Three generations and 100 years later, Smith Dairy remains a strong industry player.



Stroll down Main Street in small-town America and you’re likely to see a grocery store, barber shop, a hardware store and many other family-owned businesses that in most communities long since succumbed to the lure of the new mall on the outskirts of town.

All of these institutions can be found in the northeast Ohio town of Orrville in 2009, along with one more thing not often found in a downtown business district: a dairy processing plant.

But even more significant than Smith Dairy’s location is that it’s still here after a century in business as an independent company. “We’re still owned and operated by the same family for 100 years,” says Steve Schmid, president and grandson of the founder.

In its third generation of family ownership, Smith Dairy Products Co. was founded by John and Peter Schmid (regular customers called them “the Smith brothers” because it was easier to say) in 1909. The company maintains a milk plant, built in 1924, on North Vine Street in downtown Orrville - not far from the town’s other claim to fame, jam-giant Smucker’s - kitty-corner from its ice cream plant, opened in 1989. The 1994 acquisition of Wayne Dairy in Richmond, Ind., gave Smith’s its ultra-high-temperature processing plant; production from other acquisitions over the years – including the traditional ice cream business of Canton, Ohio’s Superior Dairy in 2005 – has been absorbed by existing facilities.

Smith’s relocated its corporate offices in 1992 to Dairy Lane north of downtown, where the company also built a refrigerated distribution center that was expanded about three years later. With space at a premium in downtown Orrville, Smith’s would like to eventually move all its Ohio manufacturing facilities to the Dairy Lane site. “That would be the next logical step, but an expensive one,” Schmid says, noting the company staked its first claim to the site with its fleet maintenance facility some 20 years ago. “That’s the ‘wish list.’ Specific plans aren’t ready for that.”

In the meantime, Smith’s does a brisk business manufacturing some 300 SKUs of its own fluid milk, cultured and frozen dessert products, including its Ruggles line of premium ice cream and Smith’s-branded milk in yellow light-blocking plastic jugs. With estimated annual sales of $150 million and a ranking of 70th on Dairy Foods’ latest Dairy 100, the company distributes its products throughout Ohio and portions of Kentucky, Michigan and Indiana, and also does contract packaging for major retailers and other customers.

“We try to differentiate ourselves with our yellow gallon jugs - our Super Jugs, as we call them - that protect the milk from light and have a foil seal in the cap for a bit more protection,” Schmid says. “The label is a belly-band, so it lets us tell a bigger story on the product. We try to give consumers a product that’s a little better, and I truly believe it is.”

Smith’s uses the three-legged milking stool to illustrate its mission statement. The first leg represents its customers, without whom the company would not exist. The second leg stands for the company’s associates, who must be provided with a satisfying and rewarding work environment. The third leg represents the owners, who provide the capital needed to operate and manage the business profitable for future growth.

High-quality products and excellent customer service has been Smith’s formula for success for over a century, Schmid says. “Excellent distribution is very expensive,” he says. “But if you can fill the customers’ needs with great service, you create long-term customers.”

Good service includes the little things, like having a person pick up the phone when customers call rather than an automated system, notes Steve Hines, vice president of finance. “Through the years, we’ve constantly put money back into the company, to be the best in technology, service - anything we can provide to be more efficient and serve our customers,” he says. “We’ve been willing to put that money back into the company.”

Schmid adds: “You have to be continually improving.”

Other little things that demonstrate attention to detail include improved facades on the plant to soften its industrial look in the business district, along with murals that were commissioned especially for the centennial. Colorful images depicting a horse-drawn milk wagon and an old-time ice cream parlor adorn the brick walls around the plant’s office entrance.

In fact, the company – which traces its origins back to the very first day of the year 1909 – has turned the whole year into a celebration of its history, rich heritage and commitment not only to the dairy industry, but to the community it calls home.

A formal centennial celebration was held on June 19, when the company hosted a community open house and ice cream social with family-oriented entertainment for the general public and company associates. Key customers, vendors, producers, Orrville officials and industry leaders were invited to a special luncheon.

“We wanted to set aside a day to thank those who have helped bring us to this point in the company’s history,” says Penny Baker, Smith Dairy’s director of marketing. “But we’ve been thanking consumers throughout the year with anniversary-themed promotions, coupons and special events.”

In addition, Smith Dairy has produced “Our First Century: 1909-2009,” a heritage video and accompanying book, which will be distributed to Ohio libraries and historical societies. The video also may be viewed on the company’s Web site at www.smithdairy.com.

