Inside the Fage USA yogurt factory, the sweet smell of fermenting milk permeates the air and the hearts of its employees.
“For me, it is a natural. It smells good,” said plant manager and vice president of manufacturing Ioannis Ravanis, who speaks with a Greek accent almost as thick as the company’s yogurt.
The Fage USA Corp. plant in the Johnstown Industrial Park began yogurt production in April. The 113,000-square-foot facility is the newest and most state-of-art owned by the subsidiary’s Greek parent company, Fage SA, which has been in business since 1926.
Company officials said the Johnstown operation has the capacity to consume 60 million liters of milk a year and from it produce 50,000 tons of yogurt, enough to service Fage’s entire U.S. market. How much it actually does produce is trade information the company doesn’t disclose, but the plant now employs 110 people, up from original employment projections of 60 to 80.
The company estimates the total U.S. yogurt market to be a little over $3 billion annually, with Fage enjoying about a 1.5 percent market share. The company’s thick yogurt line is marketed as a premium product produced using proprietary straining and fermentation techniques. The company foresees growth despite the U.S. recession.
“We are working according to our budget. We are within our budget. We are hoping the recession will not affect our business because our business is growing and this is only the beginning,” Fage USA Dairy Industry Inc. President and CEO Ioannis Papageorgiou said.
Although the company has increased employment at a brisk pace since completing the $85 million Johnstown plant, its operations are almost entirely automated. From the time the milk arrives in 64,000- to 67,000-pound tankerloads to when pallets of the finished yogurt leave the loading docks, human exposure to the product is as limited as possible. Workers and visitors must wear gowns, hair nets and, if necessary, beard nets to eliminate contamination.
In the initial stages of the yogurt production, it is difficult to spot a human hand in the complex process.
“You see only this guy, and nobody else,” Ravanis said, pointing out a gowned worker walking through the hallway. “The plant is fully automated. The people in the control room click, click, click, click, click, click — all day.”
To start the process, skim milk is unloaded from tanker trucks into a vast system of stainless steel pipes according to computer commands from the company’s control room, but that’s only if samples of the tanker’s milk first pass a rigorous laboratory examination. Lab workers check milk for fat content, bacteria and other criteria.
“We can reject this tanker if we want. If it is out of our standards, we may reject it,” Ravanis said.
Papageorgiou said Fage does not purchase milk produced from cows that are on antibiotics or have received recombinant bovine growth hormone to increase their productivity. He said the company has determined its customers value Fage yogurt for its 100 percent natural production standards more so than any other factor, even taste.
“Since we are producing an all-natural product we pay a premium for that. We get milk that comes from farmers who are not using hormones,” he said. “The reason we are so strict with the health and quality issues is when we are producing an all-natural product there are no preservatives, there are no additives, nothing we add into the product to keep it healthy. This is why we have spent all this money and why we are very strict with the health.”
Town of Perth Supervisor Greg Fagan, a dairy farmer with 110 cows, said his cows use RBGH and he’s not ashamed of it, but he’d drop the practice if he could do business with Fage USA. He said his eight-member farmers’ cooperative, the Mohawk Valley Producers, sells most of its milk downstate.
“I’d very much like to be selling to them now because they are so close,” Fagan said. “Right now, we’re trucking it to Jamaica [a neighborhood in New York City]. We have to pay to get it to market.”
Papageorgiou said most of the plant’s milk supply comes from the local area, but the company is not certain where.
“We don’t know exactly because we don’t control the farmers directly. We buy from cooperatives, but we know that they buy the milk from the local farmers. This county or other counties, I cannot say,” he said.
Fagan said he’s certain some local farmers are benefitting from Fage’s presence.
“You could probably almost throw a rock from some of our farms and hit the plant,” Fagan said.
If anyone ever did throw a rock at the plant, they would likely be caught by one of the facility’s 40 security cameras. Fage USA has a tight security system, with vestibule areas for truckers and security lock doors through every level of the company’s process.
