chelsea Milling Co. has received preliminary approval from the city of Chelsea’s planning commission to add nine silos for various ingredients needed to produce larger bags and boxes of Jiffy Mix products, according to the Chelsea Standard. The $35 million expansion will begin next month and will include two small buildings to be used for processing equipment.
Chelsea Milling said the expansion reflects the company’s move to build its presence in the food service and institutional markets.
“We really haven’t penetrated (the institutional market) yet and that’s why we’re doing this expansion,” Howdy Holmes, chief executive officer of Chelsea Milling, told the Chelsea Standard. “In order to service the food service sector we need food service packaging lines, a new mixing department, we need our flour transfer system — in other words, we don’t want to penetrate food service without being prepared to do so.”
According to the Chelsea Standard, the nine new silos will be built adjacent to the company’s three existing silos. Most of the silos are expected to be used to store flour, while others will be used to store ingredients such as dextrose.
Mr. Holmes told the Chelsea Standard that the company expects to quickly penetrate new markets with the additional capacity. Those markets will include 50-lb bags of Jiffy products to be shipped to prisons and hotels, and 45-lb bags, 2.5-lb boxes and 5-lb boxes to food service customers such as restaurants, schools and hospitals.
“We’re the value player … the value proposition,” Mr. Holmes said. “The net pricing is the same price whether you buy 100,000 in retail or just one. There’s no advertising, no couponing … we just keep it simple.
“Our approach is ‘let’s do it right from the giddy-up’ and although we are currently in (the institutional market), we entered with limited equipment.”
The majority of the expansion is expected to be completed by the spring of 2014.