The increased demand and urgency to keep food companies at full tilt has thrust companies like packaging machine maker Delkor Systems onto the list of essential businesses staying open during the coronavirus pandemic.
Orders for the company’s bus-sized packaging robots are coming in so fast from food companies such as Daisy Sour Cream, Hershey, Hormel and Great Lakes Cheese that the Arden Hills factory is adding space and more than 30 new workers to keep up with demand.
“Several of the big food companies told us they are moving forward with their new equipment orders. Hormel is expecting to give us a [huge] order today,” Delkor CEO Dale Andersen said earlier this week. “And I am expecting a big order from Hershey’s, and we are getting a big order from Wells Blue Bunny [ice cream].”
Other orders are from Dole frozen foods in California and Great Lakes Cheese’s three factories in Wisconsin.
Delkor is not the only company benefiting from the surge. CEO and equipment association leaders nationwide report a mad dash as food labelers, box makers, tray packers, shrink wrapping and other packaging robot makers help food producers restock empty grocery stores during the COVID-19 outbreak that is quickly paralyzing other parts of the economy.
“If you are heavily involved in food and beverage packaging right now, it’s going pretty darn well for you, provided you can get your employees in the door,” said Jim Pittas, CEO of the 900-member PMMI, the packaging industry’s trade association.
“Our members are kind of going crazy,” he said. “This is like the holiday season, but it’s not a holiday. No one knows when this will end.”
At Delkor, plant employees have started working six days a week, prompting Andersen to boost overtime pay to twice the hourly wage. The company also took over the lease next door, gaining a 30,000-square-foot space.
“With many of our customers now operating 24/7 to ensure a safe and secure food supply chain during the virus, Delkor ramped up our operation to support customers 24/7,” Andersen said. In six weeks he will hire 35 more workers, on top of 20-plus workers brought on board since Jan. 1 to his 230-member staff.
Demand for products such as vehicles has plummeted, nearly shutting down production temporarily for companies such as General Motors and Ford — which are retooling to meet health care needs — and Polaris and Winnebago.
That’s not the case in the consumer product industries. With Cub Foods, Costco, Target and other grocers’ shelves stripped of canned goods, toilet paper and frozen foods, many food companies and their vendors are doing whatever it takes to keep food flowing to tables across the country.
Minnesota case-packaging robot makers such as Delkor, Douglas Machine and Massman Automation Designs in Villard are scrambling to keep up with the added demands placed on food producers such as General Mills, Post, Tyson Foods, Great Lakes Cheese, Land O’Lakes and Schreiber Foods as well as demand from Target, Cub Foods, Walmart, Sam’s Club and Costco.
Their tasks in keeping the food economy going was recognized Monday in a video message sent to Delkor and other supply-chain links by U.S. Secretary of Agriculture Sonny Perdue.
“You are vital to our economy and vital to the needs of Americans having a food supply,” Perdue said in the message.
Dan Zagzebski, president and CEO of Great Lakes Cheese, said business has been so busy at his eight U.S. cheese repackaging plants that he hired temp workers so his regular workers wouldn’t burn out with the addition of night and weekend shifts.
“Orders are coming in strong to restock the stores,” he said. “That is where we are seeing the increase.”
Delkor, which normally ships $5 million of packaging robots each month, is boosting production.
This month, the U.S. Department of Homeland Security designated Delkor’s workers as “essential critical” during the government’s response to COVID-19 and received letters from the company’s customers designating it an “essential” food-chain supplier.
The new letters mean that “if the government shuts down, we have permission to still operate” even in the face of the virus and any state or federal orders for workers to stay at home, Andersen said.
As a precaution, he makes all his factory workers carry copies of the Homeland Security “critical” designation letters with them in their vehicles. That way, if Minnesota, Wisconsin or other authorities question his workers about stay-at-home orders, employees will be protected.
Other food-equipment CEOs are also arming workers with letters.
“The first hurdle for manufacturers is making sure they can all stay open and operational,” said Pittas, of the packaging association.