Basic American Foods
Issue Fall 11
As the pioneer that perfected potato dehydration, Walnut Creek, Calif.-based Basic American Foods maintains a leading position in the marketplace because it continuously looks for innovative ways to improve the quality and convenience of its products for the benefit of its consumer foods and foodservice clientele, President and CEO Loren Kimura says.
Jack and Bill Hume founded the company under the name Basic Vegetable Products in 1933. The brothers set up a modest processing plant in Vacaville, Calif., to dehydrate onions. In the 1950s, Basic Vegetable Products established a potato processing plant in Blackfoot, Idaho, and developed the world’s first instant mashed potatoes. A few decades later, the Hume family sold Basic Vegetable Products but opted to retain the potato business through Basic American Foods.
Basic American Foods remains family owned and is now the largest potato dehydration company in the world with processing plants in prime potato-growing areas, including three in Idaho and one in Washington State. “What we’ve been able to do over time is improve the quality of product, improve operational efficiencies and bring new technologies to bear to develop more value-added products for the food industry,” Kimura states.
Basic American Foods started out with a potato granule product under the WHIIP® brand that offered more holding time and was able to retain its freshness qualities. It later added milk and butter to create the Potato Pearls® brand. Then, it introduced an even more operationally efficient product called Potato Pearls EXCEL®, which enabled restaurant operators to serve a quality product with minimal labor.
The company’s Potato Pearls® Premium Nature’s Own Mashed Potatoes are based on a proprietary technology that is designed to produce the closest-to-scratch instant potato product available on the market today. It was the first dry potato product to receive the American Culinary Federation’s seal of approval.
Basic American Foods offers an assortment of shelf-stable, convenient-prep potato products such as Golden Grill® Premium Russet™ Hashbrowns, Golden Grill®, Golden Grill® Redi-Shred® and Classic Casserole® Scalloped and Au Gratin Potatoes. In addition, the company dehydrates refried pinto beans, black beans and chili beans, and markets them through its Santiago® brand.
All of the company’s products are easy for restaurant operators to prepare since they only require water. “We offer the convenience of dry storage so that they don’t have to inconvenience themselves by opening cans,” Kimura points out. “This reduces waste and addresses labor shortage issues, but the operator still gets a very high-quality product, as well.”
New Market Ventures
For many years, the majority of Basic American Foods’ business has been in the foodservice industry. Aside from serving the nation’s top restaurant and hotel chains, it established a leading position in noncommercial service markets such as healthcare and education. However, the company has begun to strengthen its foothold in the retail/consumer market through its March 2010 acquisition of Idaho Spuds® brand and a licensing agreement for the Hungry Jack® brand potato products from The J.M. Smucker Co.
Basic American Foods focuses mainly on its own collection of brands and does not necessarily offer private label services, although it does provide products, services and ingredients to other manufacturers domestically and abroad, Kimura explains. Today, Basic American Foods’ business is comprised of 70 percent foodservice, 15 percent retail/consumer and 15 percent international/industrial, he says.
“As the market leader in our category, our challenge is to find ways to grow in a mature market that has been pretty flat since 2008,” Kimura reports. “We invested in a dedicated group of individuals who are totally focused on innovation. They want to understand the consumers and our customers at a much deeper level, and use those insights to establish a competitive advantage and drive distinctive new products to the marketplace.”
In addition to launching a dried sweet potato product to the foodservice industry, Basic American Foods has developed a better-for-you marketing platform called Smart Servings™, which offers products with lower sodium and fat content for healthier menu options. “We believe there is always an opportunity to bring better value to restaurant operators,” Kimura notes. “They are challenged with rising commodity costs and flat-to-declining traffic as consumers are choosing to eat out less frequently in tough economic times, so we work closely with our customers on new product ideas and limited time offers.”
Basic American Foods is expanding its product portfolio into the retail channel, with the introduction of hashbrowns under the Hungry Jack brand. “For us, the consumer foods channel represents a new platform, and we believe there are opportunities to bring innovation to that category,” Kimura says. “Adjacent food categories like rice and pasta have been growing much faster than potatoes, and we realize we need to bring in new products to stimulate growth in our category.”
Expanding geographically is another growth objective for Basic American Foods. “Many of our domestic customers are expanding their businesses overseas, so we’ve been able to follow them and grow with them,” he says. “There are opportunities to share new technologies and innovations with consumers in other countries.”
Principles of Lean
Basic American Foods has employed lean manufacturing principles to its operations for the past 11 years, implementing lean not only on the production floor, but also throughout its entire supply chain. “We have a dedicated team of lean experts that work with the operations and supply chain to help with the implementation of lean and make sure we get it right,” Kimura says.
“What we’ve found is lean is about people, not about the processes,” he continues. “You have to hire the right people and make sure they are trained and have the right tools. You have to set the right expectations and accountability. You have to have a disciplined, robust process for doing that, and if you can do that, things work pretty well.”
As part of lean, Basic American Foods utilizes the strategic deployment process to identify its goals and make sure they are cascaded throughout the entire organization. “The strategic deployment process has been valuable in terms of creating a clear line of focus throughout the organization on those few critical items that have the largest impact on our business,” Kimura says.