Legacy in Motion
March 1, 2007
Legacy In Motion
by Pamela Accetta Smith
Joseph Gallo Farms combines agricultural devotion, total integration and highly productive cheese processing to pave the way for future generations.
Although that headline seems like a mouthful, never have words been more true. During Dairy Field’s visit to the Atwater, Calif.-based company, it was very clear that these innovative folks are most definitely committed to every word.
Long recognized for its quality products and its environmental leadership, Joseph Gallo Farms is a family-owned, fully integrated farming, dairy and cheese-producing enterprise. The company has won many prestigious awards for its eco-friendly farming practices. It generates much of its own electricity by processing cow manure and other wastes through a sophisticated methane digester system.
Joseph Gallo Farms is also the first and longest-standing cheese producer nationwide to be granted government approval to label its products with “No Artificial Hormones.” Cows producing milk for Joseph Farms® cheeses are not treated with any artificial hormones, including the controversial rBST/rBGH.
“The decision to become hormone-free came to me from consumers. We were getting consumer letters and we wanted to give them what they wanted,” says Mike Gallo, chief executive officer and co-owner. “I came to realize there were a lot of people who didn’t want hormones in their food products. I also spoke with veterinarians and determined it was just not healthy to inject the cows with it. So the decision was really twofold.”
With approximately 250 SKUs in all, the company’s products include natural cheeses — primarily cheddar (mild, medium, sharp and extra sharp), Monterey jack, pepper jack, marble jack, marble cheddar, mozzarella, Colby, longhorn and Muenster (other varieties including Joseph Farms-branded Swiss, American and provolone are co-packed). All varieties are packaged in a range of sizes and styles — chunks of all sizes, shreds, slices and balls for the company’s mozzarella. Joseph Gallo Farms also produces and sells whey protein isolate through a joint venture with Saputo in 20-kilogram bags as a food ingredient.
Cheeses are distributed mostly through supermarket chains, wholesale clubs and independent retailers and distributors in the western, southwestern and northeastern United States, plus Mexico. The company utilizes both a direct sales force and a network of brokers to represent its products.
Most of the cheeses produced by Joseph Gallo Farms are now certified kosher, adding yet another quality distinction to its product line. Produced under the strict rabbinical supervision of OK Kosher Certification, Brooklyn, N.Y., most Joseph Farms brand cheeses are certified kosher and proudly bear the familiar Circle K Dairy symbol. “We are pleased to be partnering with this important cheese producer,” says Rabbi Don Yoel Levy, Kashruth administrator. “This makes a large line of high-quality cheeses available to kosher consumers, especially in the Western United States.”
Gallo says that Joseph Gallo Farms has always been proud of the quality of its cheeses. “Our cheeses have long carried the ‘No Artificial Hormones’ seal, and the kosher designation provides our customers with additional assurance of the quality and purity of our products,” he says.
In addition, Gallo says, the venerated designation is very important to traditional Jewish consumers. “But it also indicates that our cheeses meet the dietary restrictions of certain other groups,” he says. “And as consumers are becoming increasingly concerned with the quality and purity of the foods they eat, we believe the Circle K kosher designation will be of value to a broad range of consumers.”
With $85 million in sales last year, the company’s success shows no signs of slowing down any time soon. “Our retail business continues to dominate, and with it, our exact weight product line, says Carl Morris,” general manager and chief operating officer. “Within this product line, sliced products — both stack packs and shingle packs — continue to accelerate as consumers look for easy access to their products.”
As Joseph Gallo Farms entered the eastern kosher market, its 8-ounce sizes were especially popular and appear to be poised for future growth. “In terms of cheese types, Monterey jack dominates our export business, and the various Monterey jack, cheddar and Mozzarella cheeses are most important in the domestic market,” Morris says.
Morris and Gallo agree — the company’s most unique aspect is definitely its complete vertical integration. “Our complete vertical integration, from growing feed to milking cows to producing and packaging cheese to processing whey, gives us unparalleled control over all aspects of our production and the quality of our products,” Morris says.
Gallo continues: “Our commitment to complete vertical integration gives us an advantage — we have full control over the quality of our products. That is a huge benefit over a processor who buys their milk and doesn’t know what goes into the cows that produce that milk.”
Company guiding principles and standards for complete integration and commitment to the environment were set in the 1940s and have evolved over the past 60 years. The Gallo family grew up enjoying the grassland environment, and they are still compelled to save the environment for future generations.
“Our commitment to the environment began with my father,” Gallo says. “He taught me to value the land. He would plant habitats for wildlife, for example. And I have continued to improve on those habitats. Along the way, I started to become more concerned about the environment and it progressed into other types of conservations and preservation.”
Joseph Farms is both a state-of-the-art dairy and crop farm. “We understand that the biggest threat to agriculture and the environment is urban encroachment and the sea of humanity that is surging into our region,” Gallo says. “We continuously monitor our operating plan to ensure a high level of compatibility with our surrounding environment while meeting our business profit objectives. As a vertically integrated operation, we grow much of our own feed.”
The company also understands that wildlife compatibility cropping methods are of great benefit to water birds, Gallo says. “Cereal grains grown to feed the cattle provide a welcome feeding habitat for geese and cranes in the winter as well as valuable cover for ground-nesting birds such as mallard ducks, pheasants and short-eared owls. The corn that is harvested later in the summer hosts the early arriving sand hill cranes. Our irrigated pasture and alfalfa are home to ibis, heron, egrets and many other water birds.”
