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FARM TO TABLE
Tang of success
Boosted by its live-culture yogurt, Stonyfield Farm has grown from a seat-of-the-pants dairy and is now a $43 million enterprise
By Sheryl Julian, Globe Staff, 06/24/98
LONDONDERRY, N.H. - Gary Hirshberg has been warming up for a couple of hours, telling stories about the early days of Stonyfield Farm. Then he gets to the cows. ''We used to have cows,'' he begins slowly, stifling a laugh. The cows were in the barn on the 18th-century property in Wilton, where the original Stonyfield plant was located - ''held together with baling twine,'' he says. His family lived in the adjacent farmhouse. Hirshberg, Stonyfield founder Samuel Kaymen, and Kaymen's wife, Louise, took turns hooking up 21 Jerseys and some Brown Swiss to electrical milkers. The problem was, the farm, in a glorious spot on the top of a hill, lost its electricity whenever a storm even considered rounding the bend from Vermont and blowing east.
One afternoon a storm hit, Hirshberg continues, ''and of course we lost power.'' The cows, desperate to be milked, ''were braying and kicking.'' Louise Kaymen ran into the farmhouse for help. ''At 3:30 a.m., we finished the last cow,'' says Hirshberg who, with both Kaymens, milked the cows by hand. He lets out a long sigh. ''Then it was time to start again.
''And that was the day we realized the cows had to go.'' Finally, Gary Hirshberg starts laughing.
For years, this was how decisions were made at Stonyfield Farm. Since its beginnings 15 years ago as a seat-of-the-pants dairy run by two counterculture entrepreneurs, Stonyfield Farm Yogurt has grown to a $43 million enterprise. Hirshberg, 43, is now chief executive and Kaymen, 62, is now the semi-retired chairman (''agreeably,'' he says).
At the time of the milking incident, the two men raised cows, made yogurt from the milk, drove it into Boston, stocked supermarket shelves, and chatted up shoppers. Faintly interested consumers found a free carton of yogurt in their shopping carts and the partners kept their fingers crossed that word of its goodness would spread.
Today, the company sees an annual growth of 35 percent; projected sales this year are expected to reach $50 million from refrigerated cup yogurt, frozen yogurt (hard-pack and soft), and ice cream. About 30 percent of Stonyfield's products are certified organic, for which customers willingly pay a premium. ''They're the market leaders,'' says Tim Sperry, Bread & Circus's regional grocery buyer. ''They're deeply committed to the New England dairy industry and they've always kept a good sense of humor.''
Grit, determination, and pluck kept the young company from going under at least half a dozen times in the early years. Now Stonyfield understands how to position itself in the marketplace to keep its spot as the leading seller in New England and New York of plain nonfat yogurt. ''Our little secret weapon is the plain quarts,'' says Hirshberg. ''We're the purist's yogurt.''
Three times a day, milk from local, family-run dairy farms is piped into a modest plant here. A $10 million renovation is scheduled for completion in the fall. Stonyfield has just released nine new yogurts - many whole milk - in what Hirshberg calls ''adult flavors.'' He maintains that enough of the population has decided that the fear-of-fat craze is over, and he's celebrating with ''strawberries and cream,'' ''blueberries and cream,'' ''vanilla truffle,'' and ''creamy maple,'' all organic and boasting cream on top.
The company, which has been injecting five live cultures into its yogurts, just added a sixth. Lactobacillus reuteri, developed in Sweden, is said to inhibit the growth of harmful bacteria such as salmonella and E. coli. ''Medicine didn't recognize nutrition,'' says Hirshberg. ''Now, suddenly, there's an epidemic interest in vitamins, homeopathy, and cultures.''
He believes that microorganisms can effectively boost the immune system, which is why his yogurt now contains L. casei, S. thermophilus, L. bulgaricus, L. acidophilus, and bifidus. When medicine comes around to the health benefits of these cultures, says Hirshberg, his company will be waiting. ''When they start turning, we want to be there.''
In-your-face marketing
Unlike the industry leaders, Stonyfield Farm has never advertised and pays no slotting fees - money most companies pay upfront to guarantee prime supermarket shelf space. They give out millions of free yogurts at nonprofit events such as Earth Day, the Walk for Hunger, and Share Our Strength. ''We want to be the corporate model for social and environmental responsibility,'' says Kaymen.
Hirshberg calls their system of giveaways ''in-your-face marketing.'' Four years ago, when Snackwell's lowfat yogurt was launched, they got worried. They took 100 cases of yogurt ''to every tall building in Boston,'' he says. ''It was so successful, we took it to New York, then to Hartford. We stood on street corners.''
Stonyfield yogurt arrived in the market through the back door. Hirshberg's grandfather A. Murray Ginzberg was a Boston banker who lived next door to Sidney Rabb, then chairman of the board of Stop & Shop. The partners went to Rabb, who seemed disinterested. He sent them to Bill Gaetani, then a Stop & Shop dairy manager, now director of deli sales. Gaetani said, ''I'll give you five stores and six months. If you sell, I'll give you 12.''
''Someone once told me I can sell ice to Eskimos,'' says Hirshberg.
''We went to the Stop & Shop on Memorial Drive, set up a table and samples.'' Hirshberg, who talks fast, laughs a lot, and enjoys his own stories, talked to customers for hours. He and Kaymen must have had something of a comedy routine going. ''People called us Ike and Mike,'' says Hirshberg. After six months, the partners produced, and Gaetani came through with more stores.
Once customers tasted it, says Kaymen, ''the yogurt sold itself.''
