Manufacturer of the Year Nominee

by Karen E. Culp

SBJ Staff

Hiland Dairy Foods is 60 years old this year, and much has changed at the Springfield-based company during those years.

Lonnie Parmenter, Springfield plant manager, came to work for Hiland in Springfield in 1965. At that time, the Springfield plant bottled about 20,000 gallons of milk per day, Parmenter said; on an average day now, the plant bottles 225,000 gallons.

Back then, the dairy company got its milk from dairy farms that were within a 30-mile radius of Springfield. Now, the company gets raw milk from as far away as Colorado, Parmenter said.

Hiland is among the three nominees for the Springfield Area Chamber of Commerce's Manufacturer of the Year Award.

The company saw the most growth in the mid-1980s, after Prairie Farms and Mid-America Dairymen formed a partnership to purchase the company in 1979.

"The purchase gave Hiland greater financial resources and enabled us to get the plant equipment needed to handle more volume," said Gary Aggus, assistant general manager and general sales manager at Hiland.

Hiland now has five manufacturing plants. The plants are located in Springfield; Wichita, Kan.; Fayetteville and Ft. Smith, Ark.; and Norman, Okla. The company also has 26 distribution sites in the six-state area of Arkansas, Missouri, Oklahoma, Kansas, Colorado and Texas.

Hiland processes, packages and ships several dairy products under its label and under private labels for retailers such as Smitty's, Git-n-Go, Wal-Mart and others.

Hiland's line of products includes fluid milk, cottage cheese, sour cream, dips, yogurt, orange juice, ice cream, frozen yogurt, sherbet and buttermilk. The company is also the Midwest area distributor for other companies such as Haagen-Daas, Breyer's and Ben & Jerry's.

The quality of milk it now distributes is much better than it was 20 or 30 years ago, Parmenter said. Twenty years ago, seven days of shelf life was the average for fluid milk, but because of better processes and equipment, milk Hiland bottles now has a shelf life of up to 18 days, Parmenter said. The industry standard shelf life is 15 or 16 days.

"The milk is so much greater quality now, and it's getting better all the time," Parmenter said.

With the purchase of Hiland by the partners who now own it came the expansion of the company into new market areas, Aggus said. In 1984 and 1985, the company acquired two dairy plants in Arkansas. Successive purchases followed in 1991, when the Wichita, Kan., site was acquired; and in 1993 and 1994 when two sites were purchased in Oklahoma.

Customer demand has changed much of what Hiland produces, Aggus said. When the company began doing business, it produced only whole milk. Later, 2 percent and skim milk came into production and now those outsell whole milk. Skim milk and Hiland's Skim Extra, a type of skim milk that has a texture similar to 2 percent milk, are the company's fastest-growing items, Aggus said.

Hiland was owned by two individuals before Prairie Farms and Mid-America Dairymen, now Dairy Farmers of America, purchased the company. Prairie Farms is the managing partner in the company, said Randal Hyde, human resource manager, while DFA is a silent financial partner.

Gary Hanman, chief executive officers of DFA, praied Hiland's growth.

"It's been a privilege for dairy farmers in the area to spply Hiland because it's been such a good market for growth and that's allowed dairy farmers to grow," Hanman said.

"The key to our success has been the quality of our product. That is what has kept our customers coming back and the quality we have is attributable to the state-of-the-art equipment we've been able to maintain. Our owners have been instrumental in our keeping the best quality equipment," Aggus said.

Consolidation has been a trend in the dairy industry for some time, Aggus said. The consolidation has been on the dairy farm, among cooperatives, such as the Mid-Am merger with three other cooperatives to form DFA, and in grocery stores, as in the recent merger of Albertson's with American stores.

"It's getting such that you have to be very aware of your operation. In this environment, if your company does not have the proper sanitation and quality, you are likely to go out of business. Quality continues to become more important," Hyde said.

Parmenter said that Hiland is able to maintain consistent quality in its products because of innovations in technology.

"It used to be that our ice cream was hand mixed, but now we've got computer controls and the ice cream mixes are made by computer. These things have to be exact, and plants that can't maintain that consistency are going to have a tough time competing," Parmenter said.

Being nominated for the Manufacturer of the Year is a great source of pride for the people at Hiland Dairy Foods, Hyde said.

"We've always thought of ourselves as small in the community, but this nomination is something that makes you stand back and think, we really are a big part of the community," Hyde said.

Hiland employs 940 people total, and about 250 of those individuals work in Springfield.

Many of those employees are long-time Hiland workers; the company has a low turnover rate and keeps many of its employees, Parmenter included, more than 20 years.

Hiland had $287 million in sales in 1997, Aggus said.

HILAND DAIRY FOODS:

Business philosophy: "Continuing to provide the consumer with the highest quality product at a competitive price."

Year founded: 1938

Address and phone number: 1133 E. Kearney St., Springfield, 862-9311

Owner: Prairie Farms and Dairy Farmers of America

PHOTO CAPTION:

One of Hiland Dairy's employees hoses the floor while gallons of milk make their way to the shipping room.

PHOTO CAPTION:

Above: Half pints of milk make their way through Hiland Dairy's new half-pint machine. This one is used to package milk for school children.

Left: Cartons of ice cream travel down the line at Hiland Dairy in Springfield.

Highland Dairy is one of three nominees for Manufacturer of the Year. [[In-content Ad]]