This article was published in the May 2023 issue of Pet Food Processing. Read it and other articles from this issue in our May digital edition.
After more than doubling production capacity in the span of three years, Phelps Pet Products made a sizable investment in the company’s future. In order to fulfill customer demand for its products, the Rockford, Ill.-based manufacturer of jerky-style pet treats invested more than $20 million in a new processing plant and distribution center in Janesville, Wis., just 30 miles away.
The new facility will increase Phelps’ warehouse space for ingredients and finished products, processing and preparation, and packaging operations.
“The $20 million-plus investment in our new Janesville facility was primarily made to provide our customers with additional premium quality, reliable and ‘Made in the USA’ capacity after more than doubling our business over the past three years,” said Rick Ruffolo, president and chief executive officer.
“The $20 million-plus investment in our new Janesville facility was primarily made to provide our customers with additional premium quality, reliable and ‘Made in the USA’ capacity after more than doubling our business over the past three years,” said Rick Ruffolo, president and chief executive officer of Phelps. “Fortunately, we also were able to use this investment to bring in equipment to expand our capabilities by offering customers higher meat content recipes, air-dried processes and custom-shaped treats.”
Founded in 1966, Phelps manufactures specialty pet treats, jerky sticks, strips and tenders sold under private label and contract manufacturing agreements to retailers and pet food brands in North America, the European Union, Asia and Australia. The company boasts its clean-label, organic and sustainable certifications as well as its unique pet treat offerings including plant-based meatless jerky.
“We have made a series of strategic investments in people, production processes and product development since 2018 to transform Phelps from being primarily a ‘national brand equivalent’ private label provider to becoming the innovation leader in custom meaty dog treat contract manufacturing,” Ruffolo said. “Our certifications, capabilities and cross-channel expertise are second-to-none in the category, and we have been able to grow the business with like-minded, innovative retailers and national brands focused on clean-label, premium quality and trend-right recipes.”
Its 80,000-square-foot Rockford facility features two buildings, two processing lines, five packaging lines and nine smokehouse ovens. Processing takes up 30,000 square feet of the plant, while packaging and warehouse space each span 20,000 square feet. The remaining 10,000 square feet is used for office space.
The new Janesville addition, which started production this January, is more than twice the size of Rockford, at 178,000 square feet. Currently, the facility features 40,000 square feet of processing, 20,000 square feet of packaging, 40,000 square feet of freezer storage, 30,000 square feet of warehouse, 40,000 square feet of distribution and 8,000 square feet of office space. The plant currently houses one processing line, two packaging lines and 14 smokehouse ovens.
Timing is everything
Even though official plans were yet to be made to expand production capacity at Phelps, by 2021, the company began studying the possibility. This meant considering all the options — building a new facility, further expanding the existing plant, or another option that management had yet to think of. It was around the same time that Simmons Pet Food announced it would be closing down its Siloam Springs, Ark., pet treat facility in September 2021. This was the opportunity Phelps was waiting for.
“We had every intention of expanding capacity, and when Simmons announced plans to close down their pet treat facility in September 2021, the timing could not have been better for either of us,” Ruffolo said.
Phelps immediately made plans to acquire Simmons’ full fleet of treat manufacturing equipment and started its expansion soon after.
“We have made a series of strategic investments in people, production processes and product development since 2018 to transform Phelps from being primarily a ‘national brand equivalent’ private label provider to becoming the innovation leader in custom meaty dog treat contract manufacturing,” said Rick Ruffolo, president and chief executive officer.
“Simmons was able to quickly secure a buyer in Phelps, who saw real value in their 9-year-old equipment, and Phelps was able to shorten our expansion lead time by at least 18 to 24 months with proven equipment,” Ruffolo added. “The Simmons team has been extremely collegial and collaborative throughout the transition, and both parties expanded our respective industry network through these positive relationships.”
During the time of the equipment purchase, Scott Salmon, president of Simmons Pet Food said, “We are a company of pet lovers, and as we move full speed ahead growing the capacity of our core pet food business as announced in 2021, we are pleased to know that Phelps Pet Products will put this equipment to good use to expand their pet treats capabilities. We are excited about their potential as the industry continues to experience unprecedented growth.”
