Phil Ejercito
Tera Johnson begins the tour of her one-of-a-kind organic whey processing plant at its back entrance, in front of a double-wide delivery bay. Here, on busy days, 20 tanker trucks roll in to deliver up to a million pounds of the sloshy cheese byproduct.
Wisconsin Specialty Protein, which opened early last year, occupies an eight-acre section of the Reedsburg industrial park, strategically located in the middle of exceptionally productive dairy country and a carefully protected network of Baraboo River Valley wetlands.
"The landscape architect who worked on this project, his dad studied with Aldo Leopold," says Johnson, a Madison-area resident. "He got very excited when I asked him to implement native landscaping on a hardcore manufacturing site. He drew a plan that looks a bit like Eden."
Johnson waves toward a landscape that supports a pair of nesting cranes. "See that tall grass?" she asks. "That's an industrial-strength rain garden designed to handle all the stormwater on the site."
She notes that the city of Reedsburg, like Madison, imposes a stormwater utility charge based on how much runoff a property owner generates. "We don't have to pay it because of how we landscaped. People think green is more expensive. Not necessarily. It actually costs us less to have the rain garden."
It's innovative thinking like this that has earned Johnson more awards than she has time to hang on her office wall. Wisconsin Specialty Protein's $14 million processing facility won a gold medal award in the green building category as an Associated Builders and Contractors of Wisconsin 2009 Project of Distinction.
Last February the Wisconsin Department of Commerce and the Wisconsin Entrepreneurs' Network added Johnson's business to its list of Wisconsin Companies to Watch. That same month, the Dairy Business Innovation Center presented Johnson with its Annual Innovation Zone Award for both her energy-efficient building and her newly launched line of "teraswhey" protein products.
Johnson, 49, is a mother of three who lives in Fitchburg. Her son is a math whiz burning his way through doctoral work at Stanford. Her oldest daughter is a medical student at the University of California-San Francisco. Johnson helped her set up Sacha Yaku, a nonprofit organization that works with villages in Ecuador to create potable water systems. Her youngest daughter is a college sophomore at UW-Madison majoring in classics.
Just about every aspect of Johnson's new company is a gamble on innovation, from where she gets her whey, to how she processes and sells it. And that has a lot of folks pretty darn impressed.
"We are always trying to find value-added opportunities for both farmers and processors," says Jim Cisler, a dairy consultant with the Wisconsin Department of Agriculture, Trade and Consumer Protection. "Tera came up with a great idea."
Whey is the liquid left over when milk is curdled into cheese, and it has always been a thorn in the side of cheesemakers. It used to be treated as a waste product and was often poured onto fields just to get rid of it.
But whey is a nutrient-rich broth that can boost unwanted algae growth in neighboring lakes and streams. Plants like Johnson's recover those nutrients so they can be put to valuable uses.
Nutritionists have long known that whey contains a superior source of protein - better than eggs, milk, cheese or meat. But there's a catch: Whey is 94% water, 5% lactose (milk sugar) and contains only 1% of the primo protein. All that water and sugar makes it hard to deliver the powerhouse goods in an efficient form.
Though California has passed Wisconsin in total milk and butter tonnage, Wisconsin still leads the nation in both cheese and whey powder production. There are at least 10 whey processing plants around the state, producing almost a third of the 10 million pounds of dry whey sold each week in the U.S.
Extracting the paltry portion of precious protein from the liquid whey requires a large-scale industrial process, but it's worth it. Cheesemakers now count on whey for 10% of their income.
Before Johnson opened her plant, organic and specialty cheesemakers were taking a beating. While they pay a premium for specialty milk, there was nowhere to sell their costly whey at a correspondingly premium price.
When Johnson was running White Clover Dairy, a cheese plant near Green Bay, she felt the organic cheesemakers' pain.
"We made our whey into animal feed," she says. "When we started making organic cheese, we mixed the organic whey in with the non-organic. There was no market for organic whey. Everyone in the state making specialty cheese had the same problem."
In launching Wisconsin Specialty Protein, Johnson's to-do list included building a green whey processing plant to serve specialty cheesemakers and creating high-tech manufacturing jobs that can't be offshored. She also wanted to be an environmental steward of the plant site and offer a product that makes consumers healthy and happy.
No problem! Four years after conceiving the idea, she can now put a check mark after every item on her list.
But it's been a long four years. And Johnson gives much of the thanks to a California-based whey consultant named Barry Murphy, one of a handful of independent whey experts in the country.
"I flew to San Francisco and had lunch with him," recalls Johnson. "We drew the factory plan on a napkin. I wish I had kept that napkin!"
