In Winsted, Minn., Tetra Pak plant responds to high global food demand

WINSTED, Minn. — The first time Seth Teply set foot in this factory over 20 years ago, he was an intern.

On Friday he took his first tour of the place since becoming president of Tetra Pak U.S. and Canada, a billion-dollar arm of the international food manufacturing and packaging business.

Amid rows of stainless steel being shaped into processing equipment, the Glencoe native walked through his old workplace with growth on his mind. The pandemic-triggered spike in demand for food has rippled down the supply chain to benefit companies like Tetra Pak.

"Where can we quickly add capacity? Do we need to expand?" Teply said. "In the early part of the pandemic, we saw a huge surge in demand for our customers' products, because everybody was stockpiling the pantry. But what we've seen since then is a continual ramp-up."

Best known for its shelf-stable cartons used for juices, soups and plant-based milks, Tetra Pak is also a major manufacturer of equipment used for making cheese and beverages.

That's the focus at the Winsted factory, where towering stainless steel vats and precisely welded sterilizing systems are made for major food companies across the continent.

Some of the largest pieces of equipment Tetra Pak makes are produced in Winsted, like belt systems for cheese production that are able to process 40,000 pounds of cheese per hour.

The North American cheese market is expected to continue growing modestly, according to analyst reports. Demand for aseptic-packaged food and beverages — industry parlance for shelf-stable — took off during the pandemic and remains high.

"We've seen a sharp increase in the acceptance of aseptic products in the U.S.," Teply said. "Globally, aseptic products are very common, but it's been less common in the U.S. in the past. Both retailers and consumers learned during the pandemic that there's a lot of benefits to having shelf-stable products that don't require refrigeration."

Sales for Tetra Pak U.S. and Canada were $1.1 billion in 2020, about 10% of the private company's global revenue.

Globally, Tetra Pak is headquartered in Sweden and Switzerland and has more than 25,000 employees.

Teply started as a process automation engineering intern at the Winsted factory in 2001 — which was then owned by Carlisle Processing Systems — and rose through the ranks in a variety of management roles.

He moved to Texas to be vice president of services for Tetra Pak U.S. and Canada in 2018.

Last fall, while on a flight home to Minnesota, he got the call that he would be promoted to president and chief executive in early November. Only recently has he been able to get back into steel-toed boots and spend time among the 1,500 employees spread across nine sites in the U.S. and Canada.

"Hopefully COVID is starting to fade into the background; actually seeing the team and visiting sites and customers has been nice," Teply said.

While he inherits strong demand from food makers, he faces the same supply chain issues that have slowed shipments across industries.

"The production planning has become much more complicated," he said, as lead times for supplies stretch from weeks to months.

While 2021 figures are not yet available, the company expects sales growth will be on par with recent years. U.S. and Canada sales grew at a compound annual rate of 4.7% between 2017 and 2020.

About 245 people work at the 130,000-square-foot Winsted factory and office, a third of them on the manufacturing floor.

Like most manufacturers, Tetra Pak has had trouble recruiting the employees it needs to grow; the pandemic-era labor shortage only made it more difficult.

Teply said internship programs like the one that brought him aboard help fill roles, and a "focus on values" keeps them on staff.

"The people who produce this equipment here are really proud of what they do and what they make."