Vertical integration 'gives us a competitive advantage'
By CAROL RYAN DUMAS
JEROME, Idaho -- A fledgling company here is making a big splash producing milk protein products and cream for customers around the globe in a state-of-the-art facility.
Conceived in 2009, Idaho Milk Products focuses on fresh, high-quality products and was born of a vision by three of the largest, independently owned and operated dairies in the United States: Aardema, Bettencourt and Big Sky dairies.
The dairy owners wanted to diversify and add value to their milk, said Ron Aardema, a co-owner and president of Idaho Milk Products.
The dairymen looked at the options, including cheese processing, but decided making milk protein products was the best direction and focused on milk protein concentrate, he said.
The owners' vision to take their own milk and process it into higher value products plays into one of the company's greatest strengths -- vertical integration, said Kent Giddings, Idaho Milk Products' general manager and a chemical engineer with more than 30 years of experience in the food ingredient business.
"It gives us a competitive advantage," he said.
The company sources 3 million pounds of milk a day from its owners' 12 dairies located within 45 minutes of the production facility, he said.
"We can get milk production through this plant in 24 hours. I don't know of anybody who can do that," he said.
From the inception, the owners' focus has been on the freshness and consistency of its products. The company accomplishes that with a ready, dedicated supply and by focusing on a limited product line and using a world-class processing system, he said.
Its main products and highest value products are milk protein concentrate and milk protein isolate made from milk protein, which is mechanically separated from raw milk using membrane technology. It also produces milk permeate powder and cream, sold under the IdaPro Cream label.
"Our complete focus is on these products," Giddings said.
That's another strength of the company. Most other processors produce those products as a balancing function to their primary production, such as the making cheese. Idaho Milk Products is by far the world's largest dedicated milk protein plant, he said.
"For a company that's only 4 years old, we feel pretty proud we have the systems in place to compete in a global marketplace," he said.
The company has 80 customers in the U.S., Canada, Europe, Asia and South America, he said.
The company's products are used as ingredients in other dairy products and desserts and products aimed at weight management and nutrition.
Its wholesale ingredients are kosher, halal and European Union certified and are used by well-known consumer products companies. The Grade A plant was designed and is Safe Quality Food 2000 Level 3 certified, recognized by retailers and foodservice providers around the world that require a rigorous, credible food safety management system. The plant, which operates 18 hours a day, is routinely inspected by USDA and audited by Idaho Milk Products' customers, he said.
Before any product leaves the plant, it is tested at the plant's quality assurance lab for microbiological, chemical and sensory and functional characteristics, he said.
The concept of fractionalizing milk into its components is fairly simple, but it takes a lot of engineering and science, he said.
The owners worked with leading designers and builders of processing plants and top equipment suppliers, which they say not only led to world-class products but an environmentally sustainable operation. Carbon dioxide emissions from the plant are significantly less than the national average for processing plants, and the 2.5 million gallons of water separated in processing is recycled to clean the plant daily. The owners also worked with Idaho Power on efficient energy usage throughout the plant, he said.
"I think we have an awesome team here of workers and owners and this new plant. It's a wonderful effort by a bunch of people working really hard," he said.
The company has grown steadily over the three years the plant has been in operation, expanding its customer base and marketing, Aardema said.
The plant is at capacity for what it's producing now, but the owners could run more milk through the plant and produce different dairy products if the opportunity arises, he said.
Idaho Milk Products
Business: Milk processing
Location: Jerome, Idaho
Owners: Aardema, Bettencourt and Big Sky dairies
President: Ron Aardema
Raw milk: 1.1 billion pounds annually
Annual production: 40 million pounds of milk protein concentrate and milk protein isolate, 54 million pounds of milk permeate powder, 94 million pounds of cream
Facility: 170,000 square feet on 14 acres