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Monday, 15 February 2010 16:00

Snack time Cheeze Kurls grows by private label manufacturing

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cheez-kurls-ownersWALKER — At DeDinas Franzak Enterprises, quality control can involve some orange-colored fingers.

That’s because the company – which does business as Cheeze Kurls Inc. – is a major producer of private label and its own brand of snack products, the most famous of which, at least in West Michigan, is the Cheeze Kurl – an orange-colored uniquely shaped, crunchy length of cornmeal coated in cheese.

Cheeze Kurls started 46 years ago when the fathers of the current partners bought a recipe from a man who didn’t have the time to commercialize it. The original owners started small, making sales calls during the day and making product at a small shop on Seventh Street in Grand Rapids in the evenings.

The original product – Corn Kurls – were deep fried and seasoned by hand. A couple of years into the business, they began adding cheese to the mix and the company’s signature product was born. As the business grew, the company moved a couple of more times in the Walker area.

“It seemed like all the family had been involved in that,” said Bob Franzak, VP at Cheeze Kurls. “Any brother, sister or cousin has worked here.”

At one time, most any family member could step in and run a machine if there was a problem. President Tim DeDinas said he recalls being in bed on many a Saturday morning when his dad would rap on the door at 7:30 and tell him to get ready for work. It was just what they did, he said.

After a four-year test period, the second-generation owners bought out their fathers’ business over 10 years. The current DeDinas-Franzak team has been running the show since 1996.

Because of continuous growth and a lack of room to expand at their former site off Fruit Ridge Road, the company purchased and moved into a former Lear plant in Walker in 2009 and hired about 15-20 people. Total employment at the company is about 65, spread over three shifts – two for production and one for sanitation.

While DeDinas and Franzak don’t have any plans for getting out of the business, they do worry about succession planning. The third generation is still young and they hope to be able to pass on the business when the time comes, but they also acknowledge that working with family members is difficult because they’re treated differently by other employees.

“We seem to work together better than our fathers did, but we’ve had immediate family members that didn’t work out,” DeDinas said.

Earning some cheese

cheez-kurls-mfgAbout 85 percent of the manufacturing at Cheeze Kurls’ plant is for private labels for store brands of snack products. The company supplies Meijer, Spartan, Family Dollar, Dollar Tree, CVS, and Rite Aid, among others. When various flavors are taken into account, Franzak said the company easily offers more than 80 different products, ranging from baked and fried corn-based products like cheese puffs and crunchy curls and onion rings to a host of different popcorn varieties and mixes.

“It’s not an easy process to break into, steal, or take away someone else’s business,” DeDinas said of private label manufacturing. “You win by having better pricing, better or the same quality, and by being flexible and finding what the customer wants. Private label manufacturing is huge, but a lot of the competition has gone by the wayside. We stay lean and mean and prosper. People in debt a lot are having a hard time keeping up.”

Running lean means using a highly automated, machine-based process and reducing waste to a minimum. Bagging machines sort snacks coming off the line into various small bins, which are instantly weighed and dropped into bags in the combination giving the most exact weight for the product. All food scrap gets hauled away by a pet food manufacturer, and they’ve made every effort to recycle any other products, DeDinas said.

Individual deals vary, but DeDinas said it doesn’t really matter to the company whether they’re selling their own label of manufacturing for private label customers. Both offer a good business opportunity, and because Cheeze Kurls doesn’t buy shelf space, their products get placed where retailers want.

Business by the bagfulls

flying-cheez-kurlsSince moving to the new location, Franzak said the company has successfully expanded by adding new accounts and can add even more capacity once some new machinery they purchased comes online. Still, they’ve already added new products like hot fries and onion rings and introduced new processes, like nitrous flushing to completely take all the air out of a bag to prolong shelf life.

Currently, Cheeze Kurls can manufacture about 2 tons of popcorn, 2.5 tons of cheese puffs, and 1.5 tons of crunchy curls per hour. With packaging and boxing, that much product takes up a great deal of space and poses one of the company’s biggest challenges — having enough room for storage and working with distributors to move product on time. Even without any glitches, the warehouse is packed to the ceiling with skids of product bound for stores all over the U.S. and some international markets.
Another concern is an environment of increasing regulation.

“It used to be we’d say we have to cut down a tree – now we have to cut down a whole forest (just for paperwork),” DeDinas said.

The regulations on just about every aspect of food manufacturing are specific and strict, he said. When a bearing on a machine goes out, for example, a whole series of steps must be taken and recorded and filed and those forms must be supplied upon inspection – almost to an extreme, he said.

As much as possible, the company tries to work with local suppliers – all cooking and coating oils come from Zeeland Farm Services, for example – and DeDinas said the base of food companies in West Michigan provides a good peer network. They often call one another with questions or refer business to one another based on areas of specialization.

“We’re all in the business together,” he said. “There’s no hiding it – we know what each other is doing.”

Value proposition lures customers

And like many food companies around the region, they’re also doing well despite ­– or perhaps because of – the economic situation.

“When the economy goes bad, people stay home and eat more, and instead of buying the name brand, they go with an off brand like ours that’s cheaper and tastes just as good, if not better,” DeDinas said. “When the economy turns a little bit, we seem to thrive.”

In December, the plant was producing around the clock, and in the past few years, business has stabilized throughout the year. Holidays are always busy times, as are occasions like the Super Bowl.

“We used to have some lulls when people would go on diets in January, February and March, but not any more because we have so many different snacks,” Franzak said.

And that means customers – whether eating Cheeze Kurls or a private label – will have plenty of orange fingers, although not necessarily with the traditional crunchy curls. The cheese puff outsells the traditional curls two-to-one, if not three-to-one, DeDinas said.

Read 13098 times Last modified on Tuesday, 27 November 2012 01:01
Brian Edwards

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