The focus on local, healthier, and transparent represents opportunity for dairy producers who want to market their own milk. While the effort is not for everyone, it is attractive for entrepreneurs who know they produce a superior product, have a knack for marketing, and are committed to finding their niche.
Anyone who has taken the plunge knows the learning curve is huge. Recouping an investment takes time. The hours are long. The business of dealing with consumers day-in day-out is very different than dealing with cows and crops. But there are rewards. There is opportunity to develop a sustainable business for future generations. There is opportunity to develop a business that fulfills your mission and is adorned with your personality and special touches.
The Jersey Journal visited with three Jersey breeders across the country who have been processing their own milk for many years to get their thoughts on their businesses and their customers. Though their herds, target audiences, and approaches are different, their raw material is the same—delicious, nutritious milk produced by the environmentally friendly Jersey cow.
Participants
The Kilgus family established the Kilgus Farmstead Country Store as a means of bringing additional family members into the business. The Kilguses raise Registered Jerseys, Boer goats, and Berkshire hogs on land that has been in the family for generations. The dairy herd was established in 1958.
Kilgus Farmstead, Fairbury, Ill.: Kilgus Farmstead is owned and operated by Paul Kilgus and his nephew, Matt, and Paul’s sons, Justin and Trent, and their families. The Kilguses have a long history of providing food for the community, beginning with Paul’s father, Duane, who owned and operated a grocery store in town and then established Kilgus Dairy with his wife, Arlene, in 1958. The Kilguses milk 160 Registered Jersey cows and practice seasonal rotational grazing. In the summer of 2009, they built an on-farm creamery and farm store as a means of bringing more family members back to the farm. In the process of developing their business, they discovered no one else in the state was bottling milk on the farm. The family also raises Boer goats and Berkshire hogs.
Larry and Debbie Stap, left, operate Twin Brook Creamery with their daughter and son-in-law, Michelle and Mark Tolsma, right. Also pictured are the Tolsma children: Levi, Ethan and Makenna in front, Jacob and Samantha behind, and Isaac with Michelle. The bottling business was established in 2007 to enable Mark to join the business.
Twin Brook Creamery, Lyndon, Wash.: Twin Brook Creamery is a fifth-generation farm now owned and operated by Larry and Debbie Stap and their daughter and son-in-law, Michelle and Mark Tolsma. Larry’s great-grandfather, Jacob Stap, purchased the land in 1910 and he and his wife, Tryntje, and their four children cleared the land and framed a house and barn to establish the homestead. The bottling business was launched in 2007 to enable Mark to join the operation. Twin Brook manages a herd of 250 Registered Jersey cows.
William and Loly Lesher, left, operate Way-Har Farm Market with their family. Pictured with them are their children and significant others, including Josh Lesher, back left, Laura and Trenton Styczynski, center, Olivia Lesher, third right, Daniel DeShong, second right, and Jaylene Lesher. The market is known for its ultra-delicious ice cream and out-of-this-world baked goods.
Way-Har Farm, Bernville, Pa.: Way-Har Farm Market is a third-generation country store established by brothers Wayne and Harold Lesher in 1970 as a means of stabilizing finances in a period of high interest rates and volatile prices. Today, Wayne’s son, William, and his wife, Lolly, have taken over ownership of the farm and retail/wholesale business and get a help operating it from their children. The family is further developing Wayne’s vision to sell to the community and bring local products to his neighbors. The Leshers milk a mixed herd of 230 Holsteins, Jerseys, and Brown Swiss on a farm that has been in the family since 1952.
Questions
What products and services do you offer?
Kilgus: Our non-homogenized fluid product line includes whole milk, 2% milk, skim milk, chocolate milk, heavy cream, and half-and-half. We make eggnog seasonally and mixes for soft serve and hard pack ice cream. As well, we raise and sell beef, pork, and goat. Products are sold in our farm store and retail outlets across Illinois. In our farm store, we also sell other local products, like yogurt, cheese, honey, jam, and jelly. Our soft serve ice cream is a draw for many people from town.
