Sharron Moss-Higham

November 1, 2001 Daniel Vance

Forty-year-old Sharron Moss-Higham manages Kraft Foods’ largest North American process cheese plant — and perhaps the world’s largest. It is 350,000 sq. ft. of aged cheddar cheese and 950 employees wearing hair nets. All those 22-ton trailers rumbling out of New Ulm to distribution points all over are trying to satisfy America’s long-standing hunger for Kraft process (or “processed”) cheese, the nation’s fourth bestselling product line in grocery stores. This year Kraft-New Ulm alone will manufacture and ship billions of Kraft process cheese slices, all of America’s Handi-Snacks, and nearly all the nation’s Velveeta, the kitschy cheese loaf adored by millions.

In 2000, Kraft Foods, with revenues of $34 billion, was America’s largest and the world’s second largest branded food and beverage company. In June 2001, the company was spun-off from Philip Morris in a 28 million share initial public offering. Your kitchen table just wouldn’t be the same without Kraft brands Velveeta, Jell-O, Kool-Aid, Cool-Whip, Miracle Whip, Oscar Mayer, Cracker Barrel, Stove Top, Grape Nuts, and Maxwell House.

Food manufacturers are seldom recognized as major contributors to southern Minnesota’s economy, perhaps because of a pecking order that puts them behind printing, telecommunications, agriculture and others. But Kraft-New Ulm — and Blue Earth’s Nuvex Ingredients — are marquee players on the U.S. food manufacturing stage and a force majeure in their respective cities as employers. Through the efforts of plant managers like Sharron Moss-Higham, they are racking up profits while much of American industry has stalled. Bad economy or good, we all have to eat

CONNECT: Tell me about this plant and its workforce? What does it mean to New Ulm?

MOSS-HIGHAM: Kraft is one of New Ulm’s two largest employers, with over 900 employees. Our average length of service is 13 years, and one-fourth of employees have more than 20 years of service.

Construction began on the building in 1954. It opened, I’ve been told, a year later to produce oils and process cheese. Brands produced then included Miracle Whip (later moved out of New Ulm) and Velveeta. In the 1960s, New Ulm pioneered production of Kraft Handi-Snacks, a two-compartment, primarily cheese and cracker product. Today, Kraft-New Ulm is Kraft’s largest process cheese plant and the sole producer of Kraft Handi-Snacks. It is one of several plants that make Oscar Mayer Lunchables.

The plant covers more than 350,000 square feet, sits on 30 acres, and has a distribution center attached to the plant. There is also a Kraft Private Fleet transportation operation across town, with more than 30 trucks and 50-plus trailers to move product out to customers and seven regional Kraft distribution centers.

Kraft-New Ulm contributes more than $300 million a year to the state’s economy through payroll, taxes and purchases of raw materials, supplies and services. This doesn’t take into account the value of finished product sold or the amount contributed to the economy by our suppliers.

On another note, as of mid-September 2001, the New Ulm plant had logged 2.7 million hours without a lost-time accident. Our employees recently earned the Kraft Award for Safety Excellence, and our plant has been a recipient of the Minnesota Safety Council Award. I think this says something about the abilities of our people.

CONNECT: If this is Kraft’s largest process cheese plant, and Kraft is the largest producer of process cheese in North America, is this the largest process cheese plant in North America? in the world?

MOSS-HIGHAM: I could guess that it is, but I don’t know for certain. We do have other cheese-producing plants that have greater square footage. But like us, they produce other food products there as well. You could look at that question in different ways — the plant with the largest amount of square footage devoted to process cheese, or the plant that makes the largest quantity of process cheese.

CONNECT: Can you quantify what is shipped out?

MOSS-HIGHAM: This facility produces 146 products for retail or food service, with 90 SKUs of it process cheese. I cannot be specific with pound or case volume for competitive reasons, but for perspective, before this interview I compiled for you the following “facts” to help give some scope to what we produce in New Ulm:

The Velveeta produced in 2000 would equal the weight of 33,500 Volkswagen Beetles.

The cheese slices produced in 2000, placed end to end, would wrap around the equator 7.4 times.

The red sticks used in our Kraft Handi-Snacks product would cover a distance greater than the diameter of earth, 8,118 miles.

CONNECT: How is process cheese made?

MOSS-HIGHAM: It’s a fairly straightforward science. We first grade our cheese according to flavor and body attributes, and then grind and blend it with other ingredients, a process that allows the end cheese to have the right slicing and melting characteristics. Process cheese has a smooth, creamy, unified texture that melts and performs the way people want in recipes. After the ingredients are blended, they are cooked and the cheese goes to a line where it’s filled and packaged and shipped.

CONNECT: Is there real cheese in Velveeta?

MOSS-HIGHAM: Of course. It starts with natural cheese, which is graded and flavored. The process I just described is done with both Velveeta and cheese slices.

