It’s Greek to CG: Yogurt, cream cheese plants nearly set - trivalleycentral.com: News

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  • March 31, 2015

It’s Greek to CG: Yogurt, cream cheese plants nearly set

–Area cows will supply the huge anticipated demand for milk at the two new Casa Grande facilities

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Posted: Wednesday, August 14, 2013 1:00 am

The Commonwealth-Ehrmann dairy partnership makes Greek yogurt on a big scale. Franklin Foods makes Greek cream cheese. Making yogurt calls for milk. Making cream cheese calls for milk and cream.

And that calls for cows, lots of cows.

The Casa Grande Valley has them, said Dennis Dugan, a Casa Grande dairyman and a board member of the United Dairymen of Arizona.

“There’s about 90,000 milk cows within 30 miles of Casa Grande and that’s one reason they came here,” Dugan said.

They being Commonwealth Dairy and Franklin Foods. They both selected Casa Grande for new dairy-product plants. Nearly ready for business, the plants bookend The Property Conference Center on West Gila Bend Highway, also known as Arizona 84.

They’re different companies, but they have a few things in common. Both have chosen Casa Grande to make high-end dairy products for a new market — the West. In both cases, they’re expanding by taking something of a transcontinental leap. Both have dairy-product plants in Vermont.

In 2011, Commonwealth Dairy opened a yogurt plant in partnership with Ehrmann in the southern Vermont city of Brattleboro. Franklin Foods has a cream cheese facility in Enosburg Falls, Vt., just miles from the Canadian border. The company’s headquarters is in Delray Beach, Fla.

How Commonwealth and Franklin ended up in Casa Grande is a story of more than cows. It’s a story of dairymen looking for more markets. Of city officials working to meet the infrastructure needs of the new plants — including a new sewer line. Of a business foundation that helped to create a glide path for their move to Casa Grande. Of neighbors welcoming what they saw as clean industry.

Of dairy plant owners looking for markets west of the Mississippi. Of the promise of good-paying jobs, as many as 200.

It is, it happens, an unlikely story.

“Frankly, Arizona wasn’t on the list initially,” said Ben Johnson, chief financial officer of Commonwealth Dairy. He’s a partner in Commonwealth with CEO Tom Moffitt. Commonwealth, in turn, has partnered with Ehrmann USA, a subsidiary of German-based dairy company Ehrmann AG, to make yogurt in Vermont and Arizona.

Thousands of cows

Arizona became a contender, Johnson said, when Commonwealth-Ehrmann learned about the area’s dairy farms. And all those cows, putting out good milk.

“There is a very high quality of milk available and a large quantity of milk available,” Johnson said.

Rocco Cardinale is vice president of Franklin Foods West division. Casa Grande, he said, has become the — that’s THE — place for high-end dairy production. Other dairy plants have already settled in, including Daisy Brand, which has been making sour cream in Casa Grande since 2008.

“This has become a hotbed in the United States,” Cardinale said.

Besides the nearby dairies, he said, there’s “the proximity to major markets. You’re kind of at a perfect spot.”

From Casa Grande, Franklin and Ehrmann can reach markets in Arizona and throughout the West. It’s a matter of a centralized location with easy access to rail and two interstate highways. Franklin, for its part, also sees Casa Grande as a springboard.

Commonwealth-Ehrmann, it happens, didn’t learn about Casa Grande by accident, United Dairymen CEO Keith Muirfield said.

In late 2011, the organization — which represents more than 90 percent of the state’s dairy farmers — began seeking out companies that use raw dairy products. Through word of mouth and trade journals, UDA heard that Commonwealth and, later, Franklin, were looking to expand.

It took a few months of back and forth talks.

“They found out we were serious,” Muirfield said.

He and another UDA representative visited the plants in Brattleboro and Enosburg Falls.

And while UDA might have sold them on the quantity and quality of available milk and cream, there was more to work out.

“Then you got to get the city involved ...” Muirfield said. “And, of course, the city of Casa Grande got right on it.”

They were certainly businesses the city courted.

“It was great to land them both,” Casa Grande Mayor Bob Jackson said.

Jackson, for one, took part in talks to bring the dairy producers to town. It wasn’t a slam dunk, he added.

Commonwealth officials, he said, “... were looking at three sites.”

Besides Casa Grande, he said, they had narrowed their choices to Boise, Idaho, and Buckeye. Yes, Casa Grande had the dairy farms and the interstates. The sewer line, however, was a bit of a hang-up.

“We have a sewer line that was near capacity,” Jackson said.

What doesn’t go into yogurt has to go somewhere.

“In order to make one pound of Greek yogurt, you need three pounds of milk,” said Will Kaminski, site manager for the Casa Grande Commonwealth-Ehrmann plant, known as Ehrmann Arizona Dairy.

Infrastructure offered

The city agreed to put in a new and larger line at a cost of about $2.5 million, paid for with development impact fees. Plans for a bigger line were already in place, but the added need helped to move up construction, Jackson said.

Another player in bringing the dairy plants to town was the Central Arizona Regional Economic Development Foundation. It goes by the acronym CAREDF, pronounced CARE-def. It hosted site visits for Commonwealth officials and worked as a go-between for city planners.

Greek yogurt and cream cheese plants just happened to fit in with CAREDF’s goal of attracting what it called “value-added agricultural” businesses. In this case, that meant plants that took raw milk and cream and made them into finished products for the retail market, CAREDF Executive Director Jim Dinkle said.

It’s added value atop a growing industry.

