Mixed-But Not Stirred

Mixed-But Not Stirred

By Martin Schultz
Contributing Editor

When it comes to the issue of premixing ingredients, sooner or later food processors have to decide whether or not to outsource. Its a heated cost/benefit issue, no question, claims Reid Wilkerson, president, McClancy Seasoning Co., Fort Mill, SC.

Yet before making this decision, food processors need a thorough understanding of the content and economics of the premix operation. And any discussion of premixes has to start with the premix itself, the type of food processing requiring the premix, and the nature and history of the manufacturer.

Premixes take various forms, but in basic terms generally involve blending ingredients for food formulations. At one end of the scale lies the macro blend, which might include commodities such as sugar, starch, flour or shortening for a premix for the baking industry. The other end of the scale might produce a micro blend of minerals, vitamins and various healthy-for-you components of the kind used in making something like nutrition bars. Whether the blend is destined for foodservice operations, such as schools, prisons and restaurant chains, or for food processing, end users have to consider the convenience, cost and quality issues involved in either preparing their own premixes or contracting an outside manufacturer to do the blending for them.

Processors that prepare their own blends defend the practice by citing history, tradition, economics or control. For example, certain long-standing food producers and restaurants, in many cases family concerns, argue that their reputation for quality is based on having perfected a unique formulation comprised of their own secret blend of spices or herbs, which they are not willing to divulge to outsiders. Other processors contend that the issue is more one of economics: They believe they can make their own blends cheaper than purchasing a finished premix from an outside manufacturer. Just as many others believe it is an issue of control: They like to have their own people managing the process of what goes into their finished product.

Blending basics

On the other side of the equation lie the blending companies, as well as the various specialized seasoning or spice firms, established to prepare premixes on a contractual basis.

Traditionally, food processors have had to buy individual ingredients, scale them one by one, set up inventory operations, quality control, recipes and formulations, notes Sam Wright, CEO and president, The Wright Group, Crowley, LA. Companies like ours arrived to streamline such processes.

Companies that specialize in the ingredient end of the food business offer a host of reasons why food processors should leave the blending of ingredients to them. One justification is that often they themselves have evolved from food processors and know the blending business from both sides.

So it is with McClancy Seasoning, which started out as a sausage-seasoning manufacturer in 1947. Soon, in addition to making standard formulations for sausages, McClancy was creating custom spice blends for competing manufacturers. Some wanted a slightly hotter blend, others a little sweeter, says Wilkerson.

Premix companies cite many reasons why food processors should contract their services. The reasons tend to fall into two distinct groups: cost containment and control issues.

What we can offer manufacturers is lower inventory cost and lower inventory- management cost, Wright says. We can also give him lower production cost, reduced development cost and lower quality-assurance cost, plus a much-lower risk of batch failure.

Batch failure is obviously hugely important in short- or long-run production. It becomes apparent in an analysis of scaling accuracy. Take, for example, the issue of formulation. We believe that every time we make up a blend, it is as accurate the first time as the last, Wilkerson contends. Where a food processor has to take care is in the potential error rate for any given batch. For the sake of argument, lets assume we have to make up a 10,000-lb. blend of 10 items. One scaling error on a 1,000- lb. component of 0.2 lbs. is equal to 0.02%. Whenever weighing repeated small amounts of ingredients, the risk of error is always much higher, say the blending companies.

Wilkerson concludes: This is what we do. We have the experience and the technology to ensure accuracy. If we have a contract to make up a blend, well make enough at one time and bag it into pre-weighed quantities the food processor can specify. Then, all he has to do is take the bag off the shelf and its ready to use.

Another plus is ingredient control. Partly because of commercial responsibility, partly because of new food-security regulations, every blender can document the exact origins of every ingredient, herb, spice and chemical compound in its inventory. If required, the blender can produce a certificate of compliance for each item. We can track down every single supplier, Wilkerson states, and even each lot number. This helps not only to improve oversight of critical control points in the production and delivery process, but could prove essential in the event of a recall.

Consistency is another advantage, with every premixed batch of an order always accurate within defined parameters and always consistent in its makeup. The color of each ingredient is the same each time that particular ingredient is called for in all batches, and so is the degree of milling and the size of the particle or pellet, Wilkerson notes. Thus, the blenders argue, each premix batch delivered to the producer will be as consistent as the previous one and the one that follows.

Blenders can offer food processors another benefitinventory control. Wilkerson offers the example of a customer that used 47 ingredients to manufacture 12 products. According to Wilkerson, the client termed it an inventory nightmare; each item had a different shelf life, and one out-of-stock item would keep the processor from making that product. An analysis of the processors inventory showed that the original 47 ingredients could be reduced to a manageable 12 by blending them into a premix.

After undertaking an inventory analysis, it often becomes apparent that other benefits of improved inventory control might accrue. For example, when manufacturers minimize the range of individual ingredients, they can also reduce storage costs, especially for large minimum quantities. A manufacturer might be required, for example, to purchase a 500-lb. quantity of a commodity even though only 10 lbs. might be used per month. This is one place where the cost advantage of an efficient inventory control system really shows up, says Wright.

Quality control (QC) can take several forms in the debate over outsourcing the premix operation. One important aspect of QC lies in maintaining the ingredients freshness. All ingredients have different shelf lives, Wilkerson notes, and if youre not watching closely, theyll go off-flavor after a while.

The issue of regularity also bears consideration. Manufacturers generally prefer the stability of long, consistent production schedules, running the same product 10 times per day, 6 times a week. Yet if they have to make up 10 lbs. of 10 ingredients for each production run, that weighing and blending represents a labor cost they could avoid. Instead, a blending operation could offer food processors two bags of 50 lbs. of premix for each production runno weighing, no blending, no leakage or loss of product, no potential for batch error.

Regularity is one thing. But what about flexibility? For example, what happens when a rush order lands on the production managers desk? In addition to gearing up to run extra lines, planning longer production shifts, putting on extra bag-handlers and scheduling additional deliveries, he also has to assign critical production people to additional premix duties to keep up with demand for extra ingredient use. At the minimum, this increases the manufacturers costs and adds burdens to the stressed production staff.

Blenders can help with rush orders in either of two ways. As part of their contractual arrangement, they probably store a supply of pre-bagged blend at the manufacturers site. All thats needed is for production employees to reach for the next bag. A simple phone call or e-mail will start replenishing the blend order. Alternatively, the blender can make up a special order for immediate delivery.

Super micros

Yet even in the world of outsourced blending, nothing stands still. While they are ready to support processors with any blend requestedincluding those sanctioned as kosher or organic blenders are constantly researching new types of value-added blends.

The Wright Group, for example, has been carving out a niche for its microencapsulating blends. We typically microencapsulate vitamin A, D and the B group to provide blends with improved taste and stability in the final product, Wright points out. Most recently, we started adding SuperCoat Omega 3 to our SuperBlends®, which works really well for finished products such as nutrition bars. This SuperCoat Omega 3 is currently The Wright Groups most-exciting innovation for the functional-food market.

Ultimately, blenders state they can only succeed as suppliers when the processor has a fundamental understanding of the true costs and benefits of in-house premixing versus outsourcing. If they dont understand or know about all of their internal and sometimes hidden costs, like the labor cost of weighing and scaling, they wont understand the cost advantage we offer, Wilkerson points out. Contracting outside premixing is not a business relationship to enter into lightly.

Martin Schultz is an experienced consumer and trade magazine writer with a special interest in food and food-technology topics. He can be contacted at

[email protected].