Beyond the building
When expansion plans began, Phelps started its search for a location to house its newest facility. The wish list included proximity to the Rockford headquarters as well as enough room to handle anticipated future growth capacity. Building from the ground up would take extra time, so Phelps considered finding an existing structure to occupy instead. The company found what it was looking for in Janesville, Wis.
“We were fortunate to find a building in close proximity (about a 30-minute drive) to our existing Rockford campus,” Ruffolo said. “We partnered with one of the most reputable landlords and general contractors in the area to build out an existing four-wall facility. This enabled us to fully customize the flooring, drain system and underground piping before it was constructed. This also gave us the opportunity to create the equipment/process flow from start-to-finish as if on a blank sheet of paper.”
Designing the production flow from scratch without having to construct the building from the ground up allowed the company to get the best of both worlds — a custom-built processing operation without the time commitment and hassles of new construction. It also allowed Phelps to incorporate extra space for future capacity.
“We intentionally made it bigger than we needed,” Ruffolo added.
The design layout was created with the intention of having ingredients and raw materials enter from one side of the building, then have product flow through the plant in a linear fashion as it goes through each stage of production. After raw materials are converted to finished goods and are packaged, those products will eventually exit out the other side of the building. This linear design is critical for food safety, Ruffolo explained.
In an effort to anticipate future needs at the plant, special flooring was installed at one end of the building to accommodate additional freezers if necessary. The plant currently has two freezers and one cooling unit at the receiving end of the plant.
Another important component of the Janesville operation is the warehouse storage and distribution center. Once a day, product from the Rockford facility is delivered to the Wisconsin plant for further distribution. With the addition of 70,000 square feet of warehouse and distribution space, Phelps is enhancing its capability to produce and distribute even more products to its growing customer base.
Janesville features many of the same processing and packaging equipment as the Rockford plant with the addition of 14 pass-through Marlen ovens acquired from Simmons. The pass-through design allows for easy cross contamination control. The ovens also feature individual computerized control systems for each unit, an attribute the ovens in Rockford don’t have. The computerized controls provide detailed information on each batch being cooked in the oven — including the recipe, cooking time, as well as which operators are working on each batch. This information is a valuable tool for product traceability.
When operations began in January, six ovens were up and running. Ruffolo anticipates all 14 ovens will be operational by the end of Q3 2023. The ovens offer a diverse range of cooking processing programs and parameters to bake the brand’s jerky sticks, strips and bars, as well as the company’s new offerings of shaped treats.
“The main points of differentiation between our existing Rockford operations and the new Janesville facility are the ability to provide higher content meat recipes (>95% protein), options for air-dried processes, and over a dozen new jerky treat shapes — with more on the way,” Ruffolo said.
The addition of a Marel revo portioner featuring shape drums provides the Janesville facility with the tools to create pet treats in shapes including chicken tenders, bacon strips, cookies and waffles.
“We had many customers ask us for ‘shaped’ treats over the years, and these customers got in line early, as they were quite excited to learn of our new capabilities,” Ruffolo said. “In fact, we already have had the chance to begin production for several of these customers since opening the Janesville facility in January.”
The extra capacity in Janesville has already allowed Phelps to take on new customers.
“We’ve been able to attract new customers who have been looking for a premium quality, US contract manufacturing partner with shape capabilities,” he added. “It already has been a real boost to our business, and our customers are pleased with the production to date.”
The new, shaped products are being added to Phelps’ existing catalog of offerings available to its private-label and contract manufacturing customers. But Ruffolo is quick to point out that there are no limits to the products Phelps is willing to create for its customers.
“We will customize any recipe to meet the unique needs of our customers,” he said.
Phelps is proud to offer premium quality pet treats that fulfill the needs of each and every customer it works with.
“Sometimes ‘premium quality’ is code for ‘high price,’ but in our case, it simply means ensuring the product experience meets or exceeds our customer expectations — at whatever price point they are targeting,” Ruffolo said. “We are not a ‘cookie-cutter, buy from a catalog’ type manufacturer. In fact, you may be surprised to learn that every one of our more than 300 products/recipes has been tweaked or fully customized to meet specific customer objectives.
