NY Branded Milk!
An Interview With Dean Sparks of Empire Organics
Interview conducted by Liz Bawden
Added August 1, 2009. Amidst the worry and upheavals in the organic dairy industry, a new brand was launched this spring. Enter Empire Organics, the organic milk from a group of New York farms packaged and sold in New York. Responding to consumer desires to support local farms and minimize
the carbon footprint of their food, their products can be found in over 100 retailers. And it’s growing.
Empire Organics has been the passion and project of Dan France and Dean Sparks for over 7 years. We had a chance to talk with Dean about their new entrant and his insight into the realities of the organic dairy industry.
Q: Please tell us a bit about the beginning -- the niche you saw
emerging, the gaps that needed filling, unexpected hurdles, your
passion for high-quality organic food.
A: Dan and I spent about 7 years doing the homework about organic farming, organic food, and all things in between. We did some distribution of local products at one time. I took a job as the Grocery Manager at Green Star Cooperative Market in Ithaca, NY for a couple of years. We learned about brokers, turnovers, slotting fees, and retail headaches. We studied. Dan has been milking 70 cows organically since 1996, so he certainly brought the farmer perspective to the table.
The one constant was the retailers wanted to support local, organic products. This was true from Buffalo to New York City. Everywhere we went, consumers and retailers told us over and over that a local brand is exactly what they wanted. We just had to figure out how to get it to them. In addition, we wanted high quality. Dan and I learned to enjoy good food, and we still believe that quality has to be the benchmark of any brand.
The distribution piece was complicated, but for us the most difficult task was finding a dairy processor to work with us. Most dairy processors that have contracted work for the major brands (Horizon, HP Hood and OV) were required to sign exclusivity agreements, so they are not able to process for anyone else. Finally, after many years, we joined forces with an Upstate Niagara Cooperative to process our fresh organic milk. That ball started rolling April 1, 2009 and it hasn’t slowed down since!!!
Q: What are the products you are supplying now?
A: Currently we do Nymilk in gallons and half gallons and in three fat levels (whole, 2% and skim). We also launched Nycheese in May with 4 varieties of 8 ounce retail-ready cheese (raw milk cheddar, monterey jack, pepper jack, and colby).
Q: What products are in the pipeline for future development?
A: We have an organic farmer raising 4,000 hens for Nyeggs to launch in September, and Nyogurt will also be rolled out this fall. We have expedited our schedule in order to help us use all the milk that we possibly can... we know that farmers are losing markets now and they have only two choices ... go conventional or go out of business ... and we don’t like those choices. Developing and innovating is the thing to do in a tough economy. The more farms we can save the better.
Q: How do you source your milk? How many farms (or how many cows) ship their milk to you or do you buy on the “spot-market”?
A: There is a cooperative of 22 farms involved in the project now. Most are located between Rochester and Buffalo.
Q: We hear much about the competition between the “Big 3” (referring to Horizon, Hood, and Organic Valley) over market share in the supermarkets -- what has been your experience in introducing another brand of organic milk?
A: Well, this is a loaded question! Here’s what we KNOW: things are not NEARLY as bad as people think they are (in our business) and retailers are clamoring for good quality local food that they can source in abundance. Being both local and organic gives us a leg up. Many of the national brands are shipped across the country and travel thousands of miles from farm to shelf. Our products minimize the carbon footprint and assure consumers that they are supporting small family farms in New York State. Nycheese is competing against an organic cheese brand in Wisconsin; this really helps us gain some traction.
Q: Your website states that you have taken a stand to hold your payprice to farmers for at least 2 years, even though most other organic milk buyers have cut the price and are reducing milk through reduction quotas or cutting off farms. A Lancaster Farmer article states your pay price to farmers is $32. Can you confirm this and comment on how you are able to weather the economic storm without passing it on to your farmers?
