Oregon Freeze Dry, Inc.

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Oregon Freeze Dry, Inc.

525 25th Avenue S.W.
P.O. Box 1048
Albany, Oregon 97321
U.S.A.
Telephone: (541) 926-6001
Toll Free: (877) 366-3877
Fax: (541) 967-6527 Web site: http://www.ofd.com

Private Company
Incorporated: 1963
Employees: 300
Sales: $63.20 million (2004 est.)
NAIC: 325411 Medicinal and Botanical Manufacturing; 325412 Pharmaceutical Preparation Manufacturing; 325414 Biological Product (Except Diagnostic) Manufacturing; 311423 Dried and Dehydrated Food Manufacturing

Oregon Freeze Dry, Inc., is one of the world's leading processors of freeze-dried products. A leader in technology, the company designs and builds its own equipment and has processed more than 400 different products, including full meals. Oregon Freeze Dry has expanded beyond food markets into chemicals, pharmaceuticals, and biologicals. The company has two plants in Oregon, representing 70 percent of North American freeze-drying capacity. Oregon Freeze Dry also has a subsidiary in the United Kingdom and a joint venture in Denmark.

Origins

According to a 1996 Scientific American article by company president Herbert Aschkenasy, the concept of freeze drying dates back at least to the ancient Incas of Peru, who would preserve potatoes in the low temperature and low pressure environment of the Andean heights. The process was used during World War II to preserve blood plasma and drugs.

Applications for freeze drying in the 1950s and 1960s largely involved food products. The process consists of fast freezing a food or biological product and then removing its moisture in a vacuum chamber at temperatures well below freezing. The product is then sealed in packaging that will keep out oxygen and moisture, and it becomes edible again when opened and reconstituted with water. Freeze dried food items proved less prone to collapse, retained more flavor, and rehydrated more quickly than those dried by heat. With about 98 percent of water removed, freeze-dried foods typically weighed 80 to 90 percent less than fresh. Freeze dried foods could be kept at room temperature for two or more years. Drawbacks to the process were that it used a lot of electricity and was relatively expensive.

Oregon Freeze Dry was formed in 1963 in Oregon's Willamette Valley to produce dried sliced strawberries for a General Foods breakfast cereal called Post Toasties corn flakes. General Foods executive Ellis Byer was the enterprise's first general manager and later its president and chairman as well.

Oregon Freeze Dry was soon working to produce an alternative to canned rations for the military. It also supplied food for NASA's Apollo space program and developed meals for nuclear submarine crews and "Long Range Patrol Subsistence" in Vietnam. By the late 1960s, Oregon Freeze Dry was a publicly traded company with annual sales of about $5 million.

Going Outdoors in the 1970s

The work in military rations led to the introduction of Mountain House brand freeze dried food for backpackers in 1970. Mountain House representatives claimed its products tasted better than those of competitors since the ingredients were cooked together before freeze drying. Within a few years Mountain House was marketing more than 100 different products. Oregon Freeze Dry also owned the Tea Kettle brand of backpacker food.

Oregon Freeze Dry had sales of $10.2 million in the 1975 fiscal year and net income reached $511,000. According to The New York Times, Oregon Freeze Dry had successfully reduced its dependence on government contracts (once its sole business) to just one-seventh of its sales.

Oregon Freeze Dry developed a line of freeze dried meals for senior citizens in the late 1970s under the Easy Meal brand. NASA supplied research and testing for the concept under a congressional mandate to improve nutrition for the elderly. Oregon Freeze Dry also realized success during this time as American consumers became increasingly interested in food security and survivalism.

By the late 1970s Oregon Freeze Dry was attracting the attention of larger food companies in a burgeoning era of corporate shopping sprees. In 1978, Oregon Freeze Dry was acquired by the Seven-Up Company, which itself would become a subsidiary of Phillip Morris Cos. Inc.

Private Label in the 1980s

In 1982, Oregon Freeze Dry began supplying private label customers. One early client was Nutri-System Inc., a weight loss company for which Oregon Freeze Dry developed a line of products. The company also supplied the Lipton Company with freeze-dried chicken and vegetables for its soups, and tested its own line of freeze dried fruit chips under the Good-body Snacks brand.

Although less than 1 percent of packaged foods were freeze dried, according to Smithsonian, Oregon Freeze Dry was nevertheless the world's largest freeze dried food producer. (The company did not process instant coffee, which was a considerable industry in itself.) Oregon Freeze Dry controlled approximately half of the market for outdoor recreation foods in the United States in the mid-1980s. Although that industry was beginning to lag, as Baby Boomers aged and backpacking as recreation experienced a decline, it was a small part of Oregon Freeze Dry's total business. Industry analysts estimated that Oregon Freeze Dry had reached sales of $50 million a year.

