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New Chip on the Block

Mahnomen, Minn. — Companies vying in the competitive snack-food market won’t succeed with half-baked ideas. A new Minnesota venture is eager to show its fully-baked potato chip will fit consumers’ taste and provide a big economic boost to an underserved area.

Mahnomen Baked Chips, LLC’s new 30,000-square-foot plant will be the nation’s first to produce baked, stackable potato chips when it’s fully operational this fall.

“This has never really been done before,” says project consultant John Smart, who is supplying technology and equipment for the venture. The baked-chip market is one of the fastest growing in the food industry, but until now, all stackable chips have been fried.

In late 2006, Smart and others approached AURI scientist Charan Wadhawan to help formulate a recipe for baked, stackable chips. After several attempts, they made a prototype that would appeal to potential buyers.

“We were successful in developing the basic formula for a baked, formed chip,” Wadhawan says. “But the next step was scale-up.” Before food distributors will commit to marketing the chips, they must be produced on a large scale. Since no other food manufacturer is making this type of chip, investors decided to build a plant.

A community investment

Mahnomen Baked Chips is a limited liability company formed by the Midwest Minnesota Community Development Corporation, a nonprofit organization that provides capital for community and business development. MMCDC, majority owner of Mahnomen Baked, invested $8.5 million in the concept.

“More than anything, we wanted to demonstrate that a private enterprise can succeed in areas where people aren’t often willing to take a risk,” says MMCDC President Arlen Kangas.

Mahnomen is in the heart of the 800,000-acre White Earth Indian Reservation. MMCDC is committed to investing $20 million in projects on the reservation by 2020.

“We are making this investment in the community, and we’re hoping others will follow,” Kangas says. “This can give confidence to others to locate on the reservation.”

Potatoes and people

The Mahnomen Baked Chips plant will provide needed jobs as well as value-added markets for the region’s potatoes.

The chip-making process begins with potato flakes that are mixed with other ingredients to make dough. The dough is then formed into sheets of uniform thickness. Chips, called blanks, are cut from the dough sheet, placed on a mold and sent to 90 x 280 foot ovens. Once baked, the chips are salted, seasoned, packed, sealed, then are ready to be shipped.

The plant will produce up to 3,600 canisters of baked chips per hour or 27 million per year. Kangas says about 55 employees will be needed to run the plant.

“This is definitely good for Mahnomen’s economic growth and … will also, hopefully, provide value- dded opportunity for locally grown potatoes,” says Wadhawan, who adds that she is helping “develop other types of baked chips with superior-nutritional values.”

Kangas says Mahnomen Baked Chips hasn’t determined if it will private label chips or be a contract producer for a major marketer. Either way, many northern Minnesotans hope the sweet taste of success comes with a little salt.