CONNECT: When I was buying Kraft product in 1988-90 as a buyer for a food wholesaler, the Kraft salesman told me then that Kraft made all or nearly all of its own cheese. Is that still the case? And if you farm out some production, what sort of quality control do you have?

MOSS-HIGHAM: We still manufacture a majority of our cheese products, though we use external manufacturers as a secondary source. As far as quality goes, Kraft has very strict standards, for our own plants and for co-manufacturers. Co-manufacturers must adhere to our specifications for cheese. Their facilities must adhere to our expectations for sanitation. Their suppliers must meet our standards. We test their product by grading and tasting it, and using it in recipes. We also have a Consumer Response and Information Center, which tracks comments from consumers to be certain we are pleasing our consumers.

CONNECT: Do the different parts or divisions of Kraft work together?

Let me give you the broader picture of Kraft Foods North America to help you see how the organization fits together.

There are actually four major product segments, with a Group Vice President at the head of each: Cheese, Meals and Enhancers; Biscuits, Snacks and Confectionery; Beverages, Desserts and Cereals; and Oscar Mayer and Pizza. Kraft has about 100 plants in North America grouped geographically into four areas. The four areas report to the Senior Vice President of Operations. New Ulm is in the Central Operations Area, which is made up of 24 plants. Those plants report to one area vice president. The plants in our “area” make everything from Kraft cheese, Tombstone pizza, and Oscar Mayer hot dogs to Kool-Aid drinks and Jell-O pudding. The sales and marketing of our products here in New Ulm are handled by three different business divisions at Kraft: Cheese, Oscar Mayer and Desserts.

CONNECT: Are there other divisions that could site their products here? For instance, let’s say you had unused space and it fit the needs of, say, Post cereals.

MOSS-HIGHAM: That was the case with Oscar Mayer Lunchables. We just celebrated our one-year anniversary of making that line of products. New Ulm presented Oscar Mayer with a very good business proposal and plan, and the plant was bound and determined to get Lunchables because they felt in their heart that New Ulm was the best site.

Historically, the employees at this plant have shown a great deal of innovation, aggressiveness and results when it comes to their business. Quite a bit of Kraft prototype activity begins in New Ulm, such as testing new manufacturing systems and modifying equipment processes. Combining our reputation with a sound business plan was what landed Lunchables.

CONNECT: So various Kraft plants work together, and also compete against each other?

MOSS-HIGHAM: Yes, we do compete. Our working relationships benefit the business, our customers and consumers.

CONNECT: Like most companies, I’m sure you’re striving to be an efficient, just-in-time operation. Cheese is a perishable product. How are you able to accurately forecast production when your customers demand just-in-time delivery?

MOSS-HIGHAM: Forecasting is an integrated effort that involves other functions within Kraft at the headquarters level, like sales and marketing, together with our operations supply chain and logistics group. The latter two groups determine how much we are to produce and have on hand, and they determine our “build” periods. They work with our local schedulers to determine our production planning based on sales demand and trade promotions.

CONNECT: Do you order raw product? Or do they handle that?

MOSS-HIGHAM: Our corporate procurement organization does demand planning and forecasting by looking at long-term needs and by working closely with vendors. Many ingredients and supplies we use can’t be purchased overnight from just anyone. For example, our cheese must be aged. We project our needs forward on an ongoing basis.

CONNECT: What if you can’t get a basic ingredient? (For example, there were disruptions in supply because of airline bottlenecks due to the World Trade Center disaster.) With a shortage, would you have to go on allocation with your customers?

MOSS-HIGHAM: Allocation is a very “sensitive” word [and topic], one that manufacturers go to great lengths to avoid. If we suddenly couldn’t get our hands on a basic ingredient, we would hopefully have enough inventory spread over all our plants and distribution centers to carry us through the short-term. If the shortage of a raw material became serious, then steps would have to be taken to prioritize or allocate customers’ orders.

CONNECT: While walking in I noticed hair nets on all the heads. Are they required?

MOSS-HIGHAM: Product quality starts at the plant level. Employees must wear hair nets, they can’t wear jewelry or chew gum, and they must be clean and tidy in appearance. This applies to visitors, as well. We produce food products that must meet stringent requirements.

CONNECT: Labor is tight. What are you doing to attract employees?

MOSS-HIGHAM: To fill openings, we offer four- and eight-hour work blocks on a part-time basis, along with flexible scheduling. Kraft has been in New Ulm 50 years and is well known. If a person in the New Ulm area isn’t already working for Kraft, then certainly they have a family member or friend that has worked here. Our people are our best ambassadors to help us find employees.

CONNECT: What makes a good employee?