Moving beyond the napkin stage meant making a business plan and raising money, which took two years. "We needed a bank that understood agriculture and food processing," says Johnson, who was rejected by several large national banks. But Baraboo National Bank came through for her.
"We started a business in the teeth of the worst of the recession." Johnson says. "That was a time where nobody was doing anything."
Mike Molitor, plant project manager at Wisconsin Center for Dairy Research, notes that many people in the dairy industry had doubts about Johnson's business model. But she's proving them wrong by making good niche products - like a naturally low-fat whey made from goat cheese - and marketing them well.
And Murphy is confident that Johnson is on the right track. "In the general organic market for dairy, there is only a penetration level of 2.5% so far," he says. "From Tera's perspective, we haven't even scratched the surface yet."
Wisconsin Specialty Protein now serves nine small southwestern Wisconsin cheese plants, including Carr Valley, Cedar Grove, Westby Creamery and Woolwich Dairy. One of her producers, K&K Cheese in Cashton, actually receives some of its milk in metal cans that Amish farmers deliver in horse-drawn wagons.
Sid Cook, owner of Carr Valley Cheese, buys his milk from 35 local family farms with herds of fewer than 75 cows each.
"We used to sell to another company that used our whey for animal feed," he says. "We were shipping 100 miles. Now it's just 12 miles to Reedsburg. And you think about what it does for the community - the jobs and the plant, and the contractors hired to build it. Then there are the truck drivers who are driving short distances instead of 300 or 400 miles a day. Now they can be home with their families. It just builds community."
Johnson says opening her business in Wisconsin meant being able to hire people with experience in manufacturing as well as "someone who had a pasteurizer's license and had worked in dairy before."
Local dairy expertise went into the plant design as well. Each tanker truckload of whey can be different from the last, such as organic, goat cheese or kosher. To keep each type of whey separate requires seven different silos.
Until Johnson came along, says the state's Cisler, goat and sheep cheese whey were "not available anywhere in the U.S. or even in the world." Now she has enough volume to foster ongoing sales.
All the whey Johnson uses is rBGH-free. rBGH, or recombinant bovine growth hormone, was first synthesized by Monsanto in the early 1990s. Concern about potential side effects led to its being banned in Canada, Australia, New Zealand and most of Europe. Although the Food and Drug Administration has declared food products from rBGH-treated cows safe for human consumption, a U.S. market has developed for rBGH-free foods.
Johnson is also riding the wave of environmental awareness. Her plant is hoping to become the nation's first Leadership in Energy and Design-certified dairy manufacturing facility. It uses almost no municipal water to clean its 14 miles of stainless steel pipe because engineers developed systems to purify and reuse the leftover whey water for this purpose.
"Tera is very environmentally savvy," says Don Lichte, chair of Reedsburg's Industrial Development Commission. "She likes green."
Johnson also likes to show visitors what makes her plant so green. "It's funny," she says. "People come to see the plant, and they want to see the solar panels and wind turbines. That is the perception of what green building is, but we don't have any."
Instead, the plant integrates simple but clever green features, like controls that automatically turn lights off when not in use. Its most innovative green feature is how it recaptures heat, using the flue gas that comes out of its boiler stack at over 400 degrees to preheat the chamber of its drier.
"This winter we had a day when the temp outside was zero," recalls Johnson. "When we turned on our heat recovery system, the air in the dryer went to 230 degrees before we added any energy. And our dryer is 65 feet tall. That's a lot of air that needs to be heated."
It's an ongoing balancing act throughout the whey drying process to remove excess water but avoid high temperatures that would ruin the quality of the protein.
"We do a lot of heat exchange to raise and lower temperatures in the plant," says Johnson. "The result of those things is we use about 40% less energy than a typical whey plant would. I'm really proud of that."
Walking through the main room of the Reedsburg plant is a little like visiting Willy Wonka's Chocolate Factory, but without the Oompa-Loompas.
To keep everything running as efficiently as possible, the entire operation is computerized. Johnson runs the plant with just three people per shift. She is up to 16 employees now because whey can arrive and must be processed at any time, and the plant runs 24/7.
Tankers of whey are pumped into the appropriate silo as they arrive. It first goes to a separator that shakes out the last bit of butterfat. After that, it is pasteurized and taken through an ultrafiltration process that pushes the water and sugar through finer and finer membranes. This allows the relatively small lactose molecules to pass through with most of the water, while retaining the much larger whey molecules. At the end of this stage, the whey protein concentrate is the consistency of molasses.
Next it is piped up to the top of the 65-foot drying tower and sprayed as a fine mist into heated air. What hits the bottom, 15 seconds later, is a powder ready for bagging.
