The new wave of designer probiotics may have given the cultured segment a needed boost in the past few years, but the folks at Anderson Erickson Dairy have been in the trenches for about five decades making yogurt that tastes great and is good for you.
“It raised awareness of the whole category,” Warren Erickson, AE’s chief operating officer, says of the boom ushered in by products like Activia and DanActive. “It solidified where we were at. We always put acidophilus and bifidum in our yogurt, so it showed how innovative we were from the start.”
Erickson is third-generation family management at the Des Moines, Iowa-based processor, grandson of the founder and brother of Miriam Erickson Brown, president and chief executive officer, who through her work with the International Dairy Foods Association and MilkPEP has become something of a wandering minstrel for dairy, singing the praises of its nutrient richness.
“We get more technical questions now,” Brown says of recent consumer feedback. “Things like, ‘What cultures does your yogurt contain?’ Before, it was just about flavors.”
And certainly, AE is not shy about launching new flavors, offering perhaps the widest variety of yogurt flavors of any cultured processor – combinations like Peach Cobbler, Blueberry Buckle, Cherry Vanilla and, most recently, Apple Bread Pudding. Right now, there are at least 50 yogurt flavors coming out of AE’s plant on University Avenue in Des Moines, among the overall 300-plus SKUs of products including fluid milk, cottage cheese, sour cream and dips.
“It’s good to rotate flavors and add some new ones. There’s definitely been a net addition,” Erickson says, swapping grins with Brown in their ongoing tongue-in-cheek battle over yogurt SKUs running rampant in the company’s portfolio.
Other recent new flavors include Limon Crème Torte, which Brown says was based on a dessert she enjoyed at a Cheesecake Factory restaurant; French Vanilla Bean (“I was eating French vanilla ice cream and thought, bingo!” Brown recalls); and Peach Cobbler. “We worked really hard on it so you can taste the buttery cake note at the end,” Brown says of the latter.
AE aims to use the best ingredients for a genuine taste experience – fruit chunks rather than purees, for example. “Our philosophy is, if you’re blindfolded, we want you to know what berry you’re eating,” Brown says.
General sales manager Bill Sharp says consumers are looking for new flavors as the supermarket’s yogurt section continues to grow. “When we market them, they go fast,” he says.
But perhaps more important than great flavors is the underlying nutritional fortress of yogurt and other dairy products, and few have been beating the drum as loudly as Brown. In fact, she testified before the U.S. Senate Agriculture Committee this past spring on behalf of IDFA to drive home the importance of milk and dairy products in all school nutrition programs, and dairy’s role in lowering childhood obesity rates. “I ask the committee to be sure to balance nutrition standards with what kids will eat,” Brown told senators. “We encourage you to set school-wide nutrition standards that include milk, yogurt and various types of cheese as valuable and important components of a child’s healthy diet in schools.”
Brown likewise cautioned against guidelines that are overly restrictive: “Nutrition standards applied to individual foods may put nutrient-rich foods such as yogurt cups and cheese sticks out of the reach of our children. The dairy industry has invested in extensive research and development of new ingredients and products that minimize added sugars and allow for a variety of fat levels.”
Flavored milk needs a “makeover” for schools, Brown says, and many processors are struggling with formulations that meet strict standards for fat and sugar content while still offering a great-tasting product that kids will want to drink.
Meanwhile, AE has found new outlets for such products. “We’re selling chocolate milk to coaches as a recovery drink instead of Gatorade,” Sharp says.
Despite industry-wide efforts to trumpet milk’s awesome powers, Brown says there’s still much educating to be done. “Many consumers think protein is something you chew, and that’s not always the case,” she says. “Instead of focusing on what to avoid, we should change the focus to nutrient richness, where it needs to be.”
Home economicsAs the nation grapples with the economic slump, AE is looking to it as an opportunity to stress the nutritional value of milk.
“It gives you a platform to talk about the total nutritional package of dairy,” Brown says. “We’ve really worked on that on our Web site and with our store sampling team, training them on the nine essential nutrients.”
Inwardly, the company has sought to cut costs and improve efficiencies without sacrificing product quality. “You have to be efficient,” Erickson says. “Dairy has always been efficient by the nature of the business. Geography is a big deal now.”
Among the efforts is training drivers on techniques to conserve fuel when driving their trucks, which at AE burn a blend of diesel fuel and soybean oil.
Beyond using recyclable containers, AE’s sustainability efforts also include using milk crates made from reground plastic; washing its crates and trucks with recovered water; and recycling water used for rinsing cottage cheese to sell it to frozen-food manufacturers.
The current low milk prices threaten the future of the industry, AE’s management warns. “We’re at a low point right now,” Brown says. “We need a way for processors and farmers to work together.”
With word arriving near press time of a new record herd-culling by the National Milk Producers Federation’s Cooperatives Working Together, to offset huge producer losses, the industry could sorely use a boost in demand. True to form, AE is doing its part to help make that happen.
“We’ve worked with our ad agency in Texas to implement a spherical branding strategy that involves defining the key attributes of the AE brand,” says Kim Peter, director of marketing. “It starts with the fact that AE is family owned and operated, and is committed to producing the absolute best in dairy. This strategy has a direct tie to what makes each of our flagship products unique, and our focus on innovation, which keeps dairy interesting and appealing.”
The focus of the company’s consumer messaging is moms as the family’s “CNO,” or chief nutrition officer, who has to balance health with taste. “We make sure moms understand that not all milk and yogurt is the same,” Peter explains. “There is a difference in the freshness, taste, ingredients, processes and packaging that add up to a higher standard. AE Dairy is the local source, and we don’t skimp when it comes to great taste. We take every opportunity to highlight these points and share the good news of dairy’s role for health and nutrition.”
