An Arizona dairy embraces suburban sprawl by staying put and expanding into glass-bottled milk.
When a suburban housing tract marched right up to Kevin Danzeisen’s Phoenix, Ariz., dairy in 2005, new residents could peer from their second-story windows directly into his corrals across the street.
But the third-generation producer refused to relocate his operation to more distant farmland.
“Why should we run away or move out?” Danzeisen remembers thinking. “How can I embrace what I do for a living and be proud of my product?”
Vowing he would do whatever it took to continue running a successful dairy operation, Danzeisen reassessed his unique situation. And it hit him: He didn’t just have new suburban neighbors. He had 5 million potential customers in his Phoenix backyard.
That realization helped Danzeisen find his dairy’s future. Last November, he launched a direct-from-the-dairy milk-bottling operation with his father and brother. It’s the first local dairy to offer milk in glass bottles to the Phoenix market.
Under the “Danzeisen Dairy” brand, the family’s creamery is bottling 1,000 glass containers of designer-flavored milk each day. The milk sells in 60 stores in the Phoenix area, including Whole Foods. The creamery churns out bST-free milk products in half-gallon and quart sizes, skim through whole. They come in chocolate, strawberry, Arizona orange and mocha flavors and, seasonally, root beer and egg nog.
Every day, 30,000 cars drive past the creamery and its retail store. Located inside the city limits, the site is a mile from Danzeisen’s two dairies, which milk a combined 2,300 Holsteins.
The new bottling venture has given the Danzeisens, their 32 dairy employees and their 10 creamery workers “a totally different perspective on our product,” he says.
“Our name is on that bottle,” says Danzeisen. “It gives the employees pride in what they’re doing and inspires them to do a better job.”
He won’t divulge start-up costs, but acknowledges that writing a business plan and getting financing to launch the creamery were big hurdles. Finding a facility wasn’t easy either. Eventually, Danzeisen decided on a vacant, former Volvo dealership. The 35,000-square-foot facility had the bare bones needed for his creamery, including loading docks and office space.
Retrofitting the space also took time. Since Danzeisen wanted to bottle milk the old-fashioned way, he had to comb the U.S. for pasteurizing and bottling equipment from the 1940s and ‘50s. He found tanks, machines and equipment parts in seven states in his quest for old-fashioned authenticity.
Even so, the creamery also has its modern technology, with a computerized cooling system and touchscreens to turn equipment on and off.
Today, the Danzeisens send a truckload a week, or 5% of their dairies’ milk, to the creamery. The rest is marketed through their co-op, United Dairymen of Arizona.
“My goal is to market 100% of our milk though the creamery, maybe in five to 10 years,” Danzeisen says.
Still in the discovery phase of his new business, Danzeisen is realizing the challenges of selling milk at retail. Milk has been a loss-leader in Phoenix stores, where Danzeisen’s glass-bottled milk often competes with 99-cent prices. But he believes his brand’s uniqueness, from its dairy-direct origins and freshness to its recyclable glass bottles, attracts quality-seeking consumers.
“There a complete difference in the taste,” he says. “Customers love it, and they’re willing to pay for it.”
Danzeisen has learned he can’t be overly prepared when dealing with the retail side of the dairy business. “Everything is 100 times more important than you thought it would be,” he says. “Every little detail is important.”
By: Catherine Merlo, Dairy Today Western & Online Editor
Source: Dairy Today, AgWeb.com