By Jorge Gonzalez-Garcia
Two California dairy farmers are finding a new way to turn the fluid milk they produce from a product they can sell at commodity prices into a gourmet product that commands a premium price from consumers eager to enhance their experience of food.
Noel Rosa and his brother, Rolland, own and operate Rosa Brothers Milk Co., based in Tulare, in the heart of the nation’s richest agricultural area. Rosa Brothers is very much a family operation, with seven members actively involved. The farm employs 35 workers, covers 600 acres, and manages a herd of about 1,000 Holstein dairy cows.
The Rosa family connection to this rich farmland goes back seven decades. “The farm was started by my grandfather in 1953, continued by my father, and now by my brother and I,” says the 47-year-old Rosa. “That’s a span of more than three generations that our family has been here working the farm and producing dairy products.”
In the fall of 2012, Noel and his brother took a big chance and built a creamery to produce and distribute specialty products like whole milk and flavored milk in glass, and premium ice cream. The idea was to distribute the products to local retailers. A small store was added next to the creamery for local visibility and direct sales.
The brothers made the move for a couple of reasons. One was in response to severe swings in commodity prices in 2009. “They can be very tough financially for a medium-sized dairy farm like ours,” Noel explains. “We needed to create more stability in terms of product, pricing and sales revenue.”
The other reason was the growth of the local food movement in his area. Rosa saw that it was picking up steam. “Our research showed that consumers preferred milk in glass bottles,” Rosa says. “They love the taste, they like that it comes from a local farm, and they support bottle recycling. What we’re doing is a natural extension of the growth of the farm to table movement right in our own area.”
A hundred miles to the northwest, in a small valley next to the river Merced near the town of Winton, lies PH Ranch, home of Top Line Milk Company. It used to be a working cattle ranch. Now it’s the dairy farm owned and operated by Paul van Warmerdam and his wife Sonya. They farm 860 acres, have 55 employees, and manage a herd of about 2,500 Holstein cows.
Top Line Milk is brand new to the specialty milk products business, having launched at the recent Natural Products West Expo 2016 show in Anaheim this past March. “I can’t really point to our specialty milk sales because we’re just starting out,” says the 51-year-old van Warmerdam. “But people at the show loved our milk, and our low and slow pasteurization method. They told us it reminded them of the taste of milk when they were kids, and milk came right off a local farm.”
Van Warmerdam and his wife had talked about expanding into premium dairy products in years past. Then came 2009, with wild swings in commodity prices. “2009 was a bad year,” he says. “We had record low milk prices and high feed prices, and a lot of people left the business.” That experience reinforced their goal of building a successful dairy business that could withstand fluctuations in the commodity market, and that they could leave to their children. Moving into specialty milk seemed like a creative way to do that.
They also considered glass bottles for their milk, but opted instead for white plastic bottles to reduce ultraviolet light exposure and extend shelf life. “We made that decision for a number of reasons,” says van Warmerdam. “We didn’t want to be the third or fourth glass milk bottle company. Also, we wanted to be able to sell into smaller convenience stores. The extra space needed to handle glass returns can be an issue. So those were all factors.”
Top Line Milk emphasizes its low and slow pasteurization process. “Low and slow is our slogan,” says van Warmerdam. “The milk comes out of our cow, we add the minimum of heat to meet pasteurization standards, and it goes into the bottle. It cannot be any fresher or tastier than that. And that was our goal from the beginning.”
Van Warmerdam is now looking to build out his distribution network. “We would like to grow regionally to the Bay Area, and then Sacramento and Fresno,” he says. “We’re in a niche market, so our rollout will be slow and strategic.” Closer to home, he plans to take advantage of traffic passing by his place by setting up a drive-through window for a couple of hours a day so customers can buy directly.
For Noel Rosa, wholesale growth has been solid. “In our first full year of creamery operations, we grew from zero to 70 retail outlets,” he says. “And we won new product of the year in 2013 at the Fresno Food Expo. That gave our sales a boost.” This year Rosa Brothers is selling product in 225 stores in its area.
Industry insiders do not see explosive growth for the specialty milk market, and they caution against unrealistic expectations. “We project slow, steady growth for this segment of the market,” says Murray Bain, Vice-President for Marketing at Stanpac, the large Canadian container manufacturer which supplies bottles to premium milk producers. A California Dairy Advisory Board report for 2015 shows that milk in glass bottles amounted to less than two percent of total sales for the entire state.
Noel Rosa understands the challenge of operating profitably in a niche market. And he takes the long view that as long as there are customers who prefer milk in glass, support the farm to table movement, and are willing to pay a little more for premium quality, he will have buyers for his products.