Berner Food & Beverage: Amidst Cornfields, a Global Leader Arises

The small town of Dakota, Ill., may not be your first guess for the location of a worldwide leader in food production. Yet, from this location comes a business with decades of capitalizing on the region’s farming heritage, in-depth cheese knowledge and manufacturing prowess. Go inside Berner Food and Beverage, and you’ll see why this company is making a name for itself among the nation’s biggest food brands.

If you’ve ever cracked open a ready-to-drink coffee, or you’ve munched on some store-brand salsa con queso or aerosol cheese, there’s a good chance you were eating something that was made in Stephenson County. And you didn’t even know it.

Berner Food & Beverage, 2034 E. Factory Road in Dakota, Ill., is staking its claim as one of the world’s leading producers of ready-to-drink beverages, but you’ve never seen their label on any products, because as a private-label and contract manufacturer Berner’s job is to mix custom recipes for its big-name clients.

While its reach and its client list are impressive, there’s far more to this manufacturer than meets the eye. From its global headquarters, located on a two-lane country road between Dakota and Orangeville, Ill., in an area known as Afolkey, this producer is on a mission to craft top-quality products while also attracting some of the best talent our region has to offer.

“People come out to Afolkey, where our plant is, and they see a facility in what’s basically the middle of cornfields, and all they can talk about is the commitment Berner has made to the latest and greatest technology,” says Dan Woods, director of operations for Berner’s food and cheese division. “The high-speed lines, the amount of product this single facility puts out – the amount of technology here is amazing.”

Inside Berner’s Dakota-area manufacturing facility, six production lines run a variety of beverage and cheese-based products, from cheese dips and aerosol cheeses to ready-to-drink coffees. The company’s capabilities include a variety of flavorings and the packaging capabilities for shelf-stable or “clean label” products that are free of preservatives. A research and development team on-site crafts recipes to the client’s satisfaction while also developing in-house recipes that are ready-to-use. Meanwhile, a 700,000-square-foot distribution center on Rockford’s Baxter Road ships Berner’s products to retailers across the world.

“Our mission is to be a world-class manufacturer of food and beverages by ensuring we’re the provider and employer of choice,” says Karen McCollom, director of quality compliance. “We are committed to making everything with integrity.”

Crafting Perfection

There are two primary ways to craft a private-label food: a customer brings an idea or the manufacturer decides to enter a new market. If it’s the former, the client usually presents a custom recipe or a request for a particular taste or texture. If there’s no client request, manufacturers like Berner may set out to create their own custom recipe.

Whichever route you go, the work starts in a pilot lab like the one at Berner’s Dakota facility. Inside is a scaled-down version of the company’s production line where a team of dedicated researchers crafts just the right formulas for a successful batch.

“Berner runs a stage gate process for introducing new product where we’ll have trials and the cook room makes small batches of the customer’s recipe,” says Woods. “We do a live review with the customer and we’ll send them samples from the pilot lab. That customer will tell us they’re agreeing with it or we need to make some alterations.”

This back-and-forth process continues until the client is satisfied with the results and the manufacturer is satisfied it can produce those results consistently, Woods adds.

If Berner’s team is developing its own new products for market, the end result is a pre-formulated product, or what the industry calls a “control brand.” Clients can then send that product out under their own label, either using the recipe as is or with minor adjustments.

“They may come back and say, ‘We want it to be a little spicier, or have a little different mouth feel,’ if it’s a beverage product,” says Woods. “So, then it comes back to our R&D team and we say, ‘Well, what do we need to change in the formula to keep it shelf stable but also give the customer what they’re looking for?”

This research and development process doesn’t happen in a vacuum. As a product moves through its testing phases, there’s plenty of cross-collaboration between other parts of the business.
“I do quite a bit from a mechanical capabilities side,” says Aaron Gentz, Berner’s director of maintenance and engineering. “When we’re looking at changing or adding processes, a lot of times I’ll have input on what our equipment is capable of and what the results might be.”

McCollom’s teams focus on food safety, which is a key part of the equation when you’re working with dairy-based products as Berner does.

“I oversee the quality documentation groups,” she says. “So, we’re making sure that all of the paperwork tells the story of the product as it’s made and shows that any possible issues that came up during production were addressed in the right way. I also oversee the audits we have for food safety and quality.”

Safety and quality are cornerstones for a private-label manufacturer. With any new product, Berner teams put it through the ringer, ensuring it’s not only shelf-stable but that it also is free of dangerous microbiological contaminants.

“We have to consider the many ways that a consumer might store and/or abuse a product,” McCollom says. “We like to think it’s going to be maintained in the perfect conditions but that’s not realistic, so we have to consider whether it’s going to be left on someone’s counter or accidentally left in a hot vehicle, things like that. So, there’s a lot of data collection and we want to make sure we’re making a shelf-stable product that’s ready to drink and will give the consumer the best experience.”

McCollom believes a key part of the formula also comes from the expertise of Berner’s team and their ability to dial into the right formula.

“I think that gives us an edge,” she adds. “Some of the expertise I’ve seen here is greater than the expertise I’ve seen anywhere else, as far as dairy work or anything of that nature. I think that gives us a benefit that others may not have.”

