News Agribiz Peak Delivery: Ice Mountain bottling operation continues growth in West Michigan
Peak Delivery: Ice Mountain bottling operation continues growth in West Michigan
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By Joe Boomgaard | FoodBiz
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Ice Mountain’s Steve LaBarge, left, and Shawn Robertson, right, say in the few years since the company opened the plant, it has made many efficiency upgrades to help reduce its footprint, as well as reduce the materials used in packaging. PHOTO: JOE BOOMGAARD |
STANWOOD — When the weather heats up and the humidity rises during Midwest summers, so does the activity level at water bottler Ice Mountain, a division of Nestle Waters North America Inc.
“We run 365 days a year and our lines are running all year long, but it peaks in the summer. In the last three weeks, with all the 90-plus degree weather, business has boomed,” Steve LaBarge, safety and environmental manager at Ice Mountain, told FoodBiz during an exclusive interview and plant tour in mid-July. “Literally, everything’s running full out. We’re shipping as much as we can. All of our largest customers are trying to get more water.”
The plant in Stanwood has expanded since 2002 to encompass about 720,000 square feet of manufacturing and warehouse space. The plant employs just under 250 people when adjusted for seasonal differences. Demand for bottled water is cyclical, said Shawn Robertson, technical manager and interim plant manager, noting the plant runs at capacity from April through October.
The plant in Stanwood draws employees from around West Michigan, including from the Grand Rapids area. A few employees even drive more than an hour to work. Robertson said the company’s location in west-central Michigan poses its own set of challenges for recruiting top talent. Moreover, the company is also aggressive in its hiring standards, requiring all employees to go through a rigorous testing and interview process.
Robertson said the draw to work at Ice Mountain is the company’s culture that empowers employees to address problems on their own and be part of a team environment. The company also lures people with the wages it pays. The target is to be in the 75th percentile or above for wages, he said. Typically, Ice Mountain workers are the highest paid workers in the areas in which the company operates, he said. As a result, turnover is very low — about 4 to 5 percent annually.
“We have a workforce that wants to come to work to learn,” LaBarge said. “The mechanics we hire are extremely qualified and broad-based. They can work on anything on that line. We ask for very high-qualified people and in Michigan, we have that. … We’ve been able to get good mechanics here.”
Opening the taps to success
The facility opened in 2004 with about 400,000 square feet of space and three bottling lines, but later expanded to 720,000 square feet in 2004, making way for additional bottling lines in 2005 and 2006. That growth coincided with a national “explosion” in the popularity of bottled water, which was growing at 25 percent through 2007 before the market reached a plateau during the economic downturn in 2008 and 2009.
In 2010, the average American drank about 28.3 gallons of bottled water, according to data from the Beverage Marketing Corp. Consumption increased 3.5 percent last year after two years of recession-based losses.
“It’s not that we lost sales and momentum, but the market matured,” Robertson said. “Now we’re just holding steady.”
The Stanwood plant mostly bottles spring water from two local sources, but it also does some bottling of other Nestle and Gerber products, including purified and flavored water products. The company ran into stiff opposition when it announced plans to withdraw water from an aquifer 12 miles away from the plant in Mecosta County and from the city of Evart — both of which are in the Muskegon River watershed. The lessons learned from the project eventually led to new state legislation governing large-scale water withdrawals, as well as the creation of the Michigan Water Withdrawal Assessment Tool, which was developed with input from the regulatory, business and environmental communities.
Most of the bottled water products are in the form of individual-use containers, although the plant does have a “steady” line of bulk-container water. The plant serves markets across the Midwest from Ohio to the Dakotas, and its largest single market is Chicago, LaBarge said. The company works directly with retailers, which place orders for bottled water and pick up shipments with their own trucks at one of the plant’s 54 truck docks. As much as possible, LaBarge said the operation bottles the water, packages it and puts it directly on a customer’s truck.
Ice Mountain is a vertically integrated company, choosing to outsource very little of the process of bottling water. The company blow-molds its own bottles, labels and packages all of its own products.
“By being vertically integrated, it reduces our cost,” LaBarge said. “The more competitive we can be with our cost per case, the more competitive we can be in the marketplace. Nestle’s delivered cost is among the lowest in the marketplace. … The two weapons we use are our purchasing group — who can apply pressure to the paper and film companies; we tell them we want to reduce our cost and the easiest way is to make it lighter — and our food packaging center for bottled water (which examines) how light we can make a bottle, or can we make it out of a plant-based material, not petroleum, and reduce our cost and footprint.”
Cutting waste at every corner
In all facets of the organization, Ice Mountain places a premium on continuously striving for more efficiencies, whether in the operation itself or in the manufacture of the products.
Partly, those efficiencies are related to better machines. When the plant first opened, the bottling lines could handle about 30,000 bottles per hour, but within four years, the new machines were capable of producing about double that amount. The newest lines can now produce about 61,000 bottles of water per hour. “The technology is amazing,” Robertson said. “And there’s not many people (on the plant floor). Operator intervention was designed out of the process.”
The company also focused on reducing material that went into making the standard plastic bottles. They started with 14.5 grams of plastic per bottle, which are blow-molded in-house at Ice Mountain on each bottling line. They were able to take steps to reduce the plastic used to 11.7 grams. The current bottle uses just 9.1 grams. The effort not only saves weight, but reduces the amount of post-consumer product that needs to be recycled, ideally, or that winds up in a landfill.
“We really pushed the envelope with what the machines are able to do by light-weighting the products,” LaBarge said. “We’re running half the package weight than what (the machine manufacturers) sold it to us for eight years ago.”
He said the lighter bottles pose challenges for packaging them into multi-bottle packs and stacking them on pallets, but each rib in the bottle is designed to provide vertical strength and to withstand the force of being stacked. The lighter bottles are also more difficult to handle throughout the process — particularly when they’re on conveyors, LaBarge said.
The bottles are made with a PET resin, although the company is prototyping non-petroleum-based materials, including some plant-derived products. It’s also experimenting in-house with post-consumer recycled resins.
Continuing with the “less is more” theme, the company made the bottle caps smaller and without any dyes while at the same time reducing the width of the paper label it put on each bottle.
“The challenge is … to light-weight the bottles and maintain the integrity of the product,” Robertson said. “We’re at an impasse now because we’ve taken so much out that we’re asking, ‘What’s next?’ If we take out another half gram, is the product able to get to the consumer and still have the same quality? We’re looking at the edge, but we need to maintain quality.”
Focus on reuse
Ice Mountain also places a major emphasis on recycling in the plant, where the company is constantly reducing the amount of waste it sends to the landfill. Nearly all of its waste is recycled, and whatever remains — mostly food scraps from the cafeteria — is sent through the waste-to-energy facility in Grand Rapids.
In such an energy-intensive plant, the company has focused on efficiencies at every turn. Engineers found ways to cut the amount of air used in the blow-molding process, which reduced energy lost to heat that would have been used in compressing the air. In 2009, it retrofitted 1,600 light fixtures and installed motion sensors in an effort to save about 3.4 million kilowatt-hours annually.
The company also worked with Nestle engineers based in Texas to use waste heat from the blow-molding process to heat the water processing area. When water is brought into the facility, it’s most often cooler than the surrounding air and needs to be heated to ensure quality packaging. If the water is too cool when it’s bottled and the ambient dew point is high, condensation occurs on the outside of the bottles, which can potentially lead to mildew or mold inside the packaging. Therefore, the water must be heated to avoid that issue, LaBarge said.
