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0308 PD: Davisco Foods invests $40 million in expansion

Loretta Sorensen Published on 04 February 2008

More milk in South Dakota recently spurred award-winning Davisco Foods, an international company that supplies a major portion of Kraft Foods cheese products, to complete a $40 million expansion project at their Lake Norden, South Dakota, cheese plant in anticipation of continued growth in the state’s dairy industry.

The first phase of the project, the construction of a mozzarella cheese plant adjacent to the food ingredient plant, was completed in 2002.

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Jon Davis, chief operations officer and member of the company’s founding Davis family, says South Dakota’s abundance of land and feed has fueled consistent dairy growth in recent years.

“Our plant in Lake Norden is directly in the area where existing dairies are expanding and new dairies are developing,” Jon says. “Producers don’t have to ship feeds in, and there’s plenty of land where the manure from the dairies can be applied. All of those elements make this a good place to milk cows.”

While Davisco’s Lake Norden plant doesn’t find all of its milk – 4.5 million pounds per day – in South Dakota, they expect that to change in the near future.

“About 80 percent of the Lake Norden plant’s milk comes from South Dakota,” Jon says. “We also ship milk in from our Idaho plant. The infrastructure is already in the plant to make it possible for us to handle quite a bit more milk in the future.”

Davisco is one of the larger dairy producers in the U.S., ranking 34th in the nation in dairy product processing. Whey protein is one of Davisco’s major products, and the Lake Norden expansion included the addition of a milk ultra-filtration membrane plant. Peripheral equipment installed included a separator, two pasteurizers and an additional lactose dryer.

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Whey liquid is a byproduct of the cheese-making process. Whey is purified and concentrated to form whey protein that naturally makes up 20 percent of the total protein in milk. Whey proteins, which are quickly and easily digested, can aid in weight loss or muscle gain. Whey proteins easily dissolve in water or other liquids, which makes them convenient to use. Athletes like the high concentrations of branched chain amino acids in whey protein because they are a ready energy source during physical activity.

Between their three plants, Davisco produces 1,000,000 pounds of cheese every day. The company has been the recipient of numerous awards and recognitions: “The Most Innovative Food Ingredient in 2007,” one of three GRAND Pioneer Award Winners and 2006 Exporter of the Year. They have also been recognized by Kraft as one of the food giant’s top seven suppliers.

The new food product Davisco introduced in 2007 was Alpha-lactalbumin, a whey protein-derived ingredient that has been scientifically proven to improve sleep quality, cognitive ability, attenuate physical and mental fatigue, increase disposition and improve mood. It is one of Davisco’s 100 percent “protein with a purpose” products.

Davisco founder, Stan Davis, began his dairy career as an apprentice butter maker in Norseland, Minnesota. He worked in a creamery in Frost, Minnesota, in La Mesa, Texas, and finally in Arlington, Minnesota. He purchased the St. Peter butter business and worked hard to continue to grow different aspects of the business in order to remain competitive.

Stan’s son, Mark, now the company’s chief executive officer, says Kraft Foods played a significant role in making it possible for Stan to continue in the dairy business.

“We probably wouldn’t be in the cheese business if it wasn’t for the help Kraft gave in 1969 to a young butter maker who didn’t know anything about cheese,” Mark says. “I can’t say enough about Kraft, its business standards, quality demands and general ethics. They demand high- quality products from suppliers and are extremely particular about the recipes for their cheese products and various other food products they process and sell.”

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Davisco moved its St. Peter plant to Le Sueur, Minnesota, in 1993 when utility rates forced the company to operate in a more economically feasible business atmosphere. The company’s corporate office is currently in Le Sueur. In addition to the Lake Norden cheese plant, they have a cheese plant in Jerome, Idaho; and Le Sueur. Their food ingredient companies are in Le Sueur and Nicollet, Minnesota.

“The Lake Norden plant was established in South Dakota 30 years ago,” Jon says. “We purchased it 24 years ago. Along with Valley Queen and the state of South Dakota, we’ve recruited dairy farmers in that region over the last six or seven years. We’ve seen a nice amount of growth out of those efforts.”

Davisco expects South Dakota’s favorable dairy climate to continue because land and feed resources will continue to draw dairy producers to the area. Eventually, Jon notes, the company hopes to find all the milk for the Lake Norden plant within the state.

“We were compelled to invest in our factory in Lake Norden,” Jon says. “We’ve been hoping for this growth, anticipating it, and we’ll continue to do what we need to in order to match the pace of the growth.” PD

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