Kay's Naturals discontinued months after sale; Clara City plant still growing

The gluten-free, protein-packed Kay's Naturals brand of snacks and cereals is being discontinued, but the new owner will keep its Clara City, Minn., factory running.

Eden Prairie-based Milk Specialties Global (MSG) bought Kay's Processing last summer. MSG confirmed this week that it is killing the Kay's brand but said it remains committed to growing production and employment at the Clara City facility where the brand's products were produced.

"We are discontinuing the Kay's Natural brand, but we are in the process of expanding production there — we do a lot of private label business and custom manufacturing," said MSG spokesman Ben Kroeplin. "It's a shift in the business model."

Kay's began operating in Clara City in 2000 and was at one point stocking its products in thousands of stores nationwide. Last year the company employed about 30 people in the west-central Minnesota town.

The company was named the 2016 Ag Innovator of the Year by Minnesota's Agricultural Utilization Research Institute.

Customers recently started receiving notice that "the difficult decision has been made to end production of Kay's Naturals. We will continue selling until everything is out of stock."

MSG, which makes nutrition products for humans and animals and specializes in whey protein, is now poised to grow its "extruded protein" offerings. The Clara City factory, which is certified gluten-free, can take plant-based proteins found in peas, rice and soy and manufacture them into protein bars and other foods.

Kroeplin said a third production line is planned at the 96,000-square-foot plant to increase product offerings and capabilities.

"There's a lot of opportunity with extruded protein products, even beyond the snack market Kay's fit into," Kroeplin said. "We're starting to transition and take private label customers."

Some Kay's products are still available to buy online until they run out.