In this way, AE is able to meet head-on a heightened consumer awareness of digestion and weight management issues, on its Web site, in radio and TV ads, and one-on-one contact through in-store sampling. “There are a lot more niche products. It’s made consumers more informed,” Brown says. “It’s perfect for us because we provide what they’re looking for in a flavorful way.”
Despite the current troubled waters, Brown foretells an exciting future for AE and the industry.
AE’s growth historically has been built upon its brand, slowly and steadily, by paying attention to consumers’ wants and needs (less than 15% of AE’s output is for co-packing clients). “It takes longer to build by consumer demand, but it sticks,” Brown says. “There are some core things that haven’t changed. One of the pillars of our brand is innovation. We’re not going to change our packaging all the time, but we’ll come up with new flavors that meet a need and fulfill a trend.”
The company’s latest marketing slogan – Ridiculously High Standards – mates well with AE’s core mission. “Our consumers play that back to us. We get interesting stories – love letters, Miriam calls them – especially from people who have moved away and miss AE products,” Peter says.
And while there are no plans to extend distribution to serve Iowa’s expatriates, the idea is tempting, Erickson admits. “We could sell a little product across the whole country, I’m convinced of that,” he says.
But a firm commitment to its products, not to mention the brand and family’s good name, precludes anything that might compromise quality. “Our promise as third-generation family members: We don’t skimp and we’re not going to,” Brown says, noting that great products have the ability to reach across conference tables as well as kitchen tables. “It’s so cool when a customer leans over at a meeting and says, ‘I had your chocolate milk this morning.’”
HistoryAnderson Erickson Dairy was founded in 1930 by Iver Erickson and his boyhood friend, William Anderson, who pooled their resources to purchase an existing Des Moines dairy for $15,000. There were more than 150 other dairies in central Iowa at the time, so competition was fierce.
In 1938, Anderson sold his interest to Erickson, allowing his name to stay with the company. The following year, the company constructed a processing facility at East University and Hubbell avenues in Des Moines. For the next decade, AE’s stock in trade was fluid milk, first in square glass bottles, then paper cartons in 1948. That same year, the company launched what became its flagship product, Old Fashioned Cottage Cheese, which would be hand-packed for more than five decades.
AE entered the Kansas City market in 1979 through an Iowa-based wholesaler. Consumer demand eventually led this operation to evolve from a single truck unloaded in an empty parking lot to a fully staffed office and distribution facility. This market grew to account for 25% of AE’s total sales.
In 1991, the company opened its new corporate office complex on University Avenue adjacent to its plant. By the end of the decade, the company employed 500 people and distributed products in its core marketing area of Iowa, Kansas, Missouri, Nebraska and Illinois (with some crossover into Minnesota and South Dakota). To handle the ever-increasing output, AE christened a new four-story cooler, capable of holding more than 100,000 cases of product, in 1999; the system was automated two years later, and within five years, the cooler needed a 20,000-square-foot addition.
AE lays claim to numerous dairy industry innovations: the first to provide double safety-sealed packaging; the first to package frozen yogurt for grocery sale; first to introduce a fat-free, dairy-based yogurt with added soy protein; and first to put photos of missing children on milk cartons.
The second and third generations of Ericksons own and manage the dairy: Iver’s son, Jim, who serves as chairman; grandson Warren, the chief operating officer; and his granddaughter, Miriam Erickson Brown, the president and chief executive officer.
AE is one of a dwindling fraternity of independent dairies in the United States. The company was 66th on Dairy Foods’ annual Dairy 100 processor ranking in August 2008, with reported sales of $155 million.
The AE Family of ProductsAnderson Erickson Dairy offers a full line of dairy food products, but its passion and creativity seem to shine best with its extensive selection of yogurt.
Available in low-fat or the fat-free, sugar-free YoLite variety, every cup of AE yogurt contains acidophilus and bifidum, which help boost the immune system to fight infection and disease and promote healthy digestion. YoLite selections also include prebiotic fiber.
Some of the more interesting flavors include Blueberry Cheesecake, Key Lime Pie, Lemon Chiffon, Orange Pomegranate, Peach Apricot Vanilla, Strawberry Rhubarb Pie, Piña Colada, Strawberry White Chocolate and Vanilla Latte.
AE has long been known for its cottage cheese as well, offering Old Fashioned, Lowfat and Healthy All Over non-fat varieties. Mr. E’s Garden Vegetable Cottage Cheese, named for company chairman Jim Erickson, is a seasonal variety that’s blended with carrots, sun-dried tomatoes, green pepper, onion and garlic.
Rounding out AE’s cultured department is sour cream and various sour cream-based dips, in regular, light and fat-free versions, the latter with added acidophilus and bifidum. The company trumpets its longer processing method to achieve better flavor and texture without added gelatin. Dip flavors include French Onion Garlic, Mexican Style and Party.
Regular milk is available in whole, 2% 1% and skim, plus Sweet Acidophilus 1% Lowfat Milk and Healthy All Over Fat Free Milk with live active cultures. All AE milks come from cows not treated with rBST. AE’s chocolate milk, made with a blend of three cocoas, comes in 2%, fat free and fat free with Splenda. The Icy Cold To Go 12-ounce plastic bottle line includes white, chocolate and strawberry milks; orange juice; lemonade; and eggnog (when in season). Buttermilk, half & half and whipping cream round out fluid selections.
Finally, AE’s Family Style ice creams (co-packed off site) offer 14 flavors including chocolate, vanilla and Van & Bon Bon, named after two Des Moines radio personalities.