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Hot, hot, hot - Silver Spring Foods heats up the mustard and horseradish industry with its own recipe for success

November 23, 2011

The phrase “some like it hot” means different things to different people. ‚Ä®For some, it calls to mind an old movie starring Marilyn Monroe; for others, the popular Robert Palmer song. But in Eau Claire, the first thing that pops into one’s head is horseradish.

Here in the heart of west-central Wisconsin lies Silver Spring Foods, the world’s largest grower and processor of horseradish, and one of the nation’s fastest-growing specialty mustard brands. This 82-year-old company’s products are hot, hot, hot and taking the mustard and horseradish community by storm.

In the 2010 Napa Valley Mustard Festival’s World-Wide Mustard Competition, Silver Spring took top honors. The company earned a Grand Champion title for its popular Deli Style Mustard, while its Picante Pepper Mustard took home a bronze in the Pepper Hot category. Additionally, its Beer ‘n Brat Horseradish Mustard nabbed a bronze in the Horseradish/Wasabi category, and its Organic Deli Mustard won the silver in the Organic category.
Revenue at this thriving family business, which employs more than 165 people, will hit $50 million this year, up over $10 million from 2009. Business is good, and Mike Walsh, president of Silver Spring Foods, says the company has gone the distance with a family-oriented operation that puts employees first.

“We feel very strongly if we take care of our employees, our employees will take care of our customers, and our customers will take care of us,” says Eric Rygg, who owns the company along with his mother, Nancy Bartusch, and brother, Ryan Rygg.

No Stranger to Adversity
Ellis Huntsinger founded Silver Spring in 1929 when he began growing horseradish on farmland south of Eau Claire. He prepared and bottled products by hand and sold them to augment his income during the winter. But when he discovered that adding sweet dairy cream to ground horseradish mixed with vinegar enhanced its flavor, heat and longevity, he expanded sales to markets throughout the United States.

Fast-forward to the successful company Silver Spring is today, and it’s hard to imagine it ever suffered any woes. But hardship hasn’t been a stranger to its four generations of family owners.

In 1972, President Edwin Bartusch and his wife, Betty, died in a plane crash. Barbara, the younger of their two daughters, and her husband also perished in the crash, leaving the couple’s 22-year-old daughter Nancy to run the company. “She was faced with the decision to sell the company, run the company herself or bring in outside help to do it,” Rygg says. “She did a combination of the two. She finished her MBA at Stanford and brought in some talented management to help her through.”

Nancy enlisted the help of family friend Bill Nelson Sr., who resigned from Kraft Foods to run the company. His son Bill Nelson Jr. took over a few years later and ran the company for 25 years.

Ten years ago, Silver Spring Foods suffered another setback when a major customer decided to move a large piece of business to a manufacturing site outside the country. The company responded by diversifying its product mix and jumping into the private-label business. In 2006, the company opened a state-of-the-art manufacturing facility. The new facility’s high-tech capabilities and automation enabled Silver Spring to add product lines, including organic products and sauces.

Taking Care of Your Own
Once on board, Walsh encountered what he calls a “good base of employees” but stilted communication and cooperation. He says the changes he instituted were “minor,” but he built communication lines, fostered teamwork and focused on employee well-being.

He first addressed the employee health benefit plan for lower-level employees after learning these workers were not taking advantage of company-sponsored health insurance. “They couldn’t afford it,” he says. “I worked with human resources to significantly supplement health insurance costs for these employees.”

He added company-sponsored health programs, including annual biometrics screenings, wellness challenges and reimbursement for prescription safety glasses, as well as two additional hours of paid time off for preventative health care appointments.

“If you have a safe environment and a quality product, profits will follow. Safety plus quality equals profitability,” says Shawn Kapanke, Silver Spring’s vice president of manufacturing operations.

The company also instituted safety rewards that have altered employee mindsets and put safety top of mind. Safety is addressed at all meetings. Kapanke says employees now vigilantly watch for safety issues and work hard to prevent accidents. “We are now 600 days without lost time due to work injury,” says Walsh.

Smooth Operations
Safe, productive employees and a quality product also arise from well-run operations from the farm to the manufacturing plant.

