La Farge, Wis.-based Organic Valley is a farmer-owned cooperative representing nearly 1,700 organic farmers in 34 US states. Focused on its founding mission of saving family farm culture through organic farming, the co-op produces a wide range of organic dairy, egg and produce products.
Organic Valley is the nation’s largest farmer-owned organic cooperative, and one of the world’s largest organic consumer brands.
“The cooperative was formed in 1988 by seven farmers amid the farm crisis. A cooperative meant that the farmers owned and ran the business, and not the other way around,” said Robert Kirchoff, chief executive officer, Organic Valley. “The farmers were sick of the way food was being grown with synthetic pesticides, mixed messaging about farming, and how farmers were being treated. Enough was enough, and with that, they held their first meeting in Viroqua, Wisconsin, and the cooperative was born.”
A business is defined by its mission, Kirchoff said.
“Our mission is a hopeful vision to establish a business that embraces organic farming that enables small family farms to be stable and sustainable,” he said. “Every day we fight to save small organic family farms. As hundreds of farms lose their markets each year due to the ‘get big or get out’ sentiment and corporate consolidation, we continue to do everything we can to help these farmers. We are bringing new farms into our cooperative and joining forces with others to figure out solutions to save these small family farms.”
Raising the bar
Organic Valley is known as the revolutionary co-op that fought for a decade to help develop the first USDA organic dairy standards.
“We got it done, and we didn’t stop there,” Kirchoff said. “All of the food we sell is USDA-certified organic, and we’re always looking to do what’s right for people, animals and the earth.”
The cooperative holds itself to the highest quality standards, and is proud to be one of the few always-organic brands.
All Organic Valley products are sustainably made without the use of toxic pesticides, synthetic hormones, antibiotics or GMOs.
From farm to fridge, Organic Valley milk goes through an extensive list of quality checks. In fact, 57 of them.
“In the end, it really all comes down to care,” said Ty Brannen, executive vice president, supply chain, Organic Valley. “We care about the quality and safety of our products, we care about our animals’ welfare, and we care about our farmers. What’s more, is we want consumers to be proud of the products they are serving their families.”
Kirchoff said the industry is seeing a continued emphasis on the importance of regenerative and sustainable farming, and animal care.
That being said, Organic Valley farmers have always understood that organic farming replenishes carbon in the soil, and improves soil health and water and air quality, Kirchoff said.
“Science now reinforces what we have known all along: When the natural rhythms of a farm are supported by small-scale, family-run, organic farming systems, we see more carbon stored in the soil, more diverse life in the pastures and more delicious, organic options on the shelf,” he said.
Organic Valley is a national business that believes in what it is doing — to the core.
“We believe in what we are doing. We wake up every morning to help the small family farm continue to thrive, and it’s truly the best job ever,” Kirchoff said. “We’re making a difference in the food system, for the earth and for our farmers.”
Cooperatives are people-centric entities controlled and run by the member-owners for the greater good of the whole, Kirchoff said.
“When being a part of the cooperative, whether it be a member-owner or an employee, you realize that there are common goals,” he said. “Organic Valley member-owners and employees act together to build a better world, and to generate a better tomorrow for farmers, people and the food industry.”
Organic Valley makes its mark on virtually every category of dairy product.
“Directly or indirectly, we are in every dairy category. Obviously, fluid milk, cheese and yogurt. More indirectly, ice cream, butter in a big way, cream cheese, cottage cheese, dairy powders, non-fat and dry milk,” Brannen said. “So, one way or the other, we are touching all dairy products.”
Organic Valley also has a sizeable ingredients business.
“We might provide cream or powders to ice cream manufacturers. So, it’s our farmers’ products in the package, but we’ve sold it as ingredient, so it’s not branded as Organic Valley,” Brannen said.
Organic Valley recently launched a line of smoothie/milkshake powders future-focused on the female pregnancy experience.
“We are always looking for ways to help our consumers, and when we didn’t see an organic product designed for expecting and new moms, we felt that that our real, nutritious organic milk powders could provide nutritional support during their pregnancy journey,” Brannen said. “We consider ourselves a nutritional company anyways, because of the quality and the naturalness of our products. But doing something more tailored towards a specific life stage like this was new experience for us, and we’re excited about it. The reception we have received has been quite positive.”
