For almost a century, Diamond Foods Inc. has been a leader in the nut business. Founded by a group of California walnut growers in 1912 as a cooperative for marketing nuts, the company has focused on building branded product lines in recent years—Diamond of California culinary nuts and Emerald Snack nuts—in addition to acquiring well-known brands, such as Pop Secret popcorn and Kettle Brand chips.
Today, Diamond Foods is now a leader in the snack food business. Earlier this year, the company announced the acquisition of the Pringles brand from Proctor & Gamble Co., which once the deal closes, would make Diamond the world’s second largest savory snack food manufacturer. The acquisition is expected to triple the company’s snack business (see sidebar, page 26).
While these brand acquisitions have translated into greater product diversity, they’ve placed greater pressures for around-the-clock demand on Diamond’s distribution centers. The company distributes snack products to more than 80 percent of supermarkets in the United States.
As part of ongoing cost management and productivity optimization, Steve Zaffarano, senior vice president of supply chain and general manager of walnut operations, and Gabe Sandoval, director of logistics, focused on the lift truck fleet because of the huge volume and the 24 hour-per-day work cycle at its 550,000-square-foot manufacturing facility in Stockton, CA.
Diamond Foods is the largest processor of the California walnut crop. The 55-year-old processing facility is one of three nut processing and packaging facilities that the company operates.
“I joined the company in 2005 just as we were filing for our initial public offering,” says Sandoval, “At that time we had a mismatched fleet of more than 60 trucks that were between five and 20 years old. Steve tasked my team to look outside the box when it came to our fleet, not only to update it but also to get ahead of the curve. With our snack business growing, we needed a more reliable fleet and my original thought was to work with a single lift truck manufacturer so we could minimize replacement parts and simplify maintenance.”
Since the majority of the fleet was fueled by liquid propane gas (LPG), Sandoval looked into Toyota Material Handling’s lift trucks as the company has a strong reputation around its LPG units. However, after careful evaluation and several discussions with Zaffarano, Diamond Foods decided to switch to a mostly electric lift truck fleet, based on cost savings, performance and environmental factors. This decision not only helped to satisfy growth and productivity needs, it also helped the company get prepared to meet the upcoming 2010 California Air Resources Board (CARB) emission standards.
“Toyota’s trucks had the lowest emissions on the market and had the variable lifting capacities that we needed in our facility. They also offered safety features that no other manufacturer had, such as their System of Active Stability (SAS),” says Sandoval.
Using technology originally developed by Toyota’s automotive engineers, the SAS is able to electronically monitor and control lift truck operations, helping to reduce the risk of accidents. When the system detects instability, it locks a hydraulic cylinder on the rear axel, changing the lift truck’s stability footprint from triangular in shape to rectangular. The resulting increase in stability reduces the likelihood of an overturn.
Believing that Toyota lift trucks could handle its increasing workload—and also save costs in the long run—Diamond Foods enlisted Watts Equipment Co. Inc., an authorized Toyota equipment dealer in Manteca, CA, to secure a new fleet of equipment in 2007.