Most of the powder is sold in 20-kilo bags, joining the 80 billion pounds of dry whey on the open market sold each year in the U.S. That market demand is driven by infant formula, meal replacement beverages, protein bars, bodybuilding formulas and baked goods. There are also specialty applications, including hospital and recovery diets, some yogurts, and whey crisps in cereals and snack foods.
Besides bodybuilders (see sidebar), Johnson is aiming to plug into a new market segment - baby boomers who are inevitably beginning to experience the natural muscle loss that comes with aging. Another huge market is dieters, who seek to lose fat but not muscle.
Beyond that, says Johnson, "You would not believe the research that's coming out about the benefits of whey protein. Diabetes, heart disease, cancer, HIV, wounds, burns and muscle atrophy in the elderly. Whey like ours is the best dietary source of an amino acid precursor to glutathione, our body's major antioxidant. It's amazing, really. It makes the body-building benefits look like a blip."
The crown jewel of Johnson's business is teraswhey, a branded product designed to be sold directly to the public in elegantly labeled foil pouches. That makes her the only whey producer with her own label.
Johnson unveiled teraswhey at Canoecopia in Madison in March 2009. While giving samples and getting feedback at an improvised display table she made out of her own kayak, she found a whole new market in health-conscious campers.
"Our first bulk sales were in April of last year," Johnson says. "It took another eight months to get our own custom product out." She anticipates bulk sales of $6 million this year and hopes for half a million in sales of teraswhey.
Though some of the biggest users of whey protein drinks in the country are bodybuilders and other highly focused fitness types, Johnson chose her ingredients and image to carve out her own sustainable health niche.
"In the whey business, protein drinks have either scientific or uber-masculine, macho names," Johnson says. "teraswhey is personal. This differentiates me. It's my name, which means earth, and then there is the pun on the word whey. Whey people make puns all the time, and the name teraswhey is a double pun. Yeah, it was the right name because we are doing the natural thing."
Johnson bypassed flavors like strawberry in favor of yumberry used in Chinese medicine, wolfberry from Tibet and her new hot seller, pomegranate cranberry goat whey protein.
"I went for antioxidants," she says. "I chose my fruits to get functionality out of the flavors."
Johnson also tweaked the two classic flavors: Her vanilla is Bourbon Vanilla, and her chocolate is Fair Trade Dark Chocolate. "People like teraswhey because it has no additives," she says, "and it's sweetened with low-glycemic-index stevia, a sweet-leaved tropical herb."
Johnson's first wholesale customer was Madison's Willy Street Co-op. "I love that," Johnson says. "I've shopped at Willy Street forever. It was a great day."
"We sampled it and found it was very good," says Lisa Stag-Touc, the co-op's health and wellness manager. "It was awesome knowing she was gathering the whey from local dairies. It sells very well. We started selling it last September, and it's out ahead of all the other whey proteins on the shelf."
An even bigger coup was pleasing the buyers at Whole Foods. "We are now in every Whole Foods district in the nation, and Whole Foods is like a billboard for us as we spread around the country," Johnson says. "What happens is we will be in a Whole Foods, and once we get that exposure, people from that part of the country find our website and start ordering online."
For Johnson, the journey has only just begun. "We are in our infancy in terms of what we currently do out in the marketplace," she says. "But the cool thing for me is that what we do has a lot of layers to it.
"Part of my goal is to inspire other people to create companies that take a responsible approach to the environment, create products that are healthful and support the small-scale farming that is so important for us to preserve. There are a lot of products that could speak to people like our whey protein does, and I hope we'll see more and more of them right here in Wisconsin."
What bodybuilders know about whey
Whey protein is the gold standard of protein supplements for bodybuilders because it contains the best-known combination of amino acids essential for muscle growth. In the muscle market, whey is often mixed with other supplements like testosterone and given names like "Monster Mix."
One website coaching readers preparing for a Mr. Olympia pose-down advised, "A breakfast of eight egg whites and two cups of oatmeal is good, but 20 grams of whey protein shake, three whole eggs and a plain bagel with jelly is better."
Whey protein has the highest protein efficiency ratio (a figure that comes from dividing the gain in body weight by the weight of protein consumed in infant laboratory rats) of any protein source. Its biological value for incorporating protein into the body is unrivaled.
K.J. Burrington, who handles dairy ingredient applications for the Wisconsin Center for Dairy Research, says bodybuilders have long used whey.
"They know that whey contains the highest level of the branched-chain amino acids, leucine, isoleucine and valine, which are metabolized directly in muscle," she says. "The other amino acids in proteins must be digested before they are available for use. This makes whey protein more immediately ready for muscle building and muscle repair."
Some research also suggests whey protein may help kill pain, enhance the immune system and play a role in bone growth.
Maybe Little Miss Muffet had it right.