Nutrients and wastewater are returned to the land with a sophisticated waste-control program and irrigation system that ensures no groundwater seepage and zero reliance on naturally occurring evaporation. “We will continue improving our methane digester system that generates power for operations from our own waste,” Gallo says.
The digester is a 7-acre anaerobic covered lagoon which generates bio-gas. The gas is scrubbed and then piped to two power generators. The power generated by these two large generators is used to provide electricity for the company’s cheese plant. Heat captured from the generators and exhaust is used to heat water for the cheese plant usage, off-setting the some of the need for propane to heat boilers. As much as 80 percent of the power required to operate the cheese plant is supplied by the system.
These practices have earned the company much recognition, including the Innovative Farmer of the Year Award at the 2007 Dairy Forum.
“We have the responsibility to our community and to our environment to lead the field of agricultural habitat conservation,” Gallo says. “Joseph Farms will set the example for others, and we aspire to show that it is realistic to remain profitable at the same time.”
Challenges and Opportunities
One of the biggest challenges in running the company, Morris says, is increasing environmental concerns and regulations. “We deal with this challenge by staying ahead of emerging issues and implementing innovative solutions such as our methane digester system,” he says.
Gallo adds that the company is more affected by prices and market fluctuations being in the dairy business as well as the cheese processing business. “It does affect our cheese business,” he says. “So that could be one disadvantage or challenge. There is a lot of risk involved in running a business like ours. For one, it might not work. Two, payback may take too long to materialize. But all in all, we thought it worth the risk.”
Turning from challenges to opportunities, Joseph Gallo Farms sees the biggest potential gain for the company is in expanding sales in Mexico and the eastern United States. Also, Morris says, new products, convenience packaging such as sliced cheese, and further promotions all provide opportunities for growth. “We look for careful, planned growth from our existing product and facility base, diversifying and expanding as strategic opportunities open up,” he says. “In the future we expect to be bigger, stronger, and continuing to find innovative ways to expand our business, protect our environment, and service our customers.”
Gallo adds: “Folks are becoming more aware of what we are about and want to buy our products. Our environmental strategy is just a side benefit. From a local standpoint however, it is extremely important to our community here, it is important to me and it is important to my family. We want to work in a good clean environment and I want my children to live and work in a good clean environment. We do not want this area to be destroyed.
“I think this a good life and I want future generations to experience this life. We want to produce a quality product and the way we do things helps us with that mission.”
|JOSEPH GALLO: 1919-2007
Joseph Edward Gallo, founder of Joseph Farms Cheese and brother of the founders of E&J Gallo Winery, died Feb. 17 at age 87. Gallo started life as an immigrant’s son and ended it as one of the most successful dairymen in the country.
Born September 11, 1919, in Antioch, Calif., Gallo — named after his father — was the youngest of three boys. Their parents, Joseph Sr. and Susie Gallo, moved from the Piedmont region of northern Italy to California, where they owned and operated a wine business before Prohibition.
In 1979, Gallo started his first dairy with 4,000 milking cows. Four more dairies would follow, as well as the founding of the Joseph Gallo Dairy & Cheese Co. in 1982. A year later, Gallo began production of a line of cheeses he marketed with his full name.
Joseph Farms Cheese eventually became the top-selling retail cheese brand produced in California.
On the farm
Joseph Gallo’s farming success took root in the vineyards of California’s San Joaquin Valley, where he began working following World War II. He devoted his life to agriculture. By acquiring raw land and working to bring it to a quality grape-growing potential, he methodically realized his dream.
With a concern to balance work and the environment, he cultivated other crops, as well as cattle for the expanding dairy and beef markets. Evolving opportunities became a greater portion of this man’s strategic operating plan. Grape growing took on a diminishing role in the company’s vertically integrated business plan and was discontinued in 2001.
As a result of strategic planning and assessment of emerging opportunities, Joseph Gallo Dairy Farms was born in 1979.
In the early 1980s, when Joseph Gallo found himself shipping surplus milk hundreds of miles out of state due to California’s overabundant fresh milk supply, the family business changed once again. He built a cheese processing plant and, using only milk from his own herds, he began to produce his premium California cheese.
Joseph’s son, Mike, continues the Joseph Gallo Farms tradition. From childhood, he worked on the farm, gaining firsthand experience to eventually take over the management of the family business. His lifetime of experience serves the company well. Striking the proper balance between managing a profitable business and showing great concern for the environment will always be the driving force of the company’s operating strategy.
To the Gallos, building a productive farm with responsibility for the future meant achieving a healthy win-win balance between operating profits and concern for and protection of the environment. The company executes a strategy that emphasizes intelligent management of the land, its plant facilities and all waste from the dairy and farming operations.
Over the past 20 years, sales of Joseph Farms cheese have grown significantly, and for good reason. Consumer demand for great tasting and naturally produced cheese products, especially in the western United States, is accelerating. Additionally, the company’s pursuit of even greater quality is the guiding force behind making the Joseph Farms label the most popular California-brand retail cheese in North America.
For more information on Joseph Gallo Farms’ farming practices and related awards, visit www.josephfarms.com$OMN_arttitle="Legacy in Motion";?> $OMN_artauthor="Pamela Accetta Smith";?>