Oak State Products is a force to be reckoned with in the competitive contract manufacturing world. The proof is in the product. But what gives its cookies their monster appeal?



Sesame Street’s favorite furry blue Muppet might be eating more carrots these days, but if Cookie Monster were to set foot in Oak State Products’ Wenona, Ill., facility, he’d be reminded of what “C” really stands for. The well-known contract manufacturer was built on cookies, starting back in 1952 when it served as an Archway franchise. The company reinvented itself in 1956 as Oak State Products. Back then, “we had some really good bakers and processors,” recalls Steve Goulding, chairman of the board. That said, he adds, “we still do.” As recently as 1999, Oak State’s products included mostly soft cookies and inclusions for ice cream, which the company still produces to this day. However, with those lines, the company wasn’t meeting capacity.  “A good week was 22,000 packages,” Goulding notes. To bolster production, Oak State delved into new product development and began working with President Baking Co. of Augusta, Ga. (now owned by The Kellogg Co.’s Keebler brand). The venture turned out to be quite memorable after Goulding met the client’s vice president, Dave Van Laar. Today, Van Laar is president and CEO of Oak State. Having worked on both sides of the business, Van Laar has been a driver in taking the company to the next level. Oak State now produces baked goods for many of the best-known cookie and bar brands on the market. The company offers a full range of wire-cuts, toppings, coatings, chocolate swirls and filled products, as well as frozen (not par-baked) offerings, chocolate-enrobed cookies and cake-like sandwiches, says Van Laar, who calls the research and development staff very “versatile.” As a result of this line expansion, the Wenona plant currently is at more than twice the capacity it was almost 10 years ago and does six or seven times the tonnage. Oak State, adds Van Laar, has been “truly blessed with excellent customers,” which “makes life so much easier for both sides.” Easy and fun, that is. After all, Goulding says, “If it weren’t fun, we wouldn’t be here.”

Shelf-Life Solution

Part of the enjoyment for Oak State is bringing something new to the market. In fact, “our charter has been baking solutions through innovation,” Van Laar says. For example, it was in the early ‘80s - following the “cookie wars” - that Oak State made the switch to contract manufacturing. It began by producing fat-free products with 5-6 months of shelf life, which was “unusual in the cookie business,” Goulding notes. There was only one problem. The cookies hardened as soon as the packages were opened. Oak State came up with a solution: its own shelf-life extender (SLE). It took a couple years to develop the proprietary blend, but the company has been making and using it ever since. Wisely, Oak State has chosen not to reveal the process or ingredients behind this innovative ingredient by going through the formal patent process. Sometimes, it’s best to keep something special locked up safe. “You’re better off with a trade secret,” Goulding says.

No Worries

As a contract manufacturer, Oak State is full of secrets, including the ones it keeps for its valuable customers. The company’s biggest concern is making those clients happy and worry-free. To that end, the sweet goods producer shows clients how it has everything from sanitation to quality assurance under control, Goulding explains. A small but experienced staff of engineers and reliable suppliers make this possible, he adds. Thanks to a well-built reputation, Oak State doesn’t spend much time “stumping for business,” Goulding says. Instead, it’s in that lucky position where customers come to the company for solutions. As members of the board for The Biscuit & Cracker Manufacturers’ Association (B&CMA), Goulding and Van Laar keep in close touch with both customers and vendors. Many of their employees have gone or are going through the B&CMA’s two-year correspondence course, which is designed to train a new generation of professional bakers, Van Laar points out. In addition, Oak State’s plant undergoes inspections eight times a year by AIB International and other organizations. That’s because as a contract manufacturer, “we’re held to a higher standard,” Van Laar says.

New Developments

The high standards continue in product development. Just as it takes a village (or a fictitious street on PBS) to raise a child, so does it take a team to develop a new stock-keeping-unit (SKU). At Oak State, that team consists of six to 12 people, including product development engineers and quality controllers. Once approached with manufacturing a proposed concept or existing product, the group comes together to discuss issues such as moisture content, how big the product’s going to be and how many items there will be to a package. The team also looks for ways to extend the shelf life (perhaps by using its SLE) and otherwise enhance the product while saving the customer money, in addition to consulting suppliers about possible ingredients. In short, it’s Oak State’s job to listen to the wants and needs of the customer and provide input. However, a contract manufacturer is not unlike a barbershop where clients come for service, Van Laar parallels. In other words, “it’s still their product,” so we give them what they want, he says. Another product development challenge is packaging. One element driving Oak State’s business right now is individually wrapped packages that enable consumers to, say, “put a healthy snack in your briefcase,” Van Laar suggests. The company’s first individual pack line started up in 1995. Today, every line in the plant has that capability. In fact, the Oak State facility has more than 30 single-serve wrappers. (Turn to “Sweet Success” for details.) One reason Oak State may have developed such a strong reputation in the contract manufacturing niche is because of its confidentiality and integrity. According to Van Laar, the company will not work with customers looking to knock-off products already in production. “If it’s even close, we won’t even talk about it,” he asserts. Price point and quantity also are deal-breakers. Oak State is not in the business of making commodity products such as 99-cent cookies. Nor does it normally find it cost-effective to produce items in volumes of less than 1 million pounds per year, for example. It also avoids investing in short-term products, Goulding adds. Oak State instead refers these customers to another local contract manufacturer, just up the street in Wenona. As a result of its focused approach to production, business is booming for this industry veteran. Today, Oak State’s list of clients includes newcomers that weren’t even on its radar two years ago, a true sign of its expansive growth.

Service with a Smile

As with most companies, “it’s the people at Oak State that make the difference,” Van Laar says. Many employees have celebrated 40-year anniversaries with the company. One actually worked 35 years without missing a day, Goulding notes. Talk about dedication. It’s Oak State’s “treat people right” philosophy that helps retain employees, Van Laar notes. He adds that his workers have “a great Midwestern work ethic.” For example, most of them live within 25 miles of the plant, meaning that some commute up to an hour each way every day. Despite this, it has been hard for Oak State to find, hire and train the numbers it needs to be fully staffed, a dilemma facing many manufacturers today. (Turn to Engineering Management each month in Snack Food & Wholesale Bakery magazine for columnist Jeff Dearduff’s perspective on the plight of the modern bakery.) Oak State advertises via radio, TV, newspapers, billboards and industry magazines in its efforts to fill machine operator openings and other positions. Although the company’s plant now is highly automated - on one line, no one touches the product from the oven to the shipping case - there still is a need for trainable help. The result is fewer workers making more money, Goulding summarizes. The employees Oak State does hire are trained through an in-house program that takes hundreds of hours. “It’s been expensive, but well worth it,” Van Laar says. There is a payoff for well-trained employees, who may be named project leaders and get to travel to visit vendors as part of a larger team. Recently, a line supervisor was given this opportunity, Van Laar notes. “She did an excellent job of trouble-shooting,” he says. Of course, there’s no real trouble to shoot at Oak State, whose burgeoning cookie business is responsible for a number of innovative products now on the market. Despite these innovations, good old-fashioned chocolate chip remains the most popular variety out there, Van Laar notes. And few companies bake them better than Oak State, making this successful contractor the real cookie monster. Omm nom nom nom!