“Clearly Greek yogurt is wildly popular with consumers right now,” Dinkle said.

The reasons are obvious, he said. Greek yogurt is packed with protein and is low in fat. And, well, people just like it.

Its growing popularity was summed up in the market research publication Packaged Facts.

In an April 8 news release, Packaged Facts said retail sales of Greek yogurt in the United States increased by 50 percent in 2012, reaching $1.6 billion. And, the report suggested, there’s a much bigger market out there, as Americans still eat a lot less yogurt per capita than people in a number of other countries.

In Casa Grande, Ehrmann Arizona will help to satisfy the craving for Greek yogurt.

“We think we’ll be able to produce about 100 million pounds of yogurt annually,” Johnson said.

Ehrmann Arizona’s Greek yogurt will carry a private label, where products are marketed under store brands. Johnson declined to be more specific, as retailers prefer to keep their private brands private.

Cardinale of Franklin Foods told Cheese Market News that the Casa Grande Facility will double the company’s current production of 55 million pounds of cream cheese a year.

In a recent Dispatch interview, Cardinale said the Casa Grande plant will begin production in time to meet the holiday spike in demand.

“That’s essentially what we call cream cheese season,” he said.

Cream cheese sales overall, however, have been a bit stagnant. This is true across the board for all companies, Cardinale said.

Greek craze

But Franklin Foods is counting on its new, patented, spreadable Greek cream cheese and yogurt for a market boost. With lower fat and more protein, it’s aimed at a more health-conscious market, Carndinale said.

“We’re ... hoping that Greek cream cheese will kind of hit the sweet spot,” he said.

Early sales, from the Vermont plant, indicate that it already has, Cardinale added.

Franklin Foods plans to start production in Casa Grande on Aug. 26.

Ehrmann Arizona Dairy’s facility is about two months from completion. Construction costs will hit about $50 million, Johnson said.

Kaminski, Ehrmann’s site manager, probably knows more about the plant and its workings than anybody. He spends his time between the construction site and a trailer, where he goes over blueprints and paperwork and just generally takes care of business. Here are some numbers from Kaminski. The plant will take up some 96,000 square feet. In addition, Ehrmann Arizona plans to expand, and has the room. The company bought nearly 27 acres. There is planning for Phase II once current construction is finished, Kaminski said.

It’s all built around delivery of fresh milk.

“It comes directly from the farm,” he said. “You don’t get any fresher than that.”

With the cows in place and milk supply guaranteed, Ehrmann had to work with the city and state to get construction and access permits. City officials, Kaminski said, were very accommodating.

“Very great people,” he said. “The mayor really wanted that project coming through. They’re excited that we’re here.”

The Arizona Department of Transportation, on the other hand, did not bend over backwards in granting Ehrmann a permit to build access off Arizona 84 for construction vehicles.

Here’s how Kaminski characterized ADOT’s approval process: “You’re in the stack. When it’s your turn, it’s your turn.”

But he was saved by Michael Jackson, whose conference center, The Property, did have access. The Property parking lot adjoins the Ehrmann site.

“I actually got written permission from him to use his property for our trucks,” Kaminski said. “I was really appreciative. Otherwise, I would have sat five months idle.”

In this case, time really was money.

Jackson owns The Property, along with BeDillon’s restaurant, with his wife, Nancy. He supported construction of the new dairy-manufacturing plants.

“We welcome clean neighbors like this,” he said by phone.

Better neighbors

Five years ago, he said, he fought construction of a scrap-metal recycling company that wanted to build a nearby plant. Jackson said the plant would have crushed cars, releasing volatile organic compounds — a form of pollution — from gas tanks.

“Emissions from 1,700 cars a day being chopped into little pieces,” Jackson said.

He and his group won the fight to keep out the metal plant. He had an ally in the United Dairymen of Arizona.

“They helped the fight with the shredder,” Jackson said. “If we lost that fight, United Dairy would have sold the building.”

UDA used the building just east of The Property to store and blend powdered milk and other dairy ingredients delivered from its facility in Tempe. Franklin Foods now leases the Casa Grande building and is remodeling it for the 90,000 square-foot cream cheese plant. UDA’s Muirfield said Franklin Foods has the option to buy the building outright.

Michael Jackson, in any case, can now breathe easy. And he’ll have a line on new dairy products for his restaurants.

On a recent morning, Kaminski provided a tour of the new Ehrmann plant, just west of The Property. Photographer Oscar Perez and I donned the necessary hard hats and bright orange vests. We first looked in on the high-ceilinged receiving dock. Tanker trucks loaded with milk will pull in. The milk will be pumped out. Each truck holds about 6,200 gallons. Trucks from nearby dairy farms will be coming and going 24 hours a day, Kaminski said.

Before the milk is pumped, however, it’s tested by Ehrmann’s inhouse lab, part of the new facility. The milk and yogurt will be tested at several steps during production.

The lab also will help in the development of new products.

The milk will go into two of three outside tanks, each with a 70,000-gallon capacity. The third tank will hold 50,000 gallons of whey, a by-product of separating out what’s needed to make yogurt.

A big part of the plant is plumbing. The milk goes through stainless pipes from one room to the next, as it’s pasteurized and fat is removed. This is, after all, low-fat yogurt. The receiving dock is clean. And beyond the point of pasteurization, it’s sterile.

Workers in the receiving end can’t go to the sterile side without a change of clothes, Kaminski added.

The packaged yogurt ends up in a warehouse some 47 feet high, with each pallet monitored by computer and ready for shipment.

From cow to store.

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