Supply chain superhero
Organic Valley utilizes technology in ways that may be dissimilar to most consumer-packaged goods (CPG) companies and most dairy companies out there.
“We use data to direct the choices we make specific to manufacturing and operational logistics,” Brannen said.
Organic Valley has invested in upgrading its systems, according to Brannen.
“We’ve spent a lot of time and energy upgrading our planning systems — whether it’s the technological piece, or the process piece and how we operate it and interact with it,” Brennan said. “Getting the right information like expected demand into the system, and then how our team processes and moves that information, helps us have the right product in the right place at the right time.”
Brennan said Organic Valley, not unlike everyone in this economy, has had to put a tremendous amount of effort into its transportation management systems. The cooperative works with a network of anywhere from 80 to 90 co-processors from coast to coast. And Organic Valley produces products largely across that network.
“The fact that we have such a vast network of co-processors, as well as a full portfolio of different dairy categories, gives us strength and resiliency,” Brennan said. “Being able to move production around is a challenge.”
Internally, Organic Valley owns three plants. Two of them are basically milk balancing plants that operate milk standardization, produce butter or ghee, and in one case, dry milk for powders, Brannen said.
“The third plant is a small cheese conversion facility. So being able to be flexible and move production to other sites to manufacture different products helps us tremendously in balancing need when we have a challenge,” he said.
From the business side of the cooperative, Brannen said, its Organic Valley’s supply chain that makes it so unique.
“I spent the first 27 years of my career working in large tier one CPG companies. Everything I learned about supply chains and how to make them efficient, and how to operate them, went straight out of the window when I came here,” Brannen said. “I don’t believe anyone has a supply chain as different and complex and unique as ours. So what makes us unique? We are picking up organic milk at approximately 1,700 family farms, at least twice a week, 365 days a year. Some of these are very small dairies that milk as few as 20 cows.”
Minimum pickup, Brannen said, is somewhere between 500 and 1,000 pounds of milk.
“There’s nothing efficient about trying to provide that kind of service to small farms. But it’s exactly the reason we exist, because if we didn’t exist, if we didn’t have our mission, if we weren’t committed to providing that service, these farms go away. And when these small family farms go away, all the research and data shows, they don’t come back,” he said. “And eventually, rural communities are affected, and they fail. Having this mission of service is critical for our current farmers, our current owners, as every one of these farmers is planning generational succession on their farms. So our supply chain is designed not only to deliver low-cost, fast and flexible service, but designed to serve our farmers and deliver our mission, and do it a little bit better every day.”
Other companies pay business expenses before paying their farmers, Brannen said.
“Our entire cooperative is built on the foundation of establishing a stable pay price for farmers. When we have a good year, farmers get even more for their hard work through profit sharing,” he said. “One of the other things that makes our cooperative unique is the amount of access our farmers have to the business, and to the employees. We believe our best version of us is being together, spending time and understanding each other.”
The farmers set the guidelines and the standards from which the cooperative operates, Brannen said.
“And it works better when the business side is running as a business, and the farm side is running as a farm. But it is critical, absolutely critical, that we stay connected. Part of our magic here is that we do stay so connected. We spend a lot of time together trying to understand each other,” he said. “We welcome all kinds of questions from the farmers about how we run the business, and our farmers are very patient in teaching us about their farms. The crossover, shared learnings, working together, and being physically and emotionally close, is absolutely critical to the success and sustainability of the business.”
Today and moving forward, Organic Valley’s mission is to help save small organic family farms. The cooperative is doing everything it can to help these farmers remain stable and sustainable, and is sincerely dedicated to continuing to do so.
“We are bringing new farms into our cooperative and joining forces with others to figure out solutions to save these small family farms. Organic Valley has already offered a home to more than 90 farms in the Northeast that lost their markets,” Kirchoff said. “With the help of consumers and customers across the country, we are helping solve the crisis of disappearing small family farms. We are creating the food system we all want — one that regenerates soil, cares for animals, nourishes people and strengthens communities.”