Marketing folks tied the centennial into this year’s marketing messages that includes a “Celebrating 100 Years” logo as Smith’s stresses its heritage of quality products and commitment to community while moving forward by launching new products, making capital improvements and delving into social media like Facebook.

The Dairy in the Country

Supporting the company’s march into the future are some significant capital improvements of the past few years, including the 2005 expansion of its refrigerated distribution center – a 34,000-square-foot expansion that more than doubled the size of the existing 29,000-square-foot facility, from which Smith’s makes all its direct-sales deliveries.

This is ample capacity to handle the steady growth of the Smith’s product lines. “The cultured category – sour cream and cottage cheese – has seen some significant growth,” Schmid says. “Ice cream has experienced nice year-over-year growth as well. Some of that is due to the decision to stay in a 1.75-quart container and promote the value. Milk sales have remained steady.”

Among Smith’s newest products is the latest addition to its line of sour cream-based snack dips, Chili con Queso, rounding out a trifecta with French Onion and Zesty Onion. The company also takes great pride in its line of cottage cheese, made with a slow-cooking process and offered in large and small curd, and 4%, 2% and fat free, plus pineapple.

As one of a rare breed – the independent, family-owned full-line processor – Smith Dairy holds its own among the other regional and national brands competing in its market. “We stress being local and family owned as our corporate message,” Baker says. “And quality and service, of course. And we differentiate ourselves with packaging as much as possible.”

Looking back on his family’s century in the dairy business, Schmid notes many changes over the years. “When looking back over the past 100 years, we have survived two world wars, the Great Depression and several recessions, as well as times of prosperity,” Schmid says. “All of these events created different challenges. With this recession, we have seen changes in shopping patterns, with consumers switching from brand to private label and from organic to conventional milk, and shopping at the store with the lowest price.” 

Amid all these changes, how does Smith Dairy – and the industry overall – expect to stay competitive and relevant to consumers? “We need to remember to listen to the customer and consumer,” Schmid says. “Ultimately, it is the consumer that determines value. It is our job to provide consumers with products that have value – not always price driven, but have benefits that improve health and increase longevity and life span.”

Looking ahead, Schmid says the company’s ongoing success rests chiefly on continuing to build its team. “We need to provide our associates with the tools and training to develop their skills. This will lead to great creative thinking and continual improvements in our processes,” he says. “We will also continue to follow our mission that got us through the first 100 years by treating our customers, associates and owners with respect and dignity.”

But as Smith Dairy reflects on its long history, it keeps coming back to the one thing – especially this year – that sets it apart: longevity. And with such a strong commitment to local management and community involvement after three generations, it would be hard to argue that the self-described “Dairy in the Country” won’t still be here in another 100 years.

History

No one knows what made John and Peter Schmid borrow $300 from a neighbor to buy a dairy in Orrville, Ohio, on Jan. 1, 1909. Whatever the reason, the two sons of a Swiss immigrant took the money and purchased two horses, two wagons, an assortment of milk bottles, cans, dippers and a hand-crank ice cream freezer.

The brothers set out each day delivering about 60 gallons of milk to nearly 200 Orrville homes. The Schmids stopped at each home, drew milk from a pail and poured it into the pitchers each customer brought to them.

It was not long before regular customers began to call John and Peter “the Smith brothers” because they found it easier to pronounce than Schmid. The company then became known as Smith Dairy.

The Schmid brothers set up their first headquarters in the basement of the Congdon Building on West Market Street in Orrville. Then in 1919, they moved the business to street level at the corner of Vine and Market streets. During the next few years, the dairy was forced to move several times because it kept outgrowing its space. Finally, in 1924, the company built a new plant on North Vine Street that’s still in use today after many expansions and remodeling projects that have dramatically changed the building from its original design.

Peter Schmid sold his half interest in the dairy to John in 1914, but then returned to the business several years later. Brother William bought shares from John in 1919, and soon Amos, a fourth brother, began working with his family.

The Schmid family has maintained leadership throughout the dairy’s history. Under the guidance of William and John, the company grew and was incorporated in 1930. John was named the first president while William served as treasurer. In 1955, John’s son, Walter, took over as general manager. In 1986, the family tradition continued when Steve, Walter’s son, was named president, a position he still holds today.

The company credits its prosperity to the high standards all three generations set for excellence and continued improvement, expansion and modernization. Further, the family stresses the Christian principles that governs their personal lives has guided their actions in the business world.