“We are unique in bringing this level of customization to the category, and that is due to our investment in product development — including fully functioning ‘mini-kitchen’ pilot plant versions of both the Rockford and Janesville production processes — which enable us to provide ‘rapid prototype’ sampling to help expedite and support our customer innovation.”
Phelps has an innovation/R&D team that supports product development at all the company’s facilities.
“While Chris Evans leads our NPD efforts as our director of innovation, we take the approach at Phelps that it is everybody’s responsibility to innovate and ensure the best quality products every day,” Ruffolo added. “Additionally, we take the approach of being an extension of the R&D teams of our customers — so, our actual innovation efforts are amplified and have an even greater impact when coupled with the strengths of each of our customer teams.”
Expanded production capabilities and new processing equipment may be allowing Phelps to grow its business, but Ruffolo says that it’s the company’s investment in its people that has provided Phelps with the necessary ingredients for success.
“We had a strong core team here when I arrived in 2018, and we have been fortunate to retain these experienced professionals,” Ruffolo said. “We also were able to build on that foundation with the addition of experts in human food product development, quality, meat processing, production, engineering, accounting and customer business development. Under the leadership of Tedd Ellis, our long-time VP of sales and marketing, we have more than quadrupled the number of customer-facing members of our organization, and this focus enables us to ensure we build strong internal and external relationships and have regular open communication with each of our key customers. We also have expanded and deepened our vendor partner relationships, which has been key to supporting our rapid sales growth.”
One addition to the Phelps leadership team was Chuck Bridges, who was named vice president of manufacturing, supply chain and logistics in July 2022. Bridges brought experience in operations and supply chain management from various industries and a skillset Ruffolo said was essential to commissioning the new facility.
So far, Phelps has added approximately 30 new employees at the Janesville facility, in addition to some internal transfers and promotions from the Rockford facilities. Transferring employees from the Illinois campus has allowed the new plant to benefit from the institutional expertise already present in the company’s operations.
With production output at the Janesville plant increasing and operations ramping up, Ruffolo expects staffing to continue to rise.
“We are increasing output each month,” Ruffolo said. “The Janesville facility already has expanded our 2022 capacity in Rockford by more than 50%.”
As the pet food industry boom continues and the pet treat segment expands along with it, the 178,000-square-foot Wisconsin operation has ample room to grow from a personnel, production and distribution perspective. But according to Ruffolo, the company is taking its growth in stride by building its business one customer and one new product at a time.
Under the Phelps umbrella
While most of the products produced at the Phelps’ facilities are made under private label and contract manufacturing agreements, the company does produce three exclusive Phelps Pet Products brands — Phelps Wellness Collection, Callie’s Kitchen and Table Scraps® Disney® treats.
The company introduced its Phelps Wellness Collection in 2020 in response to customer demand for more pet products that mirrored the health and wellness trends pet owners were following.
Each recipe features natural ingredients to help provide a functional benefit. The treats include Keep Calm with calming functionality; Fur Real for skin and coat health; Hip Hip Hooray for hip and joint health; Squirrel! promotes cognitive and brain health; Gut Check features digestive pre-and probiotics; and Tummy Tamers was designed to help with upset stomachs.
“These treats taste great and are a more palatable and enjoyable way to provide your dog with supplemental benefits — without the ‘creative subterfuge’ of getting your dog to swallow a pill each day,” Ruffolo said.
Phelps first launched its Table Scraps line in July 2021 as a result of a licensing agreement with The Walt Disney Company. Each product features characters from widely known Disney and Pixar movies. The jerky-style dog and cat treats are formulated with clean-label ingredients, as well as upcycled ingredients through Phelps’ partnership with the Upcycled Food Association.
Callie’s Kitchen Simply Healthy Dog Treats are made with “kitchen” ingredients and are free from artificial flavors, colors or preservatives. The line marked Phelps’ first foray into meatless treats, a capability it’s now able to offer its private label and co-man partners.
“Since we don’t share our customer list or product recipes among different customers, these three Phelps brands serve as a great springboard for innovation while also being a profitable source of revenue across several retail channels, including Chewy,” Ruffolo said. “That said, we remain committed to our DNA and invest almost 100% of our efforts to being the best contract manufacturing/private label partner in the industry.”
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