Farmers Cooperative Dairy
They might not know it, but when Atlantic Canadians choose the Farmers Dairy brand, they are actively supporting real farms run by real families. Be it milk, butter, cheese or ice cream, serving any Farmers product means strengthening local farms, communities and economies.
Founded in 1921 (and officially becoming Farmers Cooperative Dairy in 1961), Farmers Dairy is a cooperative headquartered in Bedford, Nova Scotia, which is where the main processing plant is located. The cooperative also owns a cheese and milk powder plant in Truro, as well as a spreads plant in Middleton. There is another plant in St. John’s, Newfoundland, that produces fluid milk, cream and Swiss cheese.
“We’ve been around for a long time,” says Cindy Brown, Operations Manager. “We are 100 per centowned by a network of 150 Atlantic dairy farmers. It’s great because everybody is invested in making it a success story; we value that. It’s kind of a family atmosphere. From a marketing point of view, we want people to know it’s a co-op and that Nova Scotia dairy farmers provide the milk for our products.”
Speaking of products, Brown says Farmers Dairy has about 800 stock-keeping unit (SKU) numbers. “We make fluid milk, of course,” she says. “There are regular pasteurized products, such as homogenized, skim, 1%, 2% and chocolate milk that you find in every store, but we also have specialized products, such as Calcium Plus milk, which are value-added products, if you will. Farmers Dairy also makes Ultra-High Temperature (UTH) milks that go through a high-heat process to make them shelf stable. It comes in those little tetra packs you see for milkshakes and drinking boxes, which we do as well.”
That list just covers milk. Farmers Dairy also produces a variety of protein drinks, ice-cream, yogurt, sour cream, cottage cheese, butter, margarine, cream, milk powder and—though it’s not dairy—juice.
Why a cooperative?
Farmers’ cooperatives are organizations in which local farmers pool their resources to produce, process and market their products under one brand. Unlike investor-owned firms who pursue profit maximization objectives, cooperatives strive to maximize the benefits they generate for their members.
Cooperatives are a great business venture for smaller farms that, alone, find it difficult to compete against larger companies. By coming together as one large business entity, these small farms become serious contenders in the marketplace, reaping the significant advantages of economies of scale that are not available to its members individually.
If cooperatives weren’t available, small family farms would be less likely to survive. For example, family farms might not be able to justify purchasing a piece of machinery for their own use. Alternatively, they might not have the means of transportation to deliver their products to market; if they do, the small volumes of production may put them in unfavourable negotiating positions with respect to intermediaries and wholesalers. Not to mention the relatively high interest rates from commercial banks on small loans, or even outright refusal of credit, due to lack of collateral.
Acting as an integrator, a farmers’ cooperative collects the output of its members and delivers it in large aggregated quantities through marketing channels. It can also raise higher loan funds at better rates because of its large size, while distributing loans to its members on the strength of mutual or peer-pressure guarantees for repayment.
For Farmers Dairy, the distribution component is particularly beneficial for Nova Scotia. “The population in our province is quite spread out,” Brown explains. “Halifax is pretty dense, but beyond that, the cities are few and far between.
Distribution can be quite challenging. We use combination of trucks and independent drivers that take our products around, and we do home delivery as well.”
Challenges in the dairy sector
Being a member of a cooperative doesn’t mean problems melt away. On the contrary, there remain several challenges in the dairy industry. “It’s a very, very competitive market out there,” Brown maintains.
“Some people look at fluid milk as a simple commodity, but we don’t like to think of it that way. We think there is value in the way we package our product versus another company. We also think there is equity in our brand name and that our customers agree.”
At the moment, Farmers Dairy has the biggest market share in Nova Scotia, with a stronghold in the Halifax area—where most of the province’s population resides. Still, there are three big dairies in the area, scrambling for business in the bigbox grocers and convenience stores, as well.
“Dairy margins are incredibly and notoriously thin,” Brown adds, “so everything you do is of greater significance than, say, another industry with a healthier bottom line. The decisions we make can really impact our profits. From a supply chain perspective, which is my expertise, we try to leverage that expertise as much as we can, because every dollar we save goes right to the bottom line. So a well-run supply chain is imperative, if you want to be competitive.”
For those who purchase Farmers Dairy in Nova Scotia, they are doing more than just helping the economy; they are also helping the environment. Buying local is a growing trend across Canada and Farmers Dairy is happy to help. “It’s extremely important here, in fact, our marketing campaign is all about it: local community and local farmers,” Brown says. “I think we are a perfect example of how you can buy and support local. The milk comes from here, we package it here and we don’t import things from other provinces (which adds to greenhouse gas emissions). It’s sort of a feel-good thing to be a part of.”
Brown says Atlantic Canadians have always prioritised buying from local businesses. “I think there is a sense of loyalty here,” she continues. “Nova Scotians are just typically like that. There is a point beyond which people won’t choose local product— maybe for price or personal taste—but for the most part, people want to support local businesses and really take pride in doing so. In fact, companies that target the Maritimes need to have those regional considerations.”
The Farmers Feeling
Farmers Cooperative Dairy has seen huge success in Nova Scotia and all over the Maritimes, and the cooperation believes there is room to grow. “In the future, we want to be the most successful dairy in Atlantic Canada,” Brown says. “That is our mission and we talk about it all the time. It is a dynamic thing. To do that, we need to stay on top of things and keep competitive.”
There is little doubt Farmers Dairy will continue to succeed in bringing what they call ‘the Farmers Feeling’ to all of Atlantic Canada.