As the high-pressure food-processing industry has expanded beyond popular cold-pressed juices, a Carson food company has been squeezing new revenue from its investment in the technology.
CedarLane Natural Foods Inc., whose fresh and frozen products are sold in stores such as Ralphs and Whole Foods throughout the West Coast and other parts of the country, has boosted its revenue by 40 percent after purchasing two high-pressure processing machines within the last five years for around $8 million, according to Robert Atallah, founder and chief executive.
The company, which finished building a fourth plant at its facility last month and is in talks with Wal-Mart Stores Inc. to sell its products at stores nationwide, is poised to further infiltrate the rest of the country.
“By the end of 2017, we expect to be in every corner of America,” said Atallah, 67.
CedarLane, which has about 730 employees, is part of a growing number of manufacturers to use the bacteria-killing high-pressure processing, or HPP, technology to meet a growing demand for fresher foods with fewer preservatives. Although cold-pressed juice might be the most well-known application, the approach is being used in an increasing number of products, including salsas, hummus, and deli meats.
The market for HPP products is expected to reach $12 billion by 2018, according to industry research group Markets and Markets, up from $4.3 billion in 2011.
So fresh, so clean
Unlike the more traditional food-processing method of pasteurization, which uses heat to kill bacteria, HPP uses pressure. Food items wrapped in plastic are placed inside a machine, which is flooded with water, and 80,000 pounds of pressure per square inch are applied evenly to all sides of the item for one to three minutes.
“It’s the equivalent pressure you would encounter if you went 38 miles down in the ocean,” said Ash Husain, CedarLane’s chief technology officer.
Because of the pressure, only certain foods can be treated; leafy greens don’t stand up well to the method. And the packaging must be flexible enough to withstand the pressure. There is a 15 percent to 17 percent deformation in volume.
The technology has been around at least since the 1990s, according to Errol Raghubeer, senior vice president of HPP science and technology at Avure Technologies Inc. in Erlanger, Ken. The 60-year-old company is one of the largest manufacturers of HPP machines in the world and the maker of those used by CedarLane.
Demand for HPP has picked up in recent years, he said.
“Since 2010, the increase has been almost exponential,” Raghubeer said, noting the company has made about 300 HPP machines since the technology was developed.
The growth, which was temporarily slowed by the recession, has been fed by updated federal regulations and changing tastes.
“There’s been a movement worldwide for less preservatives and more natural foods,” said Raghubeer. “Manufacturers are reducing the number of ingredients. With HPP, because it’s a natural process, you don’t need to add any preservatives.”
That includes sodium, which is included in many preservatives, he noted.
In addition to killing bacteria including E. coli, listeria, and organisms such as mold and yeast, HPP can double or triple an item’s shelf life. For CedarLane, the company said it increased shelf life from one to two weeks to a month or more.
Improved taste over traditional processing methods has also contributed to HPP’s popularity, according to the practice’s supporters.
“There’s no effect on the covalent bonds, so the flavor and taste aren’t affected,” said Raghubeer. “That’s been a significant driver of the technology.”
HPP allows food manufacturers to have their cake and eat it, too, said CedarLane’s Husain.
“The idea is you want to retain all the sensory aspects, the biochemical value, the nutritional aspect, and the aesthetic of the food, to make it look like it’s fresh out of the oven or restaurant, and yet, you want to make it safe and longer lasting,” he said.
Opening markets
Before founding CedarLane in 1981, Atallah, who is from Lebanon, opened the Hungry Pocket Mediterranean restaurant across from Santa Monica College. He sold the restaurant in 1979.
Early on, CedarLane, which started in Venice, sold its products such as hummus through Mrs. Gooch’s Natural Foods Market, a local chain of health food stores launched in West Los Angeles in 1977 that was acquired by Whole Foods in 1993.
As the business grew, it changed locations a few times before settling in Carson. Although CedarLane has been around for more than 30 years, it was confined to selling its products on the West Coast because of the logistics and cost of shipping fresh food, said Atallah. HPP changed that.
“Usually, when you’re dealing with fresh food, you’ve got to stay local,” he said. “We utilized the technology to go national.”
Investing in HPP can be expensive, however, ranging from $1 million to $4 million a machine. Many companies instead pay to use machines owned by “tolling centers” such as the one operated by True Fresh HPP in Buena Park and at least two others in Los Angeles County.
True Fresh, which opened its facility in December and is planning to open additional locations across the country, has more than 20 customers at its Orange County operations, according to its president, Mark Lodge.
CedarLane, however, decided to skip the middle man by purchasing its own machinery.
“It allows us freedom and flexibility,” Atallah said. “Usually if you have the financial ability, if the business is strong enough, you buy your own machines. You have a lot more control over the timing.”
To pay for the two machines, which together cost about $8 million, CedarLane had to take out bank loans. The first machine, which the company bought in 2011 for more than $3 million with a loan from Wells Fargo, is already paid off, Atallah said. The company got a loan from GE Capital, now also part of Wells Fargo, to purchase the second machine at the end of 2013.
Atallah hired Husain, a biochemical engineer who used to work at packaged-food giant ConAgra Foods Inc., to work out how to incorporate the new technology into CedarLane’s business. Husain spent about a year and a half working out the kinks, including experimenting with different types of plastic films for packaging.
Another cost was reinforcing the ground under the machines, each of which weighs 250,000 pounds, Atallah said.
But all of this investment in time and money could pay off. As the popularity of frozen foods has decreased, CedarLane has been able to capitalize on the changing market.
The company expanded its fresh food business, which includes ready-to-eat entrees such as chicken fettucine and grain- or bean-based salads, to 70 percent of its volume.
Husain said he could see a larger company trying to acquire CedarLane in the next few years, pointing to Campbell Soup Co.’s 2012 acquisition of Bolthouse Farms, a California food producer that uses HPP on its fruit and vegetable juices. Campbell also acquired Garden Fresh Gourmet, which treats its salsa and hummus dips with HPP, last year as part of its effort to expand into fresh foods.
“I think in the years to come, other companies are going to be looking at (CedarLane),” he said.
