Massachusetts-based dairy company HP Hood celebrated the 15th anniversary of its Winchester plant on Thursday as company industry officials, employees and area representatives gathered near the plant’s location at 160 Hood Way.
John Kaneb, president, chairman and chief executive officer of HP Hood, said the Winchester facility is the company’s “newest and largest plant” in the country.
The plant produces numerous dairy products from first class fluid milk – which is basically the standard milk products sold at grocery stores – Bailey’s Creamer, Hershey’s Milk and other dairy products, such as cheese.
Since opening its doors in 2000, the facility has expanded several times – including a jobs expansions in 2013 that added 75 new positions at the plant.
“We found that we picked a great location, so we don’t need to build new plants – we’ll just keep expanding Winchester,” Kaneb said, adding that the facility allows the company to “get pretty much where we need to go East of the Rocky (Mountains).”
Mike Suever, the company’s senior vice president of purchasing and milk procurement, said the facility recently completed expansions for two new processors as well as a new wear house and filling lines for production.
“It’ll increase the capacity of this plant by 20 percent when that’s fully utilized,” Suever said, noting that the capacity is for extended self-life products tat do not need to be refrigerated.
According to Suever, this allows the facility to more readily export its products to various locations across the country. “The product would be good for 12 months, but once (the consumer) opens it, it’s only good for two weeks.”
Kaneb said, “We have spent a total of $330 million on this plant since its beginning. There are no immediate plans to expand it further. I hope there will be in a year or two.”
Del. Barbara Comstock, R-McLean, and U.S. Rep. Bob Goodlatte, R-Roanoke, attended Thursday’s ceremony luncheon.
Following the ceremony, Comstock discussed the facility and its positive impact on the local community and to the region. She said, “… (HP Hood) really now provides the dairy farmers throughout the region more opportunities.”
The facility has benefited farmers in the region who are a part of dairy cooperatives, such as the Maryland and Virginia Milk Producers Cooperative Association.
Mike John, of the coop, said the Mid-Atlantic region of the United States – which includes Maryland, Virginia and Pennsylvania – provides most of the milk that the Winchester facility processes.
Any profits that the coop makes from shipping the dairy products to a production facility like the one in Winchester are then sent back to the dairy producers.
Chris Stiles, of Riggs and Stiles Dairy in Berryville and a member of the coop, said most of the benefits he has seen from the facility stem from the cost savings incurred from transportation of milk.
“Anytime we can move milk less distance, it’s an advantage to everybody,” Stiles said.
He said that their operation – which includes 550 head of cattle – ships about one tractor-trailer load of milk everyday, but only ships to Winchester “once in a while.”
“Most of the time our milk goes to Richmond,” he said. “Milk kind of moves south. So, a lot of the milk from here comes from Pennsylvania.”
Still, for the milk that Stiles does ship to facilities, he said there is still an element of market fluctuation that can make turning a profit difficult.
Stiles said that the prices for milk have been relatively flat lately and that the market has benefited the demand for other dairy products such as cheese and yogurt.
The price fluctuations have been influenced by the activity – or inactivity – of foreign markets, according to Stiles.
“They pretty much know what we’re going to use in a year in the United States, but if China buys a lot, then the price will go up,” Stiles said. “It’s amazing how we’re tied to the world market.”
Suever said this activity has a direct impact on the company’s export outlook, as it is looking to expand its reach to foreign exports.
The Winchester facility aims to tap into emerging markets in Africa as well as Asia “where the economies are growing and moving from third world to second world, if you will,” Suever said.
These markets, Suever added, are moving up “on their ability of … a broader middle class to be able to buy these more expensive products.”