Farmer-owned MOOMilk making slow but steady progress

EDMUNDS, Maine — Three years after its inception, Maine’s own organic brand of milk, MOOMilk, is making slow but steady progress — sales are up 20 percent over the last four months — while creating a business model that other farmers are watching closely.

“Ninety percent of MOOMilk profits go back to the farmer,” dairyman Aaron Bell of Edmunds said recently. “That is unheard of.” That profit sharing model is so attractive that MOOMilk has added five new farms and expects two more to come on board by the end of the year.

But Bell also is a realist and is quick to say that in the past three years, just about anything that could have gone wrong for MOOMilk, did.

“We had containers leaking all over the place. We had out-of-date product on the shelf. We had stores not provide shelf space. We had machinery failures. We had trucking difficulties,” he said, admitting that for three months, farmers didn’t even get paid.

The company — started on a mere $500,000 investment — went broke and an aggressive $2 million financing package was put into place at the 11th hour. A trademark infringement lawsuit, filed earlier this year by the Union of Orthodox Jewish Congregations of America, was settled in April 2012, according to an email from Robert Sessums, chief operating officer of MOOMilk. The suit accused MOOMilk of using on its milk cartons the trademark, which signifies the milk has been certified as kosher, without the group’s permission.

Today, most of those kinks seem to have been ironed out and MOOMilk’s future is looking rosier than ever, although the company is hampered by a lack of advertising funding.

“Oakhurst spends $2 million a year on advertising. MOOMilk has spent nothing,” Bell said. MOOMilk is growing mostly by word of mouth through the organic and health-conscious community. “The only reason MOOMilk is still around is because the people of Maine invested in it. We have a very loyal following.”

Bell said the power of advertising cannot be understated. On a recent trip, Aaron and his wife, Carly DelSignore Bell, were flying out of Logan Airport in Boston and Carly had forgotten her identification. Aaron said he ran to the closest grocery store, grabbed a half gallon of MOOMilk, and used the picture on the carton of the Bell family on their Downeast farm as identification. Carly was allowed to fly. “Sometimes it’s good to have your face on a milk carton,” Aaron Bell joked this week.

The Bell family runs a diversified, ninth-generation farm on the coast of Washington County. They produce organic milk, blueberries, sustainable forest products, organic vegetables and meats. “We are pretty representative of how people make their living in Washington County,” he said. “Forty percent of the people here have more than one job.”

To keep this diversification healthy, Bell said he jumped at the chance to bring organic milk back to Washington County in 2005. But after a considerable investment, Hood Milk dropped the Bells and 10 other Maine farmers, leaving them with no commercial market for their milk. The dairy farms took a chance and formed a low-profit limited liability company (L3C) called MOOMilk. The MOO stands for Maine’s Own Organic. Milk is shipped from eight farms in Aroostook and Washington counties and processed at Smiling Hill Farm in Westbrook. It is then distributed in Maine, Massachusetts and Rhode Island through an agreement with Oakhurst.

“The company is still not profitable,” Bell admitted. He said MOOMilk needs to sell 10,000 half-gallon cartons a week to break even. “We are selling 6,000 to 7,000 now.” Payments to farmers are bolstered by the $2 million financing package for the time being. But Bell said the Boston-area market is exploding. “We are selling more milk in Boston right now than in all the 200 stores we supply in Maine.”

MOOMilk Executive Director William Eldridge said Thursday that the company appears to be in balance now. “Our sales have increased 20 percent in the last four months,” Eldridge said.

He said statewide showings of a film that starkly portrays the realities of dairy farming — “Betting the Farm” — that is showing across the state has increased sales. “People are saying they didn’t realize how hard dairy farming is. We’re converting people that don’t even care about organic but just care about the local farmer.”

The precariousness of being a dairy farmer in Maine was brought home last week when mega-dairy company Dean Foods announced it would close Garelick Farms’ processing plant in Bangor, putting 35 people out of work and leaving several farms in uncertainty about where they would sell their milk.

The farmers contracted with Garelick are conventional farmers, not organic, and therefore could not supply MOOMilk without shifting to organic. That is a process that can take up to three years or longer.

Eldridge said he does not expect the closing of Garelick’s processing plant to affect MOOMilk sales as the distribution side of that company will remain in place. He also said that many consumers seeking a local milk producer did not think of Garelick’s as local since it was owned by an international company, even though it was supplied in Maine by Maine farmers.

Bell said another positive development MOOMilk is a recent contract with Blue Marble Ice Cream Co. in New York City, to purchase its cream. MooMilk has been selling cream to more than a half dozen small gelato and ice cream companies but Blue Marble, based in Brooklyn, is a major company, Eldridge said, and will make the cream side of the business profitable for the first time. He said MOOMilk also will be launching pint-size flavored smoothies, made with organic fruits.

Eldridge said next year’s goals for MOOMilk include adding new equipment that will allow the company to produce quarts, pints and half-pints. Currently MOOMilk is only sold in half gallon cartons. “Next year we will also be taking a serious look at manufacturing cheeses,” Eldridge said. “2013 will be all about expanding what we have and adding new products.”

Bell said the goal is to fill 30 percent of the New England market’s organic milk demand. “That would sustain every organic farmer in Maine,” he said. “We need more producers. If we don’t do it now and ride this MOOMilk wave, I don’t know how many generational dairy farms will still be here 10 years from now.”