Newton firm expands presence in world health food market

By: Josh Lintereur, Gannett Wisconsin Media

NEWTON — Across the street from a shuttered bank in this quiet 2,200-person town, a nondescript seed processing plant is rapidly widening its presence in the global health food market.

Every week, from January to May, Canadian National railcars haul 200,000-pound shipments of flaxseed from remote farm fields in the provinces of Manitoba and Saskatchewan to the south Manitowoc County plant, called ENRECO, Inc.

From there, the flaxseed is loaded into silos and then processed for use in breads, snack foods, cereals and other food products destined for points around the globe thanks to the surging popularity of omega-3-rich foods, which are associated with a range of health benefits.

At ENRECO, which also operates a sales and marketing office in Sheboygan Falls, global demand has been so strong that the company's international sales grew by 90 percent during the last three years.

"There's a lot of demand for flax because it's the most cost-effective source of omega-3s," said Ravin Rajan, vice president of operations.

The company's success in expanding into international markets was recognized this month when the company received an Export Achievement  Award from Gov. Jim Doyle.

ENRECO was one of seven companies to receive an award, winning in the small agricultural exporter category. The awards are presented annually to Wisconsin businesses that contribute to the state's ability to compete in a global market.

"Getting into exporting cushions companies against downturns in the domestic market and makes them more stable," said Tony Hozeny, state Department of Commerce spokesman. "We want to do everything we can to encourage other companies to explore the international marketplace."

ENRECO retained all 25 of its employees during the recession, grew its sales and made new capital  investments to position the company for further success.

"They certainly deserved the recognition," Hozeny said.

An early breakthrough

ENRECO, which stands for Essential Nutrient Research Corp., was formed in 1987 as the research and development arm of Natural Ovens Bakery, a pioneering Manitowoc-based company that produces nutrient-rich baked goods.

Natural Ovens' owner at the time, Paul Stitt, was an early proponent of flaxseed oil, which is rich in omega-3 fatty acids. After founding ENRECO, Stitt developed a proprietary method for increasing the shelf life of ground flaxseed, as the seeds would otherwise degrade very quickly.

That breakthrough process opened the door for using ground flaxseed in a wide range of food products and paved the way for the company's success today.

"If you grind flaxseed yourself, within two to four days, you'll smell it going bad," said Rajan, who moved to Manitowoc from Sri Lanka in 1999 and led the company's push into overseas markets.

ENRECO was sold in 2004 — three years before Stitt sold Natural Ovens — and new owner Sean Moriarty
continued to develop flaxseed-based products and  eventually perfected a processing technique that extended the shelf life of ground flaxseed to more than two years.

Today, about 80 percent of the ENRECO's sales are from conventional and organic bulk flax ingredients s
old under the ENRECO brand name to food companies, such as Kellogg's and General Mills.

Those buyers then use the flaxseed in other food products, including breads, pizza crusts, pastas and cereals.

ENRECO's remaining sales come from food products produced mostly in-house under the Omega Fields brand, including pet treats, horse food and chicken feed. Those items are sold online and at Fleet Farm, Tractor Supply and other retailers.

Expansion in the works

Rajan said the company didn't see a drop in sales during the recession, either domestically or internationally. In fact, a weaker dollar triggered by  the downturn led to more international sales because the company's products became cheaper for foreign companies.

"That's why it's good for companies to export and diversify," Rajan said.

ENRECO now ships to 14 countries and exports are projected to comprise a quarter of the company's sales by next year.

Going forward, the company is planning to grow its presence in Newton.

Come July, the company will move its Sheboygan Falls office to the former Bank First National building in Newton located across the street from the processing plant.

Meanwhile, with demand continuing to increase, the company will likely increase its payroll in the coming years, which stands at 25, compared to four when it was sold in 2004.

The Newton plant now runs a single shift that processes about seven million pounds of flaxseed per year, with room for another three million. However, Rajan said demand is projected to go much higher, and the company will eventually need to increase its capacity by adding another shift.

"People are not going to stop eating," Rajan said.

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