Western Regional Report

Dominating Dairies
by Pamela Accetta Smith
Western processors pack a punch.
Dairy production in the western United States has been in a phase of rapid expansion for quite some time now. In fact, this region is responsible for producing an abundance of some of the country’s finest dairy products.
Western dairies definitely make for a dynamic and growing industry that reaches into foodservice and manufactured food products, as well as retail dairy products.
There are many factors that contribute to the success of these Western processors.  For one thing, the increase in milk production, especially in the nation’s top milk producing state of California, is perhaps one of the biggest trends behind the burgeoning dairy market in this region. To that end, may experts say dairy farming in the West is different from other regions of the country in that its systems are able to make a bit more money.
The healthy milk supply is a major reason many Western manufacturers are investing in new facilities or making improvements to existing ones. These companies have made tremendous capital investments over the past few years, in new plants, distribution and marketing. They have grown in sophistication and power, and by the looks of things will continue to do so.
The western United States is home to many pioneers indeed, especially when it comes to dairy foods and beverages. What follows is an exploration of some of the Western region’s dominating dairies.
Royal Crest Dairy Inc. Denver, Colo.
Royal Crest Dairy is a family-owned and operated home-delivery business that has provided milk to consumers in Colorado’s Front Range for nearly 80 years. With a long history of commitment to Colorado’s quality of life and some of the finest healthful dairy products available, Royal Crest has grown from a small operation in Denver to include sales and distribution centers in Colorado Springs and Longmont.
The company’s new state-of-the-art processing facility in Longmont opened in December 1999. The plant, an estimated eight times the size of Royal Crest’s previous processing facility, is reported to be one of the most functional and appealing manufacturing sites in the industry.
Royal Crest home delivers more than just milk. The company offers more than 25 additional products including eggs, cheese, butter, bread, orange juice and bottled water. The product mix comprises mainly private label items but also includes brands such as Coffee-Mate, Silk and Starbucks. Seasonal items such as lemonade and eggnog are also available.
Royal Crest All Natural Milk is rBGH-free and, when tested with organic milk, meets or exceeds organic standards for pesticides, antibiotics and growth hormones, says Julie Bailey, marketing manager. Furthermore, the company’s bottles are reusable and recyclable. To that end, says Bailey, Royal Crest has received numerous environmental awards and was recognized in 1999 with a Colorado Ethics in Business Award by the University of Denver.
Though not available in retail stores, Royal Crest All Natural Milk — when tested in a recent independent consumer survey — was preferred over other brands by more than 50 percent of the respondents, says Bailey.
Chocolate milk dominates as the preferred flavor among Colorado consumers, says Bailey, adding that Royal Crest processes 2% chocolate milk for home delivery in half-gallon, one-trip bottles.
“The opaque white bottle is completely recyclable,” she says. “And the chocolate milk is made with real vanilla and approximately 16 pounds of real chocolate per 100 pounds of milk, creating a genuine favorite with our customers.”
An additional line, Farmer’s All Natural Milk, is distributed in select retail outlets in the Front Range. This product is also packaged in an opaque white bottle to minimize the harmful effects of light during transportation and storage. The milk is available in gallons, half gallons, quarts and pints.
Royal Crest owns and operates 17 milk convenience stores under the Farm Crest All Natural Milk label.
Promised Land Dairy San Antonio, Texas
Promised Land Dairy (PLD) is famous in its marketing area for producing healthy, high-quality milk products that taste great, says Gordon Kuenemann, executive vice president.
“PLD milk comes exclusively from Jersey cows, making it naturally 20 percent higher in calcium and 10 to 20 percent higher in protein, depending on the time of year, than other milks on the market,” he says. “In addition, PLD milk is available in a wide range of flavors, anywhere from the extraordinary Mooberry Blueberry to the time-honored classic Midnight Chocolate. And since we believe milk should remain as Mother Nature intended, we never add artificial hormones, ensuring the product is 100 percent all natural and hormone free.”
Consumers in the Western region, says Kuenemann, appear to be excited about, and place a great deal of importance on, higher-quality, all-natural products. “As a result, they thoroughly love our milk, and we are excited to be able to give it to them.”
Sales do indicate every region tends to adopt a favorite flavor, says Kuenemann. “For example, Peaches ‘N Cream sells particularly well in the Southeast, while Midnight Chocolate is always a favorite in all regions, especially the West,” he says.
