Before being hired by the company in 1998, Idahoan Foods President and CEO Drew Facer signed a confidentiality agreement barring him from spilling company secrets “forever and for eternity.”
Facer is just as tight-lipped about Idahoan’s proprietary technology today, as is the norm with other instant potato companies.
The products on the shelf matter, though, not how they get there — and Idahoan’s products sell well. Facer said the business has grown 10 to 15 percent annually for several years.
Such growth is evident in the $50 million in renovations wrapping up at the company’s Idaho Falls factory, which is adding jobs and seeing production increase twofold.
Executives from the privately held Idahoan are typically quiet, but after months of pestering by the Post Register, Facer felt it was time to share the news about the upgrades to its facilities.
“In a lot of ways we’re more well known outside the state of Idaho than we are in our very own city,” he said.
A group of Lewisville farmers started Idahoan in 1951 to take advantage of a fledgling technology that made dehydrated potatoes the most popular vegetable for American soldiers during World War II.
Previously known as Idaho Fresh Pak, Idahoan has invested in a variety of agriculture-related operations since the company formed.
Focus eventually narrowed to retail, food service and industrial production of dehydrated potatoes that went to grocery stores, restaurants and other processed food companies, respectively.
Since the turn of the century, business has narrowed further toward Idahoan’s retail products, including the pouches of Buttery Homestyle instant mashed potatoes found in grocery stores.
“In 1998, I can’t say we’re really a food service company, retail or industrial. We had a little bit of all those businesses, but had not optimized the position of the company,” Facer said. “We leveraged the growth in food service to fund the growth in retail, and haven’t looked back.”
International consulting firm Boston Consulting Group consistently ranks Idahoan among top growing “small companies,” which have sales below $1 billion.
Idahoan ranked in the top 12 small companies annually between 2012 and 2016, while other companies, including Clif Bar, which operates a bakery in Twin Falls, typically breached the top 15 once or twice over the same span.
Idahoan operates three factories. A small Rupert factory produces smaller bulk orders, while Idaho Falls and Lewisville house the “high-capacity” factories.
Improvements to the Idaho Falls factory, built more than 60 years ago at North River Road, reflect the increased focus on retail products. The factory churns out Idahoan’s four staple instant mashed potato products — Buttery Homestyle, Four Cheese, Roasted Garlic and Loaded Baked — in greater numbers than it did several years ago.
In 2012, $20 million was invested in the Idaho Falls factory’s packaging department, Facer said. Over the last 18 months, another $30 million was spent on processing equipment.
Ten to 15 semitrailer truck loads of spuds are dropped off at the Idaho Falls plant each day; that’s twice the amount of product delivered each day before factory improvements.
Potatoes generally come from farms between Blackfoot and Rexburg, and growers haven’t blinked at the increase in demand, Plant Manager Kenny Kniep said.
“I spent time in Twin Falls where there’s some fresh sheds, but not like the amount up here along the Interstate 15 corridor,” Kniep said.
The receiving area smells pungently of earth; potatoes of all sizes are delivered via conveyors and water ducts to three large bays, where they’re stored before being sent to the peeling room. Receiving area upgrades allow Idahoan employees to more efficiently use water and measure potato output.
Potatoes are processed and packaged within 36 hours of arriving at the factory, Kniep said.
In the peeling area next door, new stainless steel drums and containers belie the building’s true age.
An employee sorts freshly peeled spuds before they’re shot with water through a steel tube that chops the potatoes using fixed vertical blades. Then potatoes are heated and mashed in vats.
“Just like at home,” Facer said with a smile.
A video screen near the machinery allows operators to digitally view each production step. The expanded computer system allows employees to parse nuanced data, including the temperature of boiling water during a previous production cycle.
“If we get a customer complaint, they can go back and pull that time code to view conditions,” Kniep said.
On the other side of the room, employees shovel mashed spuds into large, steam-heated rotating drums that dry the potatoes to 7 or 10 percent of their initial weight. Dehydrated flakes come out of the final drum in paper-like sheets.
Various small adjustments to processing steps differentiate instant potato companies.
Kniep won’t divulge what temperature potato flakes are heated to, for example. Likewise, when he was fresh from the Rupert factory upon starting work in Idaho Falls, Kniep was surprised to find a proprietary step between drying and sorting that the company keeps secret.
Idahoan has a research-and-development sector staffed by food scientists and engineers, as do other food manufacturing companies, Facer said.
“Each of the companies we compete with generally has their own manufacturing privately held, and because of that nature, there hasn’t been a lot of information sharing across the industry,” he said.
Packaging lines are more standardized between companies. There were five lines at the Idaho Falls factory when Kniep arrived four years ago; there will be nine when the current round of upgrades finishes in July.
Each line can produce 240 packages of instant potato per minute. Laminated pouches bearing Idahoan’s logo fly off a roll before they’re siphoned full of flakes then hand-packed into boxes.
Improved technology has increased factory efficiency, but Kniep said Idahoan’s personnel play a large role as well. There was high employee turnover when he started working at the factory.
“I think a lot of it was a lack of training and different management style. People were quitting because they didn’t feel appreciated, or were frustrated at not being trained, or they got yelled at,” Kniep said. “We had to pick up the pieces a little bit after I got here.”
Now, machine vendor representatives, including experts from Germany, fly to Idaho Falls to train employees. Kniep said creature comforts such as improved break room amenities and bathroom remodels also help morale.
“I can name every operator on line one. Three years ago I couldn’t have done that because it seems like we were turning people over every six months or year,” he said. “Now it seems like they’ve gotten in, gotten trained and they’re sticking with us.”
Facer expects automation to squeeze out low-paying labor positions, but said employees will move to other parts of the factory instead of being laid off. Recent improvements haven’t led to any layoffs, Facer said.
Idahoan has 675 full-time employees, Facer said; 158 people work at the Idaho Falls factory, and an additional 20 will be hired due to recent building improvements. Machine operators make $33,072 per year plus overtime, Kniep said, while factory supervisors typically make $55,000 to $70,000 depending on prior experience.
Facer and Kniep both heaped praise on factory employees. Kniep only wishes additional ones were easier to find.
“I’ve lived here for several years and I’ve known people who don’t know where we are even though we have a great plant, culture and people,” he said. “If we can attract some talent from the valley that didn’t know we were here, that’s a huge win. If people don’t know we’re here, it’s hard to recruit, especially in a tight economy with unheard of unemployment.”
Idahoan was primarily a North American company for most of its existence, but has expanded into more than 40 countries over the last two years, Facer said.
He doesn’t expect the company to plateau anytime soon.
“We’ve always looked well beyond where we’re at today, and the way we see it, there is no ceiling on the business,” Facer said. “When you’re in growth mode you always ask ‘When will this slow down?’ And I can’t see us slowing down.”
Reporter Kevin Trevellyan can be reached at 208-542-6762.