Old Home Foods invests in technology and intellectual capital

With a reputation for producing and distributing some of the highest-quality and best-tasting cultured dairy products in the upper Midwest, Old Home Foods Inc., St. Paul, Minn., one of the few independent, exclusively cultured dairy product manufacturers in the country, is committed to culture in terms of both product lines and leadership. This is exemplified by the company’s recent investment in manufacturing and packaging technologies to competitively participate in the burgeoning drinkable yogurt/smoothie category, as well as in intellectual capital so that it can maintain the company philosophy of being a high-performance work system.

Off to a booming start

Established in Minnesota in 1925 as Old Home Creameries, founder Francis Davies sold 11 lbs of cottage cheese on his first day of business. By day three, he sold 90 lbs. Within five years, the company employed 30 people and owned a fleet of 14 trucks to produce and distribute more than 1 million lbs of cottage cheese annually. In 1950, the company expanded its product portfolio to include yogurt, with sour cream and dairy dips following shortly.

A local fluid milk processor, Peter Arthur “P.A.” Hanson and his sons purchased Old Home in 1960. Today, P.A.’s grandson Rick holds the title of CEO. He hired Geoff Murphy, an experienced yogurt operations veteran from General Mills Inc., Minneapolis, in 1998. In September 2002, Hanson named Murphy to be company president. Murphy is the first non-family member to lead Old Home Foods.

“All of our employees are involved in the decision-making process of the business. It’s part of the Old Home Foods culture,” Hanson says. “To be a successful independent, you need to empower your employees and let them know they are critical to success.

“The leadership team we now have in place has the ability to innovate and execute rapidly and effectively,” Hanson says. “This has helped us achieve record results, including the distinction of being Minnesota’s No. 1 brand in cottage cheese and dairy dips.”

Dave Holdsworth, v.p. of sales and marketing, says, “For the 52-week period ending Nov. 3, 2002, which correlates with our fiscal year that ends on October 31, retail data from Information Resources Inc., shows that in the Twin-City area, the Old Home Foods brand had approximately 39% share in the cottage cheese category, which was up more than 2 share points from the previous year.

“The Old Home Foods brand leads the dairy dip category with more than a 44% share, which is nearly the size of the No. 2 and 3 brands combined,” Holdsworth says.

“The Old Home Foods brand is a competitive leader in sour cream and yogurt. It had more than a 34% share in sour cream, and was up 3 share points,” Holdsworth says. “Old Home Foods is the leading regional yogurt brand (more than a 20% share), battling Dannon for the No. 2 spot in this market.”

Murphy adds, “Of all the competitors in the market, Old Home Food’s base volume grew the most. In fact, Old Home Foods sold four of the top five volume-turning yogurt products—the 32-oz cup-set container—in this time period.

Next month the company will roll out its new low-fat yogurt smoothie drink line, which is possible as a result of its investment in the latest beverage research, development, manufacturing and packaging technologies.

“The line is targeted to health-conscious adults, and will be supported with extensive TV, radio and outdoor advertising,” says Holdsworth.

Murphy adds, “We have aggressive plans to expand distribution, and the smoothie line will enable us to do accomplish that.” The smoothie line comes in five varieties—orange cream, peach, raspberry, strawberry and strawberry banana—and is packaged in 10-oz HDPE bottles covered with a full-body, shrink-sleeve label. Like all of Old Home Foods’ production lines, the beverage line is available for contract packaging.

Hanson adds, "The new Yogurt Smoothie line continues Old Home's history of innovation. Given our extensive experience in developing fresh, all-natural cultured dairy products you can be sure there will be more great products on the way!"