Jim Holdrieth general manager of SensoryEffects39 Powder Systems division shows a sample of the foods and beverages using the firm39s ingredients and processes

Jim Holdrieth, general manager of SensoryEffects' Powder Systems division, shows a sample of the foods and beverages using the firm's ingredients and processes.

SensoryEffects Grows from the Molecule Up

Innovation and differentiation are feeding this food ingredient manufacturer’s appetite for growth.

No one’s life seems to be getting any simpler, so it should come as no surprise that the food we eat is following the same path. Americans want safe, tasty food that can be served conveniently and quickly. Their palates are growing more international at the same time that their desires for healthy foods and foods that avoid issues with gluten and other allergens are expanding. Food manufacturers are under pressure to provide a growing array of foods in innovative packaging and to do it all cost-effectively.

Helping food companies deal with this challenging culinary landscape is SensoryEffects, a food and beverage ingredient manufacturer. Seven years ago, the company started out with most of its business focused on commodity products such as coffee whitener. Today, SensoryEffects has three divisions ­- Powder Systems, Flavor Systems and Cereal Systems -­ and is increasingly focused on customized solutions that help food companies innovate in a more diverse market. This growth and business direction is reflected in the firm’s customer and product figures that both number in the hundreds.

Jim Holdrieth, general manager of SensoryEffects’ Powder Systems division based in Defiance, Ohio, says the company purchased the business with the intent to move it away from commodity production and focus on its potential in downstream emulsification powders.

By working with customers and staying on top of consumer trends, SensoryEffects helps customers innovate protein offerings in new health and wellness categories such as protein beverages, nutritional shakes and medical foods.

SensoryEffects uses refined combinations of fats, carbohydrates, emulsifiers and other minor ingredients to produce product formulas that create attributes such as creaminess, enhance flavor and color, prolong shelf life and deliver nutritional properties.

To facilitate new product development, SensoryEffects encourages direct interaction between its customers and the firm’s research and development team. Holdrieth says half of the company’s product pipeline is based on such interactions.

“Our customers have as much interaction with our R&D, our plant manager, and our supply chain as they do with a sales rep,” he says. “There is no gatekeeper.”

Holdrieth says many customer R&D departments are overloaded. “They need to be innovative, especially in the food industry. We try to enable them to skip some steps,” he says. SensoryEffects holds innovation meetings with customers where it asks them what types of products they are trying to develop. SensoryEffects then develops prototypes, provides information on market trends and let them see and taste samples of products that target their market. These meetings help generate ideas so customers will want to work with SensoryEffects on their own custom product.

Driving Productivity One Step at a Time

SensoryEffects employs a continuous improvement operating philosophy to increase the efficiency of its manufacturing capabilities. “We work constantly on our processes internally,” says Holdrieth, seeking to gain more capacity from its existing production equipment and leverage its buying power for raw materials. “We measure productivity by employee every year. Every year, productivity has increased. As we have moved the product line from commodities to more differentiated products, we have enjoyed a higher average sales price.”

Holdrieth says the Defiance facility works on a five-week manufacturing plan and uses weekly multi-discipline manufacturing meetings to keep on top of its demanding production schedule.  Since acquiring the facility, he says, the company has been able to increase the production capacity by 40%, not from one major change but a series of incremental improvements.

“All the little things make the difference,” he says.

Holdrieth says his division’s growth is also due in no small measure to a work force with a “work ethic that is off the charts.” He says, "We are so impressed with the skills, positive attitude and work ethic of our team in Northwest Ohio."

The company has also built its production footprint through acquisitions. Since 2007, it has purchased 12 companies and Holdrieth says the firm has over 100 potential acquisitions on the table at any one time. Most recently, the firm purchased the dairy and non-dairy creamer business of Quality Ingredients Corp., resulting in it adding a Marshfield, Wis., manufacturing site with a spray dryer and other dry blending equipment.

Because Sensory Effects has both large and small spray dryers, it can process a variety of products cost-effectively. Holdrieth says the Defiance facility typically runs 15 different products in a week, allowing customers to produce more customized functional ingredients and grow production quantities as the product develops a market.

The drive for innovative, convenient products shows no signs of abating, says Holdrieth. “The consumer’s expectation has grown dramatically. When you were a kid and put chocolate milk powder in milk, you had to stir it and stir it. Now people expect that they dump powder in and it will completely dissolve. It will be completely soluble. They don’t want to use a mixer. That is the challenge – particle size manipulation, bulk density, flowability -­ those parameters are the challenge in delivering the end product.”

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