In 1947, Smith Dairy joined Quality Chekd Dairies, the well-known association committed to ensuring high quality and exacting standards in dairy production. The company has earned numerous Quality Chekd awards demonstrating its long-standing commitment to excellence, including the Weber Award for overall quality and the Zimmerman Award for marketing.

The folks at Smith Dairy say their mission is to treat their customers, associates and owners according to the example of Christ. They point to the venerable three-legged milking stool as a symbol of their corporate mission:

• The first leg represents our customers. We all work to serve them. Without customers, none of us would be here.

• The second leg stands for our associates. To ensure that all of our associates treat our customers properly, we must create a satisfying and rewarding work environment.

• The third leg represents our owners. Our owners provide the capital necessary to operate our business. We must manage our operations profitably to keep our company healthy.

• The seat tightly holds the legs together in just the right way. Without a solid seat as a foundation, the legs will not support anything. At Smith Dairy, this foundation is our commitment to treat everyone according to Christ’s example, by giving our customers our best, providing them with products and service that meet and exceed their needs, and treating each associate with love, dignity and respect.

SOURCE: Smith Dairy Products Co.


Smith Dairy Timeline

1909 – John and Peter Schmid start Schmid Dairy in Orrville, Ohio
1919 – Smith Dairy established at 129 N. Vine St.
1924 – Plant built at 230 N. Vine St., still in use today
1930 – Dairy is incorporated
1935 – Smith purchases Wadsworth Pure Milk Co.
1938 – First gas-electric truck used
1945 – Square glass bottles introduced
1947 – Company joins Quality Chekd Dairies
1950 – Smith buys Rittman Dairy
1954 – First semi truck purchased
1956 – Half-gallon paper filler purchased
1957 – Dairy begins receiving bulk milk
1960 – Wooster Farm Dairy purchased
1961 – Quart machine converted to plastic cartons
1963 – Ice cream addition built
1969 – Isaly Dairy purchased
1971 – Glass bottles discontinued
1972 – Blow molding launched
1977 – Bauer Dairy and Parson’s Dairy purchased; Walter Schmid named president
1983 – New HTST system installed
1986 – Steve Schmid named president
1987 – Foil seal on plastic bottles and plastic half gallons introduced
1988 – Working agreement with Ruggles ice cream begins
1989 – New ice cream plant opens in Orrville
1992 – New corporate offices and distribution center open
1994 – Wayne Dairy UHT plant acquired
1998 – First plastic-bottle UHT in U.S. launched
1999 – Yellow jugs introduced
2000 – Stretch-sleeve labels first used on gallon jugs
2002 – Goshen Dairy purchased
2003 – Ruggles scrounds, bottled water introduced
2004 – Branch opened in New Philadelphia, Ohio
2005 – Distribution center expansion opens
2006 – Plants are certified organic
2008 – Smith’s goes “rBST-free”
2009 – Company celebrates 100th anniversary


The Smith Dairy Family Of Products

Some 300 SKUs of products bear the Smith’s or Ruggles brand name in an extensive line of fluid milk and cultured products, ice cream and frozen desserts.

The flagships of the fluid line are the yellow gallon and half-gallon jugs that block light rays harmful to milk’s flavor. They’re joined by plastic quarts and single serves, along with paper pints, half-pints and quarts. Varieties include whole, skim and 2%, plus chocolate, eggnog, buttermilk, half & half and whipping cream.

Cottage cheese comes in 4%, 2% and fat free, large and small curd, plus pineapple, in 16- and 24-ounce containers. Sour cream and dips come in similar packaging; sour cream varieties include light and fat free, while dip flavors encompass French Onion, Zesty Onion and Chili con Queso.

Smith’s premium ice cream comes in square half gallons, in 19 flavors including Chocolate Marshmallow, Cherry Vanilla, Peanut Butter Crunch and Toasted Almond Fudge. Seasonal flavors include Pumpkin and Peppermint Stick.

Frozen desserts sold under the Ruggles brand include premium, churned light, frozen yogurt, sherbet and no-sugar-added varieties offered in pints and 1.75-quart scrounds. Limited edition flavors include Pumpkin Pie and Candy Cane, while the regular lineup includes Butter Pecan, Nutty Waffle Cone and the Ohio-centric Buckeye Blitz, featuring buckeye candies and a peanut butter swirl. Novelties including sandwiches, bars and pops round out the frozen dessert offerings.

Juices, drinks and waters carry the Smith’s brand among the company’s non-dairy beverage products.