Although Hill & Valley, Inc. specializes in baked sweet goods, you won’t find silos with thousands of pounds of sugar or high-fructose corn syrup at this plant. Neither will you see pallets or totes of these ingredients. No, the Rock Island, IL-based bakery is known as America’s largest exclusive manufacturer of sugar-free and no-sugar-added desserts. For more than 20 years, Hill & Valley has specialized in baking premium sweet goods without traditional sugars.

Instead, the bakery uses sugar alcohol blends and other low-calorie sweeteners such as maltitol, lactitol, sorbitol and sucralose. A sweet scent wafts in the air as workers unload sacks of these sweeteners into a horizontal mixer, but its products do not contain the sugars that increase blood glucose levels.

Hill & Valley was founded in 1987 by George Coin as Rock Island Baking Co., and at that time, its primary products were pies, including 4-in. snack pies named after Mr. Coins’ wife, Nancy. Soon, he realized the only snack pies that consistently sold well were the no-sugaradded pies, and after discovering this niche, the company changed its name to Nancy’s Pies in 1988 and concentrated on selling no-sugar-added pies, eventually moving on to other desserts.

Because of its expansion into cakes, cookies, muffins and other desserts, the company no longer believed that Nancy’s Pies was an apt moniker. The company had already begun branding products with Hill & Valley for more than a year before formally changing its name in July 2005.

A month later, Circle Peak Capital, a New York, NY, investment firm, purchased the company from Mr. Coin; however, this brought little change to the daily operations of the bakery. Mr. Coin’s son-in-law, Scott Florence, who joined the company in 1995 and served as president, remains with the company as its c.e.o.

Hill & Valley relocated to its current facility in 1998. The 60,000-sq-ft plant is in a former shopping center — the bakery is actually situated an ex-Zayre department store. The company employs 147, running three shifts, five days per week.

The bakery houses a variety of lines that produce cookies, decorated cakes and cupcakes, muffins, brownies and coffee and angel food cakes, as well as fruit, meringue, creme, pumpkin and pecan pies. The plant produces branded and private-label baked foods, the majority of which are sold nationwide at supermarket in-store bakeries. Approximately 95% of its products are sold in supermarkets with the remaining 5% destined for wholesale club stores. Its products are sold in a majority of the Top 25 grocery retailers in the US.

Although the company is private and did not disclose its annual sales volume, Mr. Florence said annual sales have doubled during the past five years. He attributed the company’s growth to product innovation at the bakery as well as a growing population of diabetics and others who want products with fewer carbs.

“Our consumer base originally consisted of diabetics and others who wished to control their sugar intake for health reasons,” Mr. Florence said. “While this remains a very important group for us, we recognize the growing number of consumers interested in carb-control for weight and body image reasons. They consciously reduce sugar in their diet as a duty to their health and wellness, and even desserts are subject to more responsible eating habits.”


In December, Hill & Valley launched two new 100-Cal cookies. The sugarfree Chocolate Chip cookies feature nearly 20% semi-sweet chocolate chips, and the no-sugar-added Oatmeal Raisin variety is loaded with cinnamon and plump juicy raisins. The cookies are sold in 12-count clamshell packages.

A main goal of the bakery is to make sugar-free and no-sugar-added products that are comparable to those made with sugar, according to Jose Velez, R&D and quality assurance manager. “We choose sweeteners that are safe for diabetics,” he said. “As a leader in the no-sugaradded and no-sugar category, we rely heavily upon our suppliers such as Cargill and Roquette. We partner with our suppliers to find suitable solutions. They provide us with proprietary blends of sugar alcohols. By blending sugar alcohols, we are able to obtain flavor profiles similar to products made with sugar.”

In addition to developing new products, Mr. Velez reformulated many of the company’s products to improve their quality since taking over the R&D department 2½ years ago. He joined the company as sanitation and production supervisor immediately after graduating from the 18-week resident course at AIB International in June 2004.

R&D must look at the sucrose content of any ingredients that it wants to use and see how the increased sugar content affects the product, according to Mr. Velez. “For example, milk has natural sugars, so we do not want to put too much in our products,” he explained. “However, it can add a lot of function to a product.”

In early 2006, Hill & Valley announced that all of its products had been reformulated for 0 g of trans fats. When it switched to zero-trans formulations, it also replaced partially hydrogenated shortenings with palm oils, according to Mr. Velez. Now the company is working to reduce the saturated fats that the palm oils impart to its baked foods. “We want our products to be as healthy for the consumer as they possibly can be,” he said, noting that the company has contracted with nutritionist Tia Rains, PhD, to assist in this effort.

Working in concert with the marketing department has also helped the company’s R&D department to be successful, according to Mr. Velez. “Having marketing involved from the beginning of product development allows products to be brought to market quicker,” he observed.


Hill & Valley has aggressively embraced lean manufacturing principles and practices, according to James Graham, plant manager. The company strives to conduct at least two rapid continuous improvement (RCI) events each month.

Heading up RCI events are Jesus Martinez, plant superintendent, and Jason Rush, maintenance manager. Prior to joining Hill & Valley, Mr. Rush worked at The HON Co., an office furniture manufacturer, where he participated in more than 100 lean manufacturing, or kaizen, events. “The projects eliminate muda, which is the Japanese word for waste,” Mr. Rush explained.