As it caught on, Hirshberg kept pushing Bread & Circus to carry his product. ''We'd been trying to get in for a year.'' Bread & Circus buyers told the entrepreneurs that they didn't need another natural yogurt.
Hirshberg mounted a small campaign. On his 30th birthday, when friends asked him what sort of gift he wanted, he told everyone the same thing: ''Go to Bread & Circus and ask for my yogurt.
''We got in,'' he says.
Get some culture
Yogurt is not simply milk that curdles. In order for it to turn into yogurt, it has to ferment with acid-producing bacteria. Sheep, goats, and cows have been milked for thousands of years, writes Harold McGee in ''On Food and Cooking, the Science and Lore of the Kitchen'' (Collier Books), and the first yogurts were probably developed after the beginning of dairying.
That milk would have fermented naturally with wild, airborne bacteria. The recipe has changed little from ancient times. Stonyfield pasteurizes milk at its plant, cools it, inoculates it with the cultures, then cools it again.
Even people who are lactose intolerant can often eat yogurt because ''cultured foods are practically free of lactose,'' writes McGee. ''The fermenting bacteria use it as fuel.''
Yogurt making began in the United States in 1929 when the Colombosian family, Armenians who lived in Andover, started Colombo and Sons Creamery. General Mills purchased the company in 1993 and incorporated the yogurt division as Yoplait Colombo, based in Methuen. In 1919, near Barcelona, Isaac Carasso came out with Danone (named for his son Daniel); he brought it to the United States as Dannon in 1941. Now called the Danone Group, the company has captured a 15 percent share of the fresh dairy market worldwide.
Stonyfield never intended to get this far. Samuel Kaymen began making yogurt to keep another project funded. In 1978, he was running the Rural Education Center in Wilton ''to teach organic agriculture and care of the earth,'' he says. ''I started making yogurt because the funding for the school dried up. We had been making small amounts for ourselves.''
Hirshberg, says Kaymen, ''was the businessman who came to rescue me.''
In New England and New York, Stonyfield is giving both Dannon and Colombo a run for their money, selling fourth overall in both markets - but selling first in large, plain quarts - and distributing to every state in the country. (In New England, Dannon, Yoplait, and Colombo lead the overall market, in that order.)
Chat about the planet
One reason for Stonyfield's success is its insistence on the quality of the primary ingredient: milk. The company buys milk mainly from family-run dairies that produce either organic or regular milk without bovine growth hormones (labeled rBGH or rBST), genetically engineered hormones that increase milk production.
''Our primary opposition to rBGH arises from an economic concern: We believe that the widespread use of rBGH will have a devastating impact on the economic well-being of family farmers,'' writes the company in a position pamphlet. ''One of the founding objectives of Stonyfield Farm is to support family farmers in all of our endeavors.''
If at any point customers want to know what Stonyfield is thinking about, they need only check the carton lids, which are full of chat about the planet, ecological practices, hunger, and social change. Ten percent of earnings go to environmental initiatives.
One lid, on stopping handgun violence, almost cost Stonyfield some supermarket accounts. Dairy buyers told Hirshberg not to peddle his politics on his products. Hirshberg, who was part of the committee that erected the Massachusetts Turnpike billboards of children killed by handguns, kept telling the buyers that all supermarket shelves are already filled with political messages.
A Stonyfield employee asked to see him. Hirshberg knew perfectly well that some employees are members of the National Rifle Association.
''He came to thank me.''
Lost in New Hampshire
Before Stonyfield, Hirshberg had been director of the New Alchemy Institute in Woods Hole, an ecological research group, after graduating from Hampshire College (during its early years). He was raised in Manchester, N.H., the son of a shoe manufacturer.
Today, Stonyfield is something of a family affair. Hirshberg's wife, Meg, who studied integrated pest management at Cornell University, wrote ''The Stonyfield Farm Cookbook.'' They have ''three little yogurt eaters,'' as Gary Hirshberg calls his kids, who are 10, 8, and 5 years old. Meg's mother, Doris Cadoux, ''was our biggest investor,'' says her son-in-law. As director of natural resources, Nancy Hirshberg, Gary's sister, tracks down fruit and flavorings. She's the one who finds organic lemons, for instance, which are squeezed into the new ''low-fat organic luscious lemon.''
For all its sense of calm and organization, there were many years when things at Stonyfield were chaotic. Beginning with the stock market crash of 1987, Hirshberg and Kaymen started losing money quickly. They went around looking for investors. ''Anyone in a necktie was fair game,'' says Hirshberg. By 1990, the partners each owned a very low percentage of the company. ''Every Thursday morning I woke up at 8 a.m.,'' says Hirshberg, ''and I didn't know where the payroll was coming from.''
They never lost sight of the product or their customer base (the typical buyer is 25 to 54 years old, takes active vacations, is college-educated with two kids, one or two careers in the family, $60,000 or more in income, and an interest in the environment).
And today, having bought back a large share of the company, Hirshberg loves to tell stories about near-misses in the unpredictable world of business.
Did you hear the one about the rabbi? Early on, the two Jewish entrepreneurs wanted kosher certification, so they contacted the appropriate Orthodox rabbis.
The rabbi who came to see them got lost in New Hampshire for 1 1/2 hours. By the time he arrived, says Hirshberg, he was frazzled and also surprised to find an 18-room Federal farmhouse with a barn holding the yogurt works. ''He yelled in his best Brooklyn accent: `Hirshberg and Kaymen! Two Jews in the wilderness! You pass certification.'''
Then, of course, he began his official inspection. And they did pass.
This story ran on page E01 of the Boston Globe on 06/24/98.
(C) Copyright 1998 Globe Newspaper Company.
Source: Moorad Alexanian
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