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Organic Valley dairy co-op will tap new markets
An organic dairy in Wisconsin reaches deal to extend its reach.
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The farmer cooperative behind the Organic Valley label put on some weight Monday when it announced a deal to manufacture and sell Stonyfield Farms milk, the Londonderry, N.H., company that sells about 13 million gallons annually.
The deal could expand the 1,133-member CROPP cooperative, based about four hours from the Twin Cities in western Wisconsin, by as much as 270 farmers as it adds new markets to Organic Valley's reach -- including New York City -- said Louise Hemstead, CROPP's chief operating officer.
"It really plays to our strengths," she said.
CROPP, which calls itself the nation's largest organic farming cooperative, has supplied the milk for Stonyfield yogurt for 10 years. The two companies often act more like colleagues than competitors, said Stonyfield Farms CEO Gary Hirshberg.
"It was never really my intent to compete with [Organic Valley], so the fact that OV was willing to take on the sales responsibility is great for me," Hirshberg said.
Consumers won't notice a change in prices or brands, but Organic Valley may begin entering markets, particularly on the East Coast, where Stonyfield has a presence. The deal takes effect Jan. 1.
Hirshberg began looking for a new partner this summer when HP Hood said it wanted to end its licensing relationship with Stonyfield.
CROPP was already the nation's largest producer of organic milk, but some of that production goes to cheese, yogurt and other products. The No. 1 retailer of fluid milk is Dallas-based Dean Foods, which sells the Horizon brand.
Organic milk sales, which routinely recorded 20 percent growth annually, suffered this year along with much of the conventional milk industry as the recession hit and milk supplies outstripped demand.
Matt McKinney • 612-673-7329
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