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Processing heavies

A look at Pacific Natural Foods and Harry's Fresh Foods

By Andrew Rodman

Behind the bounty of organic processed foods we see are myriad stories. Each product represents challenges met in maintaining organic standards, on top of the standard hurdles of achieving retail shelf space. The din of production plants behind these packaged products is a more appropriate soundtrack than store muzak.

With this in mind, I decided to delve into two of the largest organic foods processors in Oregon, Harry’s Fresh Foods, and Pacific Natural Foods. Both are in the Portland area, and both are extensive in their market reach.

Harry’s Fresh Foods

Harry’s Fresh Foods products are a familiar sight on store shelves. Small batch processing is the hallmark of Harry’s products. Photos courtesy Harry’s Fresh Food

Harry’s Fresh Foods is located in far northeast Portland. With ingredients coming in from around the Northwest, and heat-and-serve meals shipped to Fred Meyers, Albertsons and Costco, Harry’s is a significant player. At 185 plus employees, it’s difficult to imagine this ready-to-eat empire began with clam chowder in the disco era.

In 1977, Rod Harris was home from a stint as a Coast Guard cook, and opened up Harry’s Mustache restaurant with his brother Rick. But the clam chowder base is what really took off, so Harry’s changed course. In 1990, the business matured into Harry’s Fresh Foods. Over time, soups, side dishes, gravies and dessert items were added to the menu. Now Harry’s makes over 140 different products, with soups making up roughly 60 percent of the product line that goes to chain stores, including Fred Meyers and Costco. Rod comments that “Food service begat retail, and retail begat Club.”

Harry’s 80,000 square foot processing plant was dedicated in 2002, and they became Tilth certified two years later. Now over 10 percent of Harry’s product is organic, with projections for 2008 forecasting a 63 percent growth in organic sales. Given Harry’s emphasis on top quality ingredients, going organic was a natural progression. Market trends for organic were encouraging, and the bottom line kept moving up.

Some of the decision to go organic was a result of the struggle Rod’s wife had with cancer. “When you go through that process,” Rod reflected, “you realize how this affects people, everywhere.” Health and food safety became real selling points.

The transition wasn’t exactly smooth. Mary Worth, Harry’s Regulatory Compliance Specialist cites some issues sourcing from the Northwest. Mary noted, “Some organic farmers can’t keep up with the demand, or we come out with a new product, and that crop isn’t in season, and there is nothing available. Then you come up with a different direction and launch a different soup or go elsewhere.”

Fancy footwork also comes into play. “We couldn’t meet the demand for the first product that we launched, the Organic Tomato Gorgonzola for Costco,” Mary recalled, “The projections were half a million pounds in sales volume, and it ended up being double that. Since we couldn’t get enough ingredient, we created an interim recipe which contained gorgonzola cheese, but wasn’t organic. When the supply came around, we switched back to the organic cheese.”

Processors have to balance the higher cost of organic inputs against what the finished product competes with in a high-volume, chain retail environment.

“Today we are waiting on meat products to fall into a better price position, so we can do more ready meals. Right now we are doing more sauces that fall into a 20 to 30 percent price variation of  non-organic products” Rod noted.

Before touring the facility, I had to sterilize my shoes, wash my hands like a surgeon, and don a lab coat with hair net. The prep department is divided into four rooms, with an allergen room, used for isolation to prevent cross-contamination with conventional products.

Before any organic ingredient is brought out, the tools, tables, cutting boards etc. are tested for chemical residue. Organic ingredients are conspicuous in green tubs, or tagged for heightened employees awareness.

Harry’s small batch processing happens in 150-gallon kettles, quite small for industry standards. The small batches enable Harry’s to pour off, cook, chill and pack off the quantities it needs in record time, filling everything from a single serving bowl to 10 pound bags for food service.

In-between batches of conventional  and organic production, the machines are cleaned and flushed with water to ensure non-organic reside is flushed from the equipment. Techs take a sample of wash water, and run that through the control lab for an OK.

The process seems overwhelming, but from an industry perspective it is rather intimate, especially in comparison with what I experienced at my next stop.

Pacific Natural Foods

Southwest of Portland, Pacific Natural Foods runs not just one plant, but a campus of eight production facilities in Tualatin. Their products are immediately recognizable, and seemingly everywhere on store shelves.

Pacific began in 1987, with soy milk as their first non-dairy beverage product. Then came almond, oat and hazelnut milk. Over the years, Pacific started making organic and kosher chicken broth, then developed vegetable and beef broths and soups. There is also a line of certified organic and Fair Trade iced teas. Pacific has been Oregon Tilth certified since 1995.

Outsourcing Manager Michael Freudenthal took me on a tour of Pacific’s buildings, to tour the base mixing, cooling, recycling, printing, filling, and packaging facilities. Inside, forklifts beeped while hair-netted, lab coat attired workers attended to every detail.

Pacific mixes their ingredients in 6,000-gallon tanks. The systems are wildly complex, with “product” moving (primarily contained) from one end of the plant to another. All the while, the food is being cooked, steamed and cooled, all tightly controlled, regulated and quality-tested every step of the way.

His voice rising against the roar of equipment, Michael said, “Consumers tend to look for organic products. Now there is a differentiation. Some of our competitors are producing cheaper. But they are also having problems sourcing the material domestically, let alone locally. “When you talk about true organics, what does the industry support? Is there a stable supply of raw organic inputs? If not, do you start bringing in inputs from China or other areas?”

Pacific Foods sources primarily from the U.S., with as much as possible from the West Coast. Pacific’s founder Chuck Eggert has always been dedicated to organic and local ingredients. That’s why he bought the farm, so to speak, purchasing over 700 acres of organic farmland concentrated in Aurora. Director of Marketing Kevin Tisdale notes, “Back in the late 90s, one of the problems was getting enough supply of raw materials. Chuck started acquiring land in Aurora, and converting it to organic. Not only to supply our own materials, but to start building sustainable farming techniques, so that we can teach each other Oregon farmers organic, and partner with them.

“We don’t source all the ingredients from these farms, they are more of a model.” A working model though. “We are harvesting celery, bell peppers, squash for our butternut squash soups, leeks, onions, tomatoes. We also 500 dairy cows producing organic milk.” Pacific also has about 300-500 organic cattle for beef processing. “We are trying to get more vertically integrated. It’s to take costs out of the supply chain, and bring more organic farming to the Willamette Valley.”

Pacific recently hired a Sustainability Development Manager to help their operation become more environmentally neutral. In-house recycling helps mitigate in-house waste as much as possible, from plastic wrap to fiber.

Pacific also offers okara, (bean solids removed from soy milk) to local farmers, who use it to feed their cattle, thus further closing the loop.

Filling roughly 25,000 cases of product daily, Kevin notes, “I don’t think Chuck would have imagined it would be at this scale 20 years ago, but he has always done it for the right reasons. It’s about building a good model that is sustainable, and being a good steward for the land.

Being from the “smaller is better” camp, I have come to respect Harry’s Fresh Foods and Pacific Natural Foods. These two operations are providing mass organic food for hungry markets of retail and institutional use. In the process they balance quality with quantity in a high-stakes gamble to satisfy a wildly fickle consumer.

In the process they both open up markets for organic farmers, and contribute to the dynamic remodeling of our region into the “Organic West.” The mantra of this market could be summed up by Pacific and  Harry’s ethic of selling food to people who care about where their food comes from.

Clearly, the stakes are high in this new organic foods frontier. The winners and losers can be gauged by those who can make the leap from sourcing and processing to store shelves, and ultimately to our plates.

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