“It’s not a matter of safety, it’s a matter of security for the product,” Papageorgiou said.
And security for the company’s secret fermentation process. Fage multiplies its own yogurt cultures at the plant. After the milk is pumped into the four 26,000-gallon silos, located inside the facility to keep the product warm, the company ferments the milk for an undisclosed amount of time. (The company says milk takes two days to go from tanker truck to yogurt cup, but keeps certain details of the process confidential.)
“Our main process is the fermentation. So what we are doing is we pasteurize our skim milk, we put it into huge tanks, we inject culture. We ferment the yogurt for many hours, we normally do that the previous day because the fermentation time exceeds a lot of time,” Ravanis said. “The next day we pump the fermented yogurt to our filling machines through a straining process because we strain it. We need 4 pounds of skim milk to produce 1 pound of plain yogurt without cream.”
Then the company mixes some of its yogurts with cream to produce its 2 percent, 5 percent and 10 percent fat yogurt blends. Company officials said its 0 percent fat yogurt is its highest-selling product.
Fage also produces “split cap” yogurt products, with yogurt of varying fat content in one cup and fruit or honey in a smaller cup attached to the larger cup. Papageorgiou said the inclusion of the fruit or honey changes consumer mind-set about yogurt and can lead them to view the product as a tasty dessert and not just a health food. Fage sticks to its plain yogurt roots by keeping the foods separate.
“We advise the consumer don’t stir it, because [the yogurt] loses its flavor,” Papageorgiou said, illustrating the preferred technique of pouring the added fruit or honey on top of the yogurt.
Packaging is the most labor-intensive part of the process. Finished yogurt and in some cases fruit and honey is loaded into packaging materials that are imported from Greece, then processed through three conveyor belts which put in place lids and labeling for the products. Workers operate the equipment, inputting data on what specific Fage product is running through the conveyor belt, and feeding the packaging materials into the unit.
“Somebody has to provide the packaging material into the machines. It’s the only way to do it,” Papageorgiou said.
But after that, it’s almost all robots. Fage deploys an intricate web of red and yellow sensors that analyze the yogurt containers to make certain lids have been applied properly and enough yogurt is in every container. The company also uses an X-ray machine to make certain foreign objects haven’t gotten into the food. The packaged yogurt, still 106 degrees at this point, is then run through a cooling chamber, which slowly lowers the temperature.
“We have to pull it down to 36 to 38 degrees. So this cooling tunnel slowly, gradually, cools down the product,” Ravanis said.
Once cooled, robotic cranes load the yogurt onto pallets and carry them onto robot “satellites” that carry the products on what seem like small stretches of train tracks, until other robotic cranes lift them and store them in the company’s warehouse area, which boasts a 1,600-pallet storage capacity.
Getting the products onto distribution trucks is also largely automated, although humans still pick the pallets and place them onto trucks. From a control room, one employee runs the company’s Automated Storage Retrieval System.
“The system organizes the racks in such a way that when you say ‘I need two pallets of that material, or that product,’ this system [finds it]. It follows the first in, first out rule,” Ravanis said. “[The operator] tells the machine which orders to be filled, the machine automatically selects the pallet, or if you need a half full pallet, [workers] go in and pick the pallet and tell the system which pallets they have picked, and prepare the pallet for uploading.”
Fage uses a bar code system to tell its computers the expiration dates of its product, the number of cups per yogurt case and how many cases per pallet.
Papageorgiou said the company’s production process is exactly the same in Greece but because the Johnstown facility is its newest, the plant has the newest technology available.
“We’re proud of that,” he said. “We started importing the product from Europe, Greece in 1998. When we saw the growing demand we could not anymore ship the yogurt and bring it from the other side of the world. This plant is made to serve the U.S. market, nothing else.”
But if Fage’s yogurt continues to gain market share in the United States, the company has not ruled out building more plants. It already plans to expand in Johnstown, adding more milk silo capacity.
“If demand is growing, why not?” Papageorgiou said.
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