We also offer farm tours in the spring, summer, and fall and typically book several group-tours each week for the farm and processing plant. Twin Brook: We only process fluid milk as whole, 2%, 1%, skim, heavy cream, half-and-half, chocolate, strawberry, and eggnog in season. Whole milk is far-and-away our #1 seller. Milk is low temperature (vat) pasteurized, not homogenized, and sold in refundable glass bottles. Way-Har: We sell our own milk, ice cream, cheese curds, and yogurt in our farm market. We cater weddings, corporate functions, and other events and offer an ice cream making experience where customers can design their own flavors. We also offer farm tours and are in the process of adding a “guest cottage” to our brand. The adventure combines the farm experience with overnight accommodations. Way-Har ice cream is featured on the Ice Cream Trail developed the Visit PA and the state Department of Agriculture. We also sell wholesale, delivering products four days a week to restaurants, bakeries, and other farm markets.
Who are your customers?
Kilgus: We have a mix of customers and accounts. A small portion of our milk is sold wholesale through retail outlets. Here, our milk sells best when it is positioned in the health food section, where consumers with deeper pockets and an interest in local and healthy tend to shop. Our biggest clientele today, though, is coffee shops. This market has been growing every year and is now a valuable outlet for a variety of products and steady source of income. Twin Brook: It took years for us to get established. Part of the ordeal is dealing with a business mindset that asks: will you still be here tomorrow? Our first customers were a couple local businesses that gave us a chance. Through thick and thin, we provided a quality product. Once other businesses saw our commitment, they came on board, and we grew our base
Today our customers are different. Our main customer makes cheese, yogurt, and other dairy products at home. A secondary group is looking for minimally processed foods. A third group wants to support local businesses and know how their food is produced. A fourth group of customers have issues digesting conventional milk but, for a variety of reasons, do not have those negative side effects with our milk. Way-Har: Much of our business is driven by our location along a major highway (Route 183) in Bernville. We see our regular local customers during the week, and then a much more diverse clientele on weekends. The weekend crowd is not concerned about prices, rather they are looking for unique products and experiences. Three years ago, reduced fat and skim milk were our biggest sellers. Today, customers are buying more whole milk and whole-fat flavored milks than any other fluid products.
How much of your income does the processing business represent? How much did it represent when you started?
Kilgus: When we were getting the creamery off the ground, the first year was especially rough. We did not make income for quite some time. It was a USDA value-added producer grant that helped us develop key marketing messages and gave us the boost we needed to eventually become profitable. Currently, about 25-30% of our yearly income comes from the creamery. Twin Brook: Today we process all our own milk. But it was incremental steps to get here. Before we processed, we milked 200 cows and shipped milk through the Northwest Dairy Association to Darigold. To get a start in bottling, we separated milk from eight cows into a separate tank. As we grew demand, we increased cow numbers that contributed to the tank. It took work and was complicated and expensive, but we reached our goal to process 100% of our milk five years later. We are now milking 215 cows and processing 1,500 gallons of milk (55 lbs. milk per cow per day) per day, five days a week. Way-Har: The farm market is a separate entity with its own balance sheet and profit and loss statement. However, it does inject cash into the farm account to help stabilize low milk prices. We bottle 25% of our total milk production for the dairy store and sell the balance through our milk cooperative.
What do your customers most appreciate?
Kilgus: Most folks say they appreciate knowing where their milk comes from and how it is produced. They can tour the farm, visit the country store, and see first-hand, from start to finish, how the glass of milk on their dinner table came to be. They also express an appreciation for the hard work and dedication that goes into producing a glass of milk or scoop of ice cream. Twin Brook: Outside the health and yield benefits, I think our customers really appreciate the taste of our milk. Often, when we set up in-store promotions and hand out samples, a customer says, “That is the best milk I have ever tasted.” Way-Har: Our farm market is loaded with pictures of the farm and family. We get lots of compliments from customers. Often, they say they like seeing images of the family farmers who bring them their food. We also get thank you notes from reminiscers, who sum, “We remember coming here as kids. We are so glad you are still operating an old-fashioned farm market.”
Who do you view to be your competition? How do you set your product apart?
Kilgus: We have found a nice fit between lower-priced conventional and higher-priced organic brands of milk. We set ourselves aside in both markets by being a single-source, farmstead, non-homogenized bottled milk. As well, the Queen of Quality emblem sets our milk apart as being 100% Jersey. Our milk is produced using non-GMO feed and is local for most of our customers. Twin Brook: The beauty of this business is that there is room for everyone. In some ways, anyone who processes milk is a competitor. However, our goal is not to cannibalize other sellers but reach a different market. Within a half mile of us is another dairy that bottles their own milk. They use plastic milk jugs. Another dairy a mile away also bottles. They are organic. Each of us provides for a different customer.
