Stonyfield and Hood to Launch Organic Milk
The milk will be packaged by HP Hood, Chelsea, Mass., from its UHT plant in Oneida N.Y. and it will have a 70-day shelf life. But more than that, it will have the muscle and the marketing savvy of two of New England's most successful dairy companies.
Stonyfield Farms, Londonderry, N.H., has been asked for years to put its brand name on an organic milk, but the nation's most famous organic yogurt company was always hesitant.
"One of the reasons Stonyfield has done so well is that we've remained focused on what we do best, which is make great yogurt," says Gary Hirshberg, pres. and CEO. "Milk was an enormously different proposition. But the stars have lined up of late, because the success of organic in general has made a lot of believers out in the trade and because Stonyfield's own branding success had made a lot of believers in the trade. We have seen ourselves as a yogurt company but I have to concede that we have finally become a brand."
Being able to partner with HP Hood at a time when it is emerging as a national force, doesn't hurt either Hirshberg says.
"Hood has a very clear objective," he says. "They initially were involved in the Organic Cow business years ago and exited to Horizon Organic, until Horizon became part of one of their number one competitors. (Hood President) John Kaneb went to great lengths to persuade us that a partnership of these two New England companies could be mutually beneficial."
Stonyfield and Horizon, like other organic food companies have sort of grown up together, and have worked together from a business perspective and on environmental and community-related projects, so it may seem unusual that Stonyfield will now put a competing product on the shelf against Horizon Organic and even Organic Valley, one of Stonyfield's milk suppliers.
But Stonyfield says that the growing demand for organic products leaves room for everyone to grow. He points out too that Stonyfield has always grown at a steeper pace than the overall organic category, so he feels the Stonyfield branded milk will expand the category. Currently, sales of organic milk are up 18% over last year, and organic milk is the #2 selling packaged organic product.
Stonyfield Milk will be a joint venture, with all aspects being managed jointly by both companies, but Hood will be primarily in charge of production and sales while Stonyfield will primarily handle the brand marketing. It will be sold in both supermarkets and natural and organic food stores.
The initial introduction, expected near the end of the year, will include half gallon sizes of fat free, lowfat (1% milkfat), reduced fat (2% milkfat) and whole milk. No flavored milks are planned at this time.
Milk will be procured from organic farms across the nation. Stonyfield is hopeful that the continued growth of the organic milk market will encourage more farms to convert to sustainable organic farm practices.
While entering the milk business is a huge leap for Stonyfield, it is not without precedent. In 2002 Stonyfield introduced its line of Yogurt Smoothies which has been expanded to include YoBaby Smoothies. These products too are manufactured through a third party. Stay tuned because there may be more to come.
"We are more comfortable in beverages now," Hirshberg says. "We've been very successful there. And adding milk is consistent with a larger overall strategy."
Stonyfield, which celebrated its 25th anniversary in 2003, was Dairy Foods' processor of the year last year. In 2003 it had total sales of $144 million.