Specialty chip maker packs quality into its bags: budding potato chip processor shares lessons learned in setting up an effective packaging operation - Plant Operations - Route 11 Potato Chips

Food & Drug Packaging, Dec, 2001 by Lisa McTigue Pierce

As business grows, Route 11 Potato Chips is determined to keep the best elements of a small, quality-focused company in its processing and packaging operations.

Route 11 hand cooks premium potato and mixed vegetable chips that taste great (I've tried them!). Owner and president Sarah Cohen says it's important for customers to feel like they're getting a value.

"Even though we're a specialty potato chipper, we still make potato chips," she says. "People have a set notion in their mind of how much they're willing to pay for a bag of chips. We want to give them something that's worth paying more for."

The products retail for $0.99 for a 2-ounce bag up to $1.25 for a 5-ounce bag.

QUALITY ABOVE ALL

Giving customers value is one of the reasons why product quality is paramount. On the processing side, Cohen spends the extra money to use a blend of peanut oil and the more-expensive sunflower oil as part of the recipe in making the chips taste as good as they do.

On the packaging side, Route 11 gas flushes and uses barrier packaging materials to preserve product freshness and extend shelf life. The laminated metallized film from CP Converters provides oxygen barrier--as well as an unexpected marketing advantage.

The company started using a matte finish on the outside of the bag because the film ran better on its older-model packaging machine but then realized how good it looked on the shelf next to the sea of shining bags. "We like our matte finish," Cohen says. "It's a little bit more expensive than regular film but it has a nice feel to it."

GROW SLOW ...

Being a small, privately-held company gives Cohen the freedom to choose quality over profits--like spending more for sunflower oil and packaging materials. "I don't chase dollar signs," she says. "I want to get bigger but in a controlled way."

Growing slowly is a lifestyle decision that lets her and her staff enjoy life and work. "We don't have that much debt. We don't have to compromise with venture capitalists," she says. "That's part of the quality that I want to maintain ... to work in a sane atmosphere and make a good product."

One advantage of being small is that the company can experiment with new flavors without affecting its core business too much. Route 11 introduces one or two new products a year--"customers expect it," says Cohen. This year's debut was Mama Zuma's Revenge (see photo on opposite page), a spicy chip that's seen some pretty hot sales already. Cohen attributes much of the new product's success to its creative and fun graphics.

... BUT GROW!

The company's reward for its continued success is finally being able to afford to upgrade its packaging equipment.

Since its start-up in 1992, Route 11 has been using a vertical form-fillseal machine that was built back in the 1960's. While it was financially necessary for the company to buy used equipment in the beginning, it's been a challenge to keep the 30-year-old-plus system running efficiently.

Cohen explains that the machine is "happiest" when running at just 40 bags a minute. And when the machine is happy, moral is good throughout the plant. But when it's not happy, well ...

"To continue growing as a company, it was essential to do something about this," Cohen explains. "For us, speed really isn't the issue. Efficiency and weight control are the things we have the hardest time with right now. We're wasting a lot of packaging and product."

So, during its slow time in February 2002, the company will upgrade to a new Hayssen Ultima bagger, custom equipped with gas flushing, and fed by Yamato combination scales. Prior to the switch, they'll build product inventory to cover the downtime for installation and set-up, which is expected to be completed within five days.

Although the rest of the packaging operation relies heavily on manual labor, Cohen says they'll wait until this project is complete before automating any other packaging tasks.

TELE-MARKETING

Marketing for Route 11's specialty chips is understated at best. Cohen says, "People ask me what I do for marketing and I tell them I answer the phone."

With no advertising budget, Cohen lets the packaging and the product quality do the selling. "We don't spend any money on marketing, so the bags have to market themselves," she says. "We have a relatively simple design that stands out on the shelf."

The company also exhibits at the Fancy Food show. From there, the premium chips have gained national attention on The Today Show and CBS Morning News. The company has also been profiled on the cable station The Food Network.

The word-of-mouth method still works well, too. "People are looking for new and interesting things to eat and the packaging is fun," Cohen says. "Some of our flavors are unusual. When you have a quality product, all this attention just snowballs."

Stats--at a glance

Company: Route 11 Potato Chips

Annual Sales: About $2 million in 2001

Plant size: 7,200 square feet

Operation: One shift, six days a week

Output: 500 cases per day

Employees: 17 full-time workers; five additional part-timers during peak periods