A: The cooperative is offering a $27 base price, and with volume and quality premiums they can earn $32/cwt. We feel very strongly that this price will continue to hold steady throughout the economic downturn. One of the benefits we have is low overhead. Dan and I work out of our homes and have no employees.
Q: Roughly how many locations offer your products for sale in NY?
A: At present, we have about 100 retail outlets carrying our products, but it grows everyday. In addition, we have some restaurants, cafes and other establishments using our products. It’s very exciting.
Q: This is a rough time for many dairy farmers, seeing the stability
of the organic market begin to erode. What are your thoughts
for the future of the industry?
A: We see it very differently. Corrections in supply will be made, and they will be painful, but certainly the organic industry will survive and continue to grow. We see consumers who are willing to make adjustments in their spending WAY before they adjust their food choices. Once they buy organic and believe in it, they will drive a lesser car or sacrifice in other areas of their lives in order to
ensure they can continue to buy and support organic farmers and the products that they make. We see this more so in young married adults who are doing all they can to make sure their children eat
healthier organic food on a regular basis.
We still see retail prices on milk holding very, very well; certainly in New York. The market in the Northeast is being robbed by private label import brands from the West. We see private label milk in
many retail chains that are plant coded from Colorado, Arizona, etc. We know that the proposed pasture rule would assist in limiting this issue, but we cannot afford to wait. We need legislative action to invoke the federal market pool payment for all processors shipping finished fluid product into the Northeast. Organic farmers need to work together to alert their politicos to begin to legislate against this nonsense. It is really frustrating to see shelves and shelves full of organic milk that came to New York via tractor trailer from out West while farmers in the Northeast continue to lose markets.
The surplus of organic milk certainly was somewhat due to industry leader’s inability to see the slowing in the 20% annual growth we had grown so accustomed to enjoy. To suggest that dairy
industry gurus were supposed to see the economic recession coming is a little far fetched. No one saw it coming. There are, however, some things we can do immediately to increase usage of Northeast organic fluid milk. We need to demand that action be taken against Aurora Dairy and others that are milking huge herds and shipping finished products into the Northeast and skirting their responsibility to pay into the pool. This may seem like a small issue, but it gives them a significant advantage in retail pricing, and creates a false sense that buying a local grocery store chain organic milk must be supporting local farms near the store. It simply is not true.
Most farmers in the Northeast do not realize that their organic fluid surplus could and should be utilized in the private label business. The plant capacity exists in the Northeast. The contracts exist. The fluid milk exists. What needs to happen is that exclusivity agreements need to be reviewed and discarded in advance of any quota systems being implimented. We get calls every day from retail chains looking to move their organic milk production into the Northeast. Someone should figure out how to capture that business, even if it means swallowing their pride a little bit. It should be about saving farms, not saving face.
Q: Do you have any advice for a farmer who may want to enter the value-added side of the business?
A: This “overnight success” was seven years in the making! For farmers to assume they can immediately enter the natural/organic food channel and be a huge success may be a mistake. These things take time, money, and more effort than you ever thought you had. We have invested tens of thousands of hours in developing relationships with retailers, distributors, and consumers. This is real work, and there is no “get rich quick” scheme. You have to do your homework, understand your market, and develop products that can meet the needs of all those involved in the chain. Cornell has spent millions (maybe even billions) trying to work with farmers and retailers to get value added working, and they have come up mostly empty....this is really a grass roots effort, in that you need to spend quality time with your potential customers to truly appreciate what they are looking for. Then you have to go out there and get it made in the quality and volume that makes sense to satisfy their demands. Sometimes it just takes a couple of farmers to get things done!
We see opportunity for farms to diversify their production in order to increase their bottom line. Adding a flock of organic birds, for example, brings an additional revenue stream to the farm. Nyeggs
are just the beginning, and we see some value added opportunity in those type of projects. Even some direct marketing at Farmers Markets might be of some value, especially in the pasture raised meat arena. We see a lot of demand for these type of things.