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Case study: Marin dairy family diversifies beyond organic into artisan products

Vine Notes

Charles Day (Charles.Day@raboag.com) is senior vice president and division manager of Rabo AgriFinance.

Vine Notes (nbbj.news/vinenotes) is a column sponsored by Rabo AgriFinance, Heffernan Insurance Brokers and Farella Braun + Martel.

The content, views and opinions in this article are based, in part, upon research produced by RaboResearch Food & Agribusiness, a unit of Rabobank Group. The information contained herein is intended for general educational purposes only and is not to be construed as legal, tax, or financial advice. Please consult with your own legal, tax or financial advisor for guidance with your own particular circumstances.

What’s better than a perfectly paired bottle of North Coast wine and an artisan cheese plate? Thankfully, we can rely on innovative producers across the North Coast to continue to provide us with new and quality options in both categories. But how does a food or beverage company turn an idea into a reality when looking to expand offerings and leverage a new market?

Let me introduce you to one of our local clients that did exactly that.

Karen and John Taylor’s farm, Bivalve Dairy, located on a 700-acre ranch overlooking Tomales Bay, was at a crossroad. Responding to an oversupply of organic milk, the family recently expanded its portfolio by diversifying into the production and marketing of artisan cheese and cultured butter.

Karen, a sixth-generation dairywoman, grew up on the Bivalve property. John, an industrial engineer, also grew up on a Northern California ranch. Shortly after her widowed mother retired, Karen returned to the family business with John in 2006, and together they transitioned the herd and facility to an organic operation. Today, Bivalve Dairy is home to about 200 milking cows. Until recently, Karen and John sold the bulk of their milk to a major dairy distributor. Thanks to the strong growth of organic milk production in California, however, prices fell, and Karen and John sought a way to maintain - and hopefully boost - profitability.

As a pasture-based operation, Bivalve Dairy thrives on the health of its coastal land. The damp, frequently overcast weather keeps the native grasses and carefully selected forage crops - rye, triticale, barley and clover - lush over a prolonged grazing season. The Taylors irrigate pastures with rainwater they capture on site and employ other sustainable farming practices including rotational grazing, seeding with a no-till drill and fertilizing with manure from their own cattle. John also reaches into his engineering background to use technology to analyze and enrich the dairy’s farming practices. All of this contributes to an extended grazing season and highest quality of milk production.

John and Karen were in the first wave of entrants into the organic milk business. Today, 13 years later, with hundreds of new organic dairies, the market is awash in organic milk. The Taylors’ response to the challenge has been to divert much of their milk production and use it to make artisan cheese and cultured, European-style butter, products with significant added value.

This required considerable investments in knowledge, people, facilities and equipment. All of which required capital. The Taylors relied on their relationship with Rabo AgriFinance, given our expertise in agricultural lending.

Looking back at Karen’s Portuguese heritage, the Taylors found a niche in the artisan cheese market - a type of cheese similar to some of the flavorful, slightly spicy varieties traditionally made on the islands of São Jorge (Saint George) and Terceira in the Azores. That was the place from which one of Karen’s great-grandfathers had immigrated to the United States. His surname was Mendonça (pronounced men-DON-sa), and that is now the name of Bivalve Dairy’s new hard, raw-milk cheese. The Taylors are also producing a soft, spreadable cheese, Foundry Fresh, similar to farmer’s cheese but without added cream. Unlike the Mendonça, Foundry Fresh is made from milk that has been pasteurized.

The name Foundry Fresh, says John, comes from the Taylors’ new cheesemaking facility, Bivalve Creamery. It’s located on First Street in nearby Petaluma in a building that formerly housed a foundry. Bivalve is leasing it from Cowgirl Creamery, whose award-winning Red Hawk triple-cream cheese has long been made exclusively from milk supplied by Bivalve Dairy.

Karen and John are betting not only on cheese. At the Bivalve Creamery they’re also producing a European-style cultured butter. The Bivalve story - packed with innovative and niche approaches to dairy product development - is still being written.

As wine, craft beer and food markets continue to shift like many local dairies have experienced, it’s important to get creative with production, product-types and marketing, as well as how to finance it all. We love local success stories and the opportunity to write a chapter.

Charles Day (Charles.Day@raboag.com) is senior vice president and division manager of Rabo AgriFinance. Vine Notes (nbbj.news/vinenotes) is a column sponsored by Rabo AgriFinance, Heffernan Insurance Brokers and Farella Braun + Martel. The content, views and opinions in this article are based, in part, upon research produced by RaboResearch Food & Agribusiness, a unit of Rabobank Group. The information contained herein is intended for general educational purposes only and is not to be construed as legal, tax, or financial advice. Please consult with your own legal, tax or financial advisor for guidance with your own particular circumstances.

Vine Notes

Charles Day (Charles.Day@raboag.com) is senior vice president and division manager of Rabo AgriFinance.

Vine Notes (nbbj.news/vinenotes) is a column sponsored by Rabo AgriFinance, Heffernan Insurance Brokers and Farella Braun + Martel.

The content, views and opinions in this article are based, in part, upon research produced by RaboResearch Food & Agribusiness, a unit of Rabobank Group. The information contained herein is intended for general educational purposes only and is not to be construed as legal, tax, or financial advice. Please consult with your own legal, tax or financial advisor for guidance with your own particular circumstances.

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