Due to customer demand, the company recently reintroduced half-gallon sizes for three of its most popular milks: Whole White, Reduced Fat 2% White and Fat-Free White. As part of an extensive research effort to bring the half-gallon bottle back to its customers, Promised Land Dairy took a hands-on approach by designing its own exclusive mold of a PET plastic bottle. The company says the bottle was specifically designed for PLD milk and will provide its customers the same outstanding taste, freshness and quality they’ve come to expect.
Designed to fit easily into a refrigerator door, the new half-gallon PET bottle also features a twist-off cap that will keep the contents fresher, increase shelf life and, like glass, not alter the milk’s flavor. “We are excited about this endeavor because we custom-made the mold for the container and we designed it to be as effective and easy-to-use as possible,” says Kuenemann. “A new twist-off cap was also introduced on the new half gallons, which allows the milk to stay fresher longer. It is so well received that we are making all of our products with a twist-off cap.”
The increasingly high price of milk for consumers has dramatically impacted the dairy industry as a whole, says Kuenemann. “For Promised Land Dairy, higher costs of ingredients and transportation have had an effect on business, but the company has been able to work through these issues in order to provide our loyal customers the products they love.”
While adopting a reduced-carbohydrate lifestyle has been a popular trend, PLD hasn’t seen its milk sales dramatically effected by this craze. “We think this is most likely because people still appreciate a high-quality product like our milk,” says Kuenemann. “However, we are looking into some opportunities that will allow us to offer carb-conscious consumers a great new product through PLD milk.”
Although currently not operating in the school-vending channel, the company does recognize the importance of dairy in children’s diets and realizes the significance of this increasingly popular venue. “Since PLD milk is higher in calcium and protein, it can considerably help kids get the nutrition their bodies need,” says Kuenemann. “We are always looking into future opportunities and this is certainly an area we are considering.”
United Dairymen of Arizona Tempe, Ariz.
Incorporated in 1960, United Dairymen of Arizona (UDA) is a flourishing agricultural milk-marketing cooperative. Its founding, through a merger of two dairy associations, ensured a stable market for dairy producers and an adequate supply of fresh milk and dairy products of the highest possible quality for consumers.
UDA’s membership consists of 88 producers, averaging 1,200 head per dairy, representing about 90 percent of the milk in the state. Although smaller than some in terms of membership, UDA ranks 13th  among the country’s 200 dairy cooperatives and is in the top 100 out of 48,000 cooperatives nationwide.
UDA’s modern manufacturing facility in Tempe operates 24 hours a day, seven days a week, to produce high-, medium- and low-heat nonfat dry milk (including vitamin-fortified products), cream, skim milk, condensed skim milk and lactose powder.
The latest addition to the product line, milk protein concentrate (MPC), makes UDA one of the only two manufacturers of this product in the United States. “We also supply the raw milk for a cheese manufacturer on site,” says Frances Lechner, member relations manager.
UDA’s plant, says Lechner, can process 10 million pound of milk per day and regularly acts as a balancing plant for other processors in the region. “It also is the largest supervised kosher milk facility in the country, capable of producing over 1,000 metric tons of kosher powder within two weeks,” she says.
Employing approximately 185 full-time personnel, UDA is among the few remaining full-service dairy cooperatives in the country. “We offer our members installation, emergency repair, preventive maintenance, transportation services, chemical equipment and pharmaceutical supplies,” says Lechner.
The West’s unique role, says Lechner, is to maintain a heavily individualistic “frontier” state of mind with influences from a variety of other cultural and ethnic groups. The region, she says, boasts a blend of traditional country fare, with steak and beef houses dominating the food scene.
But, Lechner says, ever-popular Mexican cuisine and other ethnic selections are giving beef a run for its money. “The universities attract a diverse student population, so food choices in grocery stores and restaurants are more diverse, including Asian and Middle Eastern influences,” she says.
The weather in the Phoenix area — or the “Valley of the Sun,” as many call it — is ideal for living, traveling, doing business, shipping product and producing milk, says Lechner. “UDA’s members have successfully overcome summer heat challenges with high-tech solutions so that production can be predicted with a high rate ­of accuracy,” she says. “In addition, the availability of empty trucks simplifies shipping to and from the region.”
According to Lechner, UDA’s strong financial position, agility in the marketplace and consistent high-quality products make the cooperative ideal for joint ventures and creative business relationships.  df