Once it comes off the line, product goes to a 125,000-square-foot staging warehouse next door to the Dakota plant before heading to Berner’s 700,000-square-foot distribution center in Rockford, located along Baxter Road near Interstate 39. Built in 2019, the facility handles all inbound and outbound freight. It also has the ability to combine products into unique packaging, such as dual packs.

“The best quality of that building is that it has everything we need to house food product safely, and the location is perfect for our customer base to come pick things up and our supply base to drop things off,” says Woods.

An Ideal Location

Berner Foods has operated from the same rural outpost since its inception in 1943, when Arnold Kneubuehl started making Swiss cheese from local milk in his basement. For nearly 50 years, his company built a reputation for quality and product safety, and in 1993 Berner hired its first food researcher. The company soon launched a hot-fill processed cheese, using a technique where heat sterilizes the food product and its container.

“It just started growing into the little company that could,” says McCollom. “We started producing aerosol cheese in 1996 and it really took off from there.”

Within two years, the company had added a packaging technique called retort processing, which uses heat to sterilize a product and its packaging while also extending shelf life. Berner introduced canned and bottled ready-to-drink beverages in 2004 and kicked off its contract manufacturing approach to business.

The past decade has brought even more growth to the company, which was acquired in 2015 by Peak Rock Capital, a Texas-based private equity firm. Some of Kneubuehl’s descendants are still active within the company. In 2017 the Dakota plant received a 200,000-square-foot addition, and the Rockford facility opened in 2019.

Today, Berner Food & Beverage maintains some of the highest credentials and certifications in its field and has the capability of serving nearly every brand and retailer in North America, according to the company’s website. It’s also responsible for producing nearly 98% of all aerosol cheese that’s made in America, which amounts to nearly 79 million cans in a three-year period.

“I think the aha moment was when the business started getting into some of the ready-to-drink coffees, and the dips and cheese products have been really instrumental in that growth as well,” says Gentz. “Our major expansion was really about building some high-speed lines for ready-to-drink coffees, and we added a very unique snack that is only really made in this area.”

Traces of the company’s early years are still around, including Kneubuehl’s old farmhouse, which now houses corporate offices. Gentz believes today’s successes are also built upon the philosophies and commitment to quality that supported Berner’s early growth.

“The history of this business has taught us a lot,” he says. “It’s given us a lot of our standards and our integrity and the processes we have, but I think we’re also very focused on the future and where this business will continue to grow, for both our customers and our employees.”

That Berner remains committed to its original home is also telling of the company’s commitment to quality. While the location provides some “unique roadblocks,” Woods says, there are also strategic advantages to being on the doorstep of Wisconsin. Not only is this an epicenter of dairy production but it also boasts centuries of industrial prowess. Berner’s Dakota location is close enough to attract workers from Freeport and Rockford, and its proximity to major interstates at the heart of the Midwest makes it easy to distribute anywhere in the nation.

“This area has always been known for its industrial manufacturing, and there is a large skill set in this area that complements this business,” adds Gentz. “The people we can draw from our employment have a huge skill set and knowledge base, so that’s a huge benefit. The other thing is that this area is an epicenter for fresh milk, and we have the ability to very easily source all of the milk we need for our products.”

McCollom finds another benefit that comes with all those dairy farms: tribal knowledge.

“I know there are people who have grown up on dairy farms and can tell you exactly what’s going on with an issue,” says McCollom. “It might take someone else a lot more time to figure out had they not had this lifetime experience on farms, working in a dairy, or just having background experience and knowledge prior to coming here. There’s just a vast wealth of knowledge around this area.”

While that knowledge is helpful in recruiting talented employees, it’s the soft skills that truly matter in Berner’s mission to be an employer of choice for this region. Resourcefulness and the ability to work across teams are common traits in many of the company’s nearly 830 employees, says McCollom. There’s also a thirst for professional improvement, at both the corporate and personal levels.

“When employees commit to Berner, Berner commits back,” says Woods. “While they come in with the right skill set, Berner also develops those skills within its people.”

Employees are expected to engage with monthly training sessions that cover topics like food safety and food processing. And, while some topics are required for particular jobs, they’re open to anyone who wants to better understand the big picture.

“We’ve worked to increase the amount of rigor in our education around food safety and quality, and I think that’s something where, the longer I’ve been here, I’ve seen there’s just a greater buy-in from everyone at all levels down,” adds McCollom. “It’s an effort of continuous education and demonstrating how to do the right thing to make sure we have a product with integrity that they’d be OK with letting their family consume.”

The Road Ahead

Berner Food & Beverage’s growth over the past decade has put it in an enviable spot. With relationships among many of its industry’s major players, it has the potential to continue growing with those clients. That could eventually take its reach international, says Gentz, yet that’s a space filled with heavy competition.

How, then, does Berner ensure it stands out? Woods believes it starts with an age-old commitment to quality and customer service.

“Our customer base has come to trust Berner Foods to do the right thing for them, and that’s just reaped rewards,” says Woods. “We’re reaching out to other customer bases where we’re doing trials, but going forward our growth is the result of our commitment we have to our employees and our customer base. We’re showing that we are a supplier you can trust and a supplier that can deliver.”