In September 1986, Herbert Aschkenasy, who had become company president in 1981, led an employee buyout of the company after Pepsico acquired its corporate parent Seven-Up from Philip Morris.

In the late 1980s, freeze drying was capturing attention for new industrial uses. Oregon Freeze Dry was attempting to make the freeze drying of ceramics, such as superconductors, commercially viable. Interest in biotechnology was prompting new applications in that area. For example, probiotics such as lactic acid bacteria could be freeze-dried for storage. On at least one occasion, Oregon Freeze Dry helped an archive recover from a flood by freeze-drying books and documents.

New Demands in the 1990s

Operation Desert Storm in the early 1990s resulted in unprecedented demand for Oregon Freeze Dry's military provisions. Employment at Oregon Freeze Dry reached a temporary peak of 600 workers as the company filled a $62 million order for three million cans of chicken, beef, and pork chops to go into the B rations supplied to military kitchens in Iraq. Oregon Freeze Dry was also packaging a $6 million hamburger bun order.

Oregon Freeze Dry further expanded into the chemical, pharmaceutical, and biological markets in the 1990s. These efforts included a deal to freeze dry wound dressings for Carrington Laboratories of Irving, Texas.

In 1995 Oregon Freeze Dry formed a joint venture in Preston, England, called Commercial Freeze Dry Ltd. to produce a range of freeze-dried items. Zeneca Group was an equal partner in the venture until June 1999, when it was bought by Oregon Freeze Dry.

Oregon Freeze Dry overhauled production processes at its three Oregon plants in 1997 using the theory of constraints (TOC) and enterprise resources planning (ERP) software. According to a case study in the Production & Inventory Management Journal, smaller batch sizes (tied to dryer capacity) allowed Oregon Freeze Dry to reduce inventory levels and lead times while increasing on-time deliveries.

These improvements helped Oregon Freeze Dry's Mountain House label meet a big increase in demand caused by the stockpiling that accompanied fears of massive computer crashes at the turn of the century. In addition to its pouches popular with backpackers, Oregon Freeze Dry also packaged food in cans for long-term emergency preparedness storage. (The company was not involved in the emerging market for self-heating meals.)

Company Perspectives:

We're proud of our reputation as a progressive, quality-conscious company. Through innovative research and product development, Oregon Freeze Dry will continue to lead the world in freeze-drying technology.

Key Dates:

1963:: Oregon Freeze Dry is formed in Albany, Oregon.
1970:: Mountain House brand is established to supply outdoor recreation market.
1978:: The Seven-Up Company acquires Oregon Freeze Dry.
1982:: Oregon Freeze Dry begins producing products for private label customers.
1986:: Company president Herbert Aschkenasy leads an employee buyout.
1991:: Operation Desert Storm produces unprecedented demand.
1995:: A U.K. joint venture, Commercial Freeze Dry Ltd., is established with Zeneca Group.
2000:: Danish Freeze Dry is acquired in a joint venture.
2002:: Demand for freeze-dried berries escalates in the breakfast cereal industry segment.

More Fruit and Cereal After 2000

Another European producer was acquired by Oregon Freeze Dry through a joint venture in March 2000. DLG/Agrova Food joined Oregon Freeze Dry in the purchase of Danish Freeze Dry A/S, which was formed in 1964 and had sales of about DKK 80 million a year. Oregon Freeze Dry's U.K. business, Commercial Freeze Dry Ltd., became a subsidiary of Danish Freeze Dry.

In 2002 the company won a contract reminiscent of its earliest business. Kellogg ordered sliced strawberries to add to its Special K cereal (a European version had been a big hit in 1999). General Mills also began adding Oregon Freeze Dry's berries to two new varieties of Cheerios cereal, including the popular Berry Burst version. Other cereal brands soon clamored for freeze dried fruit.

Oregon Freeze Dry continued to find new and interesting applications for its technology. It assisted an Oregon company in packaging blue-green algae as a dietary supplement. The company was also processing an artificial diet for lacewings, a beneficial predatory insect, for a California insect supplier that was raising them for the agricultural market. With production capacity in North America, at its Danish joint venture, and at the U.K. subsidiary, Oregon Freeze Dry was well equipped to meet traditional food needs as well as to explore new applications for the freeze dry process.