We differentiate our milk as low-temp pasteurized, Jersey milk, in glass bottles. As well milk is sourced from a single farm, not commingled with others, and customers can trace production from field to table. We raise most of our own roughages and grow non-GMO feeds as that is what our customers ask for. We are certified kosher by the Va’ad HaRabanim division of greater Seattle. Way Har: We do compete with a few newer local ice cream shops for the after-sports crowd. But, for the most part, we strive to be Way-Har and do our best at making delicious, premium ice cream and delightful baked goods that draw people in.
What is your biggest surprise? What did you not expect when you began the journey?
Kilgus: When we began this venture, we knew nothing about selling product direct to consumers. We thought everybody in our town would buy our milk once we started processing. We quickly realized this was not the case. Though some consumers were willing to pay more for our local product, most purchase on price point. This shocked us, but we soon gained a better understanding of buying habits and were able to adjust our target outlets accordingly. Twin Brook: Our biggest surprise was how little we knew about processing and marketing. We thought people would flock to buy our product and stores would open their doors to us. That never happened and we have since learned the importance of quality, marketing, and community.
I am also shocked at the sheer number of customers who do not return bottles, even when they carry a $2 deposit and can be easily returned. Last year, for example, we had to supplement returned bottles with 460,000 new ones. Way-Har: In our farm store, we play a video that tells the story of our family and farm. We discuss our love of showing cows and providing high quality dairy foods to the community. The video is on a loop and will run for 45 minutes until it restarts. We are always surprised customers will stand for 30 minutes or more to watch and learn about the dairy farm and the family.
What avenues do you use for promotion?
Kilgus: We have a Facebook page and a farm website. When we first started our venture, we made a lot of cold calls to drum up interest as well. In the Chicago food scene, word of mouth is our best way to promote our product. Twin Brook: Almost all demand is generated through word of mouth. We use social media, but on a very limited basis. Our customers are our greatest salespeople. Way-Har: We use some social media and an advertising agency to help created and place Google ads and manage our website. We also donate products and gift baskets to various causes to promote our products to new customers. As well, the local farm city organization has loads of great programs in which we participate.
Do you have a promotion plan in place?
Kilgus: We work with a local family-owned grocery store on promotions to move milk when we have excesses. We honor promotion requests for other outlets as well when they ask. Each June, we coordinate with our local Farm Bureau Young Leaders group to host Breakfast on the Farm at Kilgus Dairy. This event is very popular with customers and a great way to get visitors to the farm to learn about the dairy community. Twin Brook: We are just beginning to get back in stores with the easing of the pandemic. Eggnog season will be upon us soon and this is our best chance of returning to some sort of normalcy. In the past, we have had a full schedule to accommodate in-store promotions and displays for the holiday season. Way-Har: In addition to our social media accounts, we own a billboard that we use constantly, and work with the local radio station for spot promotions and special events.
What is your biggest challenge in making the venture profitable?
Kilgus: Because we have no other outlet for our milk, our biggest challenge is balancing farm production (supply) with milk sales (demand). So many factors out of our hands affect both, so striking a balance is a struggle. We have some accounts we can short if our supply is short, but we do this only when necessary. If we are long on milk, we skim the milk and sell the cream. If we are extremely heavy on supply, we sell milk to a ranch that will buy it at a discounted rate to feed calves. Generally, we sell to the calf ranch just a few times each year. Twin Brook: Generating enough volume to return our investment is our greatest challenge. We invested a lot of capital and way underestimated how much it would cost to set up a Grade-A facility, largely due to regulations and legalities. We initially thought $75,000 would get us up and running. It was closer to $250,000 before our first bottle was even filled. We started bottling in 2007 and did not break even until 2013. I advise anyone heading down this path: set an estimate, then double it and add 50%.
Also know your market. For us, distributors are not our market; stores are. We needed to develop relationships with stores to get product on the shelves. Way-Har: For businesses of every kind, finding key staff is a challenge, but critically important. We are blessed to have a great and devoted team to help us grow the business. Retail is a challenge in so many ways, so you must enjoy working with people—lots of them—to have a successful retail establishment.