Hill & Valley’s first RCI event was in 2006 and involved its cookie line. Line workers have played an integral part in helping to identify RCI events, and before implementation, the company lets the employees try out the changes to see if they can adapt it to the line, according to Mr. Martinez. “People want to be more involved when we show them that we care and that their input is important in planning these RCI events,” Mr. Rush said.

A lot of the changes initiated through RCI events are minor, and the company tries to eliminate any ergonomic issues through these projects. “We try to make jobs repeatable,” Mr. Martinez explained. “We look what is the fastest, most-efficient way to work on a particular line, and we try to standardize that job to that work method.”

In addition, Hill & Valley offers gain sharing, and employees understand that if lines run more efficiently, they will receive higher bonuses, according to Mr. Rush. “Each one of the RCI events has made a big impact on efficiency,” Mr. Martinez said.

During the past three years, Hill & Valley has seen line efficiencies climb dramatically. “In 2006, our efficiencies were around 50 to 60%, and last year, they had climbed to between 90 to 100%,” Mr. Rush noted.

In fact, the company reset its standards so that efficiencies are back down around 75%, and it is once again able to work to improve line efficiencies. Mr. Rush said the plant hopes to increase efficiencies up to 90% again by next year.

One of the issues the company has encountered lately is that by becoming so lean, it is difficult to pull employees off lines to assist with RCI events, Mr. Martinez said.

Because the company prefers to do a RCI project every couple of weeks, it undertakes many 3-day events, where it is able to quickly make a change on a line to improve production. However, Hill & Valley also implements projects that require more lead time, and for these, it develops what it refers to as a newspaper and writes out schedules for events that may take several weeks.

“All people who can make it work are 100% onboard,” Mr. Rush noted. “From the top to the bottom of the organization, everyone supports the RCI events. And so far it has been a real success.”

In 2008, RCI improvement efforts resulted in hundreds of thousands of dollars in labor savings and increased efficiencies, according to Mr. Graham. “We may not have all the greatest toys,” he said. “But we are flexible and have a highly skilled maintenance shop that fabricates many pieces of equipment we need for our lines.”

When RCI events require new equipment to be installed along lines, Hill & Valley has designed and machined many of the new systems. Mark Walker, project engineer, plays an important role in developing much of the equipment needed to carry out these projects. For example, the team recently designed a pan denester for the angel food cake line and was able to assemble a pan oiler in a week for less than $500.


As part of RCI, the plant has developed what it refers to as manufacturing cells, which are basically lean manufacturing lines. Processing in the plant generally flows from south to north. On the far south side of the plant is a storage room featuring two 50,000-lb fabric silos from Contemar Silo Systems and a Pfening flour sifter. The plant receives two loads of pastry flour each week and one of cake flour. The plant also has bulk storage for liquid sweetener and soybean oil.

Two Artofex spiral mixers are used to make pie dough. The plant recently installed its second Votator scraped-surface heat exchanger from Waukesha Cherry-Burrell to cool pie fillings such as chocolate before they are pumped into tubs.

Pie shells are made on a Col- borne Series 15 straight line pie machine. The company hand-fills the pie crusts with IQF fruit and a slurry mixture when making fruit pies. Creme and meringue pie shells bake unfilled at 350°F for 20 minutes before cooling at ambient temperatures prior to being moved to the appropriate lines for filling.

All products at the plant are baked in one of 17 double-rack rotating convection ovens. “The ovens are our bottleneck,” Mr. Graham pointed out.

The meringue pie line features two Unifiller Pro 1000 depositors with photo eyes that automatically spot and fill pie shells. After the lemon or chocolate filling is deposited in the pie, a meringue topping is applied, and the pie travels under a series of infrared heaters designed by Mr. Walker to brown the meringue. The pies then travel through a short in-line cooling tunnel, which also was designed in-house, before the clamshell lid is placed on the pie.

Two Unifiller Pro 1000 depositors are also employed on the creme pie line. These depositors currently feature foot pedals to apply fillings such as chocolate, coconut and banana and whipped ice topping; however, the plant plans to install photo-eye sensors on these depositors in the near future. An E.T. Oakes continuous mixer makes the whipped ice topping, which is pumped to the creme topping hopper.

In the past year, Hill & Valley installed a refurbished Peerless 1,000-lb double-sigma mixer, which the bakery purchased from Topos Mondial, to mix cookie dough. The cookie manufacturing cell features a packaging line that flows into the production line in a closed-loop system, so that cookie pans do not have to be moved from packaging to the depositing line.

A new Vemag cookie depositor from Reiser drops cookie dough onto the pans that are then handloaded onto double racks for baking. The baked cookies are unloaded and packed into clamshells by hand, and a Video-Jet printer codes packages with date and lot prior to being loaded into cases. A new Combi case erector/packer is used by both the cookie and sliced creme cakes line. To do this, the company laid out this cell in a manner that a curved conveyor is able to be moved to transfer products either from the cookie line or from the slicer, installed directly after the newly installed spiral conveyor, which cools cakes to less than 50°F prior to slicing.

Both the cookie and the sliced cake line feature denesters for the clamshell packaging from Graphic Packaging International. The plant also uses four Anritsu metal detectors/checkweighers for quality assurance checks.

Overall, production at Hill & Valley is extremely flexible, which makes it easy for the company to make a wide range of baked foods. The company has adhered to lean manufacturing principles to greatly improve line efficiencies, but like any successful company should be, it is never satisfied and is continually looking for areas where it can further improve operations. This is why Hill & Valley is a leader in the sugar-free and no-sugaradded dessert categories.