MOSS-HIGHAM: Good employees care about what they do and where they work. They are enthusiastic about working for a good company. Good employees care about working safely and seeing that their co-workers work safely, as well. They try to understand their business and how individually and as part of a team can favorably impact it. And, they understand the positive aspects of change. We look for these qualities in the interview process by listening to prospective employees talk about their past work experiences.

CONNECT: How about your background?

MOSS-HIGHAM: I was raised in Terre Haute, Indiana, and graduated from Purdue Univ. with a Food and Nutrition degree. From there I took a Food Technologist job in 1983 at Kraft’s biggest plant, in Champaign, Illinois. It was a great opportunity with an entry-level position to get my foot in the door. In mid-1985 I moved to research and development, progressing from the scientist level working on salad dressings to a section manager position in dinners. In 1990 I began a headquarters operations assignment working with the grocery operations groups, which then included the tablespreads, salad dressing, Miracle Whip dressing, barbecue sauce, confections and macaroni and cheese dinners businesses.

I eventually earned an Operations Business Manager position in which I worked on the tablespreads business along with marketing, sales, research and development, finance, logistics, and engineering people. We made sure all production needs were met, new formulations were right, new products successfully introduced and all headquarters initiatives accomplished. I then moved on to the macaroni and cheese business for the next five years, then in 1998 I accepted a plant manager position in Mason City, Iowa. For my career development and growth with Kraft, I needed the experience of being a plant manager. I’d learned a lot before but never had the actual experience of running a facility.

CONNECT: And then the opening here earlier this year. What happened to the last plant manager?

MOSS-HIGHAM: Joe Luetmer was promoted to Operations Business Director with the Oscar Mayer operations group in Madison, Wisconsin.

CONNECT: To what or whom do you attribute your success? Any particular person or turning point?

MOSS-HIGHAM: So far, my work experiences have had much to do with shaping my career. Personally, I have always had the desire to grow, develop and learn — and that has been a driving force. Another key is that I haven’t been in a hurry to get to the next promotion, but have tried at each new assignment to do my best and focus on the task at hand. And I’ve tried to add value to each new assignment. In other words, I’ve been taking it one assignment at a time.

At Kraft, I’ve also had some great mentors who have shared their experience with me. About mentors — Kraft does have a formal mentoring program through its Diversity Councils. The company has a commitment to diversity in hiring and promoting women and people of color, and there are groups like Women in Operations, the Kraft Foods African American Council and the Kraft Foods Hispanic Employees Council that provide a forum for people to network, mentor and support each other while also strengthening diversity efforts within the company.

CONNECT: What are the toughest decisions you have to make?

MOSS-HIGHAM: The plant managers I know are all caring people. The toughest decisions always revolve around people, decisions that affect their direct work environment. I don’t operate in a vacuum, but I am fortunate to have an absolutely stellar staff. They are great leaders, functionally and technically strong. I rely on them to run their departments and provide recommendations when tough decisions have to be made.

CONNECT: You earned Kraft $700,000 in energy rebates at your last plant assignment in Mason City, Iowa, for implementing various new energy management processes. Has this plant been able to cut energy costs, too?

MOSS-HIGHAM: Just the last few years this plant has implemented a system that automatically — and efficiently —starts and stops equipment; has installed another refrigeration condenser that reduces the plant’s overall electrical load; and has installed a new computer system to constantly monitor the overall electrical load, keep the power usage at a set level, and therefore reduce electric power swings. In the past six months we’ve assembled a group of employees whose function is reducing electrical usage. They call themselves the “Energy Rangers” and have been very effective in raising awareness of electrical usage and in coming up with ideas to reduce energy costs.

CONNECT: Would you say this is an environmentally friendly plant?

MOSS-HIGHAM: We send nothing to landfills. Everything is either recycled or taken to be burned at Minnesota Waste Processing where the heat is converted into electricity at Xcel Energy for use in Mankato. Getting to this point was a huge accomplishment for our 15-member recycling team. They are also committed to reducing solid waste generation. Additionally, in September this team took on the first ever “Green Expo,” an opportunity for Southern Minnesota businesses, industries, agencies and organizations to display their environmental initiatives, programs, products and services that can benefit both our environment and our economy.

CONNECT: Hormel has capitalized on Spam’s years of retail success by building a museum and hosting an annual festival in Austin. Spam has a strong following. Kraft in New Ulm manufactures a product, Velveeta that also has a dedicated following. Why couldn’t New Ulm, with the help of Kraft, turn its town into the Velveeta capital of the world?

MOSS-HIGHAM: Kraft’s participation would have to be driven by the brand’s marketing group. And, to be technically correct, our New Ulm plant is not the only producer of Velveeta.

Sharron Moss-Higham Biography

Born: May 1961
Personal: Husband, Scott
Education: Terre Haute North Vigo High School, Terre Haute, Indiana, ’79. Purdue University, B.S., Food Nutrition