Ken Traaseth, vice president of agricultural operations at Huntsinger Farms, says the company harvests 300 acres of horseradish annually at its Minnesota farm for a yield of approximately 4 million pounds, and 400 acres of horseradish in the Eau Claire area for a similar yield.

The farming operation uses a seven-year crop rotation; horseradish is grown once every seven years on the same plot of ground to ensure crops remain disease-free. In between, the land produces crops of field corn, soybeans and snap beans.

Crews harvest horseradish in the spring and fall after plants have been in the ground about 12 months. Then they are brought to a sorting facility, where employees remove foreign material and take seed stock for future plantings. Roots designated for processing run through a water rinse cycle and are stored in coolers at 35 degrees Fahrenheit until needed by the manufacturing plant.

Product ships to the manufacturing plant weekly on an as-needed basis. “Generally, we get an order for 120,000 to 150,000 pounds a week,” Traaseth says. “But during our busy time of year (the fall), we may ship up to 200,000 pounds a week.”

Once at the plant, crews inspect roots for blemishes, which are cut out by hand, then rinse, weigh and place the roots in a cooler until processing. Horseradish must be kept cool.

“We like to say we need to keep it cold to keep it hot,” says Kapanke. “Once we grind the root, we need to add the additional ingredients, such as vinegar, soybean oil, salt, and more, and get it to bottling as fast as we can.”

To be successful in today’s highly competitive food industry, it is critical that food manufacturers are capable of assuring current and potential customers of their commitment to food safety and quality.  Silver Spring Foods has made the commitment to achieve accreditation through the internationally recognized Global Food Safety Initiative Standards (GSFI).  The GSFI accreditation process requires verifiable total management commitment of resources and personnel necessary to meet the intent of the GSFI standards.  Silver Spring Foods will be audited against the British Retail Consortium (BRC) standards in February 2012. “A lot of big companies are requiring BRC. It’s not ‘if’ you are BRC-certified, it’s you will be BRC-certified,” Kapanke says.

Pushing Private Labeling
“We’ve made significant investments in our employees and manufacturing plant to increase our production capabilities,” says Eric Rygg, who currently serves as president of the company’s Kelchner Horseradish Products division in Philadelphia.

Private labeling presents a tremendous opportunity to take advantage of this increased capacity, he adds.

Half the company’s sales currently come from the Silver Spring Foods and Kelchner brands, but the other half comes from private-label products for major food companies across the United States. But Rygg says he expects the private-label side to increase in the future.

“We have seen some manufacturers refuse to do private labeling, and we think that’s a mistake,” says Rygg. “Retailers and consumers are looking for private-label brands, because there is value in them in this economy.”

Educate the Consumer
The final piece in the company’s strategy to position itself for future growth is education. Horseradish is an acquired taste and often people don’t know quite how to use it, Walsh explains.

“But horseradish is not like wine; it doesn’t get better with age. The day we make it, it is the hottest and most flavorful it will be,” Rygg says, noting the challenge is more than getting it to market and into people’s homes quickly. It lies in teaching people how the products can be used.

Silver Spring Foods entered the social media space, using entities like Facebook and YouTube to present this message. The company puts recipes on Facebook and recently began posting videos of chefs using its products on YouTube.

The company is in the process of moving to shrink-wrap labels on its products in the near future. These labels will cover the entire bottle, providing enough room on the label to add serving suggestions, promote the company mission, highlight other Silver Spring products of interest, and list the company’s Facebook and web addresses.

Walsh predicts these efforts will produce positive results over time. “It’s going to be a gradual increase that will help us expand our markets without spending millions of dollars on an advertising program,” he says.

With all this in place, it may not be long before horseradish and mustard are the first things that pop into everyone’s minds when they hear the phrase “some like it hot.” 

Liven up your food with horseradish and mustard
“We are in the condiments business; our job is to make food more flavorful,” says Eric Rygg, an owner of Silver Spring Foods. He offers up a few of his favorite uses for some Silver Spring Foods’ products.

-Use horseradish and mustard to liven up traditional vinegar and oil salad dressings.
-Mix horseradish or mustard with mashed potatoes to add a little extra flavor.
-Put horseradish in deviled eggs to spice them up.
-Mix horseradish with applesauce and spread it over a pork chop.
-Add fresh horseradish to cranberry sauce to liven up this traditional holiday side dish.