Litehouse Inc. President and CEO Jim Frank is the first nonfamily member to head the Idaho-based manufacturer of refrigerated salad dressings and blue-veined cheeses. In this interview, he talks about the challenges of running this employee-owned dairy business.
The world was turned upside last month for those of us in the Northern Hemisphere. It’s winter south of the Equator where Brazil hosted the summer Olympics. That gave me a different perspective on current events.
With raw milk prices low and demand for cheese, yogurt and other dairy foods high, America’s dairy processors are opening up their checkbooks to buy new equipment. A survey by BNP Market Research (Dairy Foods’ research arm) found that 56% of dairy processors are buying equipment this year and 60% plan to buy in 2017.
The city of Sandpoint (population 7,500) is in the skinny part of Idaho, wedged between Washington and Montana, and about an hour south of the Canadian border. Sandpoint is the seat of Bonner County which, at 1,920 square miles, is larger than the entire state of Rhode Island. When the Dixie Chicks sing of “Wide Open Spaces,” they could be referring to this part of Idaho.
Though some dairies saw sales fall last year, others reported increases. As they looked at the long-term prospects of the industry, businesses opened their checkbooks to acquire companies and to expand their processing capabilities.
Just as Dairy Foods was wrapping up its research into the 100 largest dairy processors in North America, the French dairy giant Danone announced it was buying Colorado-based WhiteWave Foods, a processor of organic dairy and plant-based beverages.
It was one of 12 food processing facilities nominated for the award. Dairy Foods invited the dairy industry to vote and help select the recipient. During a five-week period ending July 6, more than 3,500 votes were cast.
In 2015 Alibaba Group founder Jack Ma told a CNBC interviewer that the time to worry about next quarter was two or three years ago. If you are thinking today about what you are going to do in the next three months, you’ll be in trouble, he said.
The 100 largest dairy processors in North America clearly are planning ahead. They are building new plants and adding to existing ones, even though at least 30% of the companies reported lower sales in 2015 than in 2014. They are not going to let a one-year blip derail their plans for the future.
What’s for breakfast? Increasingly, it’s not a traditional meal of cereal and milk or bacon and eggs served at home. Instead, grab-and-go nutritional and performance drinks are a popular meal option. That’s a threat to dairy companies, especially those that make milk, cheese and yogurt.