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Distribution Company Helps Small Farmers Expand Their Market

posted on October 11, 2007 at 2:38 PM

The Amish farms near Kalona in southeast Iowa are typically 80 acres … where many farmers are raising and selling their organic produce to distributors and their natural and organic eggs and organic milk to local processors. It is a system that has worked for these farmers for years. But in the opinion of one local businessman -- sales of the products could be improved.

Bill Evans, Kalona Organics: "Actually, I was doing some consulting here at the dairy from a financial standpoint and realized early on that what this facility needed was sales and marketing expertise. And I started to look around at various other businesses in our community and went through the thought pattern of I bet there'd be other business out there that could use the sales and marketing expertise."

In 2005 Bill Evans started a marketing firm, Kalona Organics. The first product marketed was organic milk for "Farmers All Natural Creamery"– of which Evans last year, became part owner and now heads up the operation. Today, Kalona Organics is also markets organic yogurt made in Wisconsin – and Kalona area organic produce … and natural and organic eggs.

Ryan Miller, Farmers Hen House: "We were finding that we were running into a lot of the same customers as the creamery was. You know, they were calling on the them, we were calling on them, and then when Bill created Kalona Organics it just made a natural fit that they could have one person calling on them to sell multiple products.

Farmers Hen House this year expects to process 6 to 7 million dozen eggs for other companies as well as their own brand. Ryan Miller said since signing up with Kalona Organics, their own Farmers Hen House brand has reached new markets and increased sales – up from 10,000 dozen a week to 25,000 dozen a week.

Of the sales, Kalona Organics of course, takes its cut.

Bill Evans, Kalona Organics: "We determine what the market price should be then we take a percent off the top of that."

Evans says Kalona Organics takes an average of 7 to 7 1/2 percent return on the sales of all the products it markets.

The processors and some of the farmers don't mind the expense. Amish produce grower like Joni Miller -- who would allow us to record just the audio portion of his interview -- say the cost is worth it.

Voice of Joni Miller, Kalona, IA: "It leaves us maybe like several hours time, the time we can use to raise another half pallet load of produce."

More produce just may be needed as Kalona Organics founder Bill Evans expects a 40 percent increase in sales this year– up to $6.5 million.

The increase may be due in part to the growth in a couple of large accounts, including sales to the Hy-Vee grocery chain which has more than 200 stores in 7 Midwest states.

Jon Wendel, VP Perishables, Hy-Vee Foods: "We took a close look at the product, researched food safety and everything and determined that they would be a great match for Hy-Vee to enter into business on a Hy-Vee Health Market milk. And that was the very beginning and its carried on to the dairy and their operations got a little larger and in the meantime Hy-Vee is looking at different products that we can develop with them."

As the market share expands for Kalona Organics, so too do the opportunities for the farmers. For example, Bill Evans says the Farmers All Natural Creamery is operating at just 50 percent capacity. And he is confident he can find additional small dairy producers—like Menno Borntager. Borntager, who would not allow us to show his face on camera – hopes the success of the creamery will lead to creation of additional products for his milk.

Voice of Menno Borntager: "My goal is to switch to grass fed entirely. No grain. And they're working on a market, the creamery is working on a market for grass fed cheese."

So far, the marketing arrangement seems a win-win situation for the farmers … the processors … and the retailers. And it is something that the area's Local Food Alliance says is a long time in coming.

Leah Wilson, Johnson County Local Food Alliance: "I think that a business like Kalona Organics is really vital to getting products to market and I think that farmers are beginning to see some avenues that didn’t exist for them before."

For The Iowa Journal, I'm Nancy Crowfoot.


Tags: agriculture dairy eggs HEAT Iowa Kalona Mennonites organic vegetables


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