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Lifeway Foods needs to get former Golden Guernsey facility up to code

Can't begin operating until plant is inspected

The Golden Guernsey dairy processing plant closed in early 2013. Lifeway Foods bought the facility a few months later and has been getting the building up to code since then.

The Golden Guernsey dairy processing plant closed in early 2013. Lifeway Foods bought the facility a few months later and has been getting the building up to code since then. Photo By Scott Ash

Jan. 21, 2014

When the new Lifeway Foods facility — the old Golden Guernsey dairy processing plant — opens to its fullest potential is still unknown.

"If I were to guess, maybe six months," said Marv Hinnenkamp, vice president of operations for Lifeway Foods. "There isn't a set time. It's based on the Wisconsin Department of Agriculture."

But the plant at 2101 Delafield St. is open, though in a limited capacity.

Hinnenkamp spoke by phone from Lifeway's dairy plant in Minnesota. It also owns a plant in Philadelphia, besides its headquarters in Morton Grove, Ill.

"I view the plant as open," Hinnenkamp said. "We've had a dozen people in there working, and that started last July."

What they've been working on, Hinnenkamp said, is turning a longtime aging dairy processing plant into essentially a brand-new facility that makes kefir, a dairy beverage that contains live and active probiotic cultures plus ProBoost.

There are three steps that have to take place before the 170,000-square-foot facility is fully functional, Hinnenkamp said:

·getting the equipment that makes its bottles approved,

·getting the equipment for standardizing milk,

·actually making kefir.

A big difference is that unlike Golden Guernsey, which operated at the Waukesha facility since 1955, Lifeway doesn't produce half-gallons or gallons. It makes quart bottles.

"This plant always made its own bottles, but we have to change from half-gallons and gallons to make quarts," Hinnenkamp said. "So we've had to put in new conveyor systems and redo a lot of the construction.

"We'll probably be molding bottles by the end of the month."

Once that inspection passes, Hinnenkamp said, the facility can begin making its bottles, which it will transfer to its 50,000-square-foot home manufacturing plant in Morton Grove.

"When we purchased this facility it was either (buy this one) or build a new one, and it was still much quicker to move into one," Hinnenkamp said. "We had outgrown our other facility. It still takes time, and what was run here before was a whole different product."

But actually making its product inside the former dairy processing plant will take some time.

"We have to get the cultural equipment," Hinnenkamp said. "It will take a while yet, as we don't have the equipment, and we have to get that in there, and it could take three to six months to build."

Hinnenkamp said the timeline for opening the plant has changed from when Lifeway CEO Julie Smolyansky initially had hoped, which was the end of last summer.

"We thought we could start right away, but when we came in we had to make all the changes," Hinnenkamp said. "The construction equipment that doesn't work for kefir we've had to take out."

Hinnenkamp said when the owners of Golden Guernsey filed for bankruptcy, Lifeway needed to bring the plant up to present-day code.

"It wasn't up to current code," Hinnenkamp said. "When it was shut down it didn't make code, so we're working on a lot of things. Even though it was approved by the Wisconsin Department of Agriculture just about a year ago, it has to be reapproved. It's being treated as a new startup."

As a result, Hinnenkamp said, they still have to put in new ceilings and walls and redo floors. He said since they only entered the facility last July, it has taken time to evaluate the building and hire inspectors, who have submitted drawings to the state for some 20,000-square-feet of construction.

"It takes months to order materials," Hinnenkamp said. "It depends when we can get a firm commitment to do these things."

Hinnenkamp said that when the plant was operating as Golden Guernsey, there were three shifts and about 70 people inside the facility.

At Lifeway, there won't be a need for that many employees.

"When we start up, we'll be operating at a much smaller capacity," Hinnenkamp said. "We'll have a whole new product. We're not doing a fluid milk operation. We're doing kefir. It's a lot different."

Hinnenkamp said everyone he has hired to work inside the plant has been a former Golden Guernsey employee. When Smolyansky announced Lifeway Foods won an auction to purchase the facility last May for $7.4 million, she said she wanted to hire back as many of the employees who had been laid off as possible.

The Department of Workforce Development recently determined that those workers are owed more than $1.5 million because OpenGate Capital, the company that owned the plant, did not give a 60-day notice of the closing.

The DWD has referred the claims, case record and its determination to the Department of Justice, requesting that it file a proof of claim on behalf of the employees with the U.S. Bankruptcy Court.

The employees are owed $357,743.64 in vacation time ($247,390.53 in union and $110,353.11 in nonunion), the investigation determined and in total, coupled with wages and benefits ($1.2 million), employees are owed $1.57 million.

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