Companies founded by California’s famed Gallo brothers could provide essential ingredients for special occasions. Ernest and Julio’s wineries would supply the wine while Joseph’s dairies could supply the cheese – and what special cheese it is.
Joseph Farms, established in Atwater, Calif. by the late Joseph Gallo, produces a varied line of cheeses that are hormone-free. Indeed, the family-owned farming and dairy enterprise was the first U.S. cheese producer that could stamp its cheeses with a “No Artificial Hormones” label with the government’s blessing.
Recognizing growing consumer concerns about food purity, and committed to making the highest quality cheese possible, the company doesn’t treat any of its livestock with controversial substances such as rBST or rBGH. The decision was not only driven by customer demand but also by information provided by veterinarians who indicated that injecting cows with hormones simply wasn’t healthy. Unfortunately, the substances are widely used. According to Joseph Farms, veterinarians estimate that 95 percent of all dairies use some type of artificial hormones such as reproduction hormones, milk letdown hormones, growth promoting hormones, vaccine or shock reaction hormones, or steroid anti-inflationary hormones. Joseph Farms is among the remaining 5 percent. “Not many companies can make the hormone-free claim, so we’re pretty unique,” says Carl Morris, general manager and chief operating officer.
TOTAL VERTICAL INTEGRATION
Product purity has always been top priority with Joseph Farms, and that is reflected in its vertical integration, an arrangement that encompasses everything from feed cropping acreage and livestock management to the milking and cheese-making operations.
One of the largest U.S. dairy operations, Joseph Farms’ is staffed by 500 employees who work at the five dairies – all within 10 miles of each other – and the one cheese plant. Farming operations include nearly 15,000 acres of combined corn, grain, alfalfa and irrigated pasture. The enterprise boasts more than 34,000 head of livestock, including 17,000 cows that produce the milk that goes into the cheeses. The cheese plant provides a ready market for the 330 million pounds of milk the dairies produce each year.
Vertical integration helps set Joseph Farms apart from similar operations. The company grows its own feed, milks its own cows, produces and packages its cheese, and processes whey products derived from its milk. “Our one plant just outside of Atwater processes about 110,000 gallons of milk each day, which produces just less than 100,000 pounds of cheese,” informs Morris, about the seven-day-a-week operation. “We not only produce our own milk and cheeses, but we can package the cheese with our cut-and-wrap technology that’s located on site.”
The bottom line is quality, he adds. “Total vertical integration enables us to closely monitor the quality of the milk and cheese to maximize product quality for the consumer.”
FROM GRAPES TO COWS
The Joseph Farms story began after World War II in the Gallo family vineyards of central California’s San Joaquin Valley, where Joseph Gallo acquired land and brought it to its highest grape-growing potential. While his brothers became famed winemakers, Joseph Gallo’s gaze drifted in other directions. Subsequently, in the 1970s, he branched off on his own, growing other crops and cultivating cattle to expand into dairy and beef markets. He established Joseph Farms in 1979 with 4,000 cows. As new opportunities arose, his grape growing activities took on decreasing importance in his overall business plan.
In the early 1980s, Joseph Farms was shipping surplus milk hundreds of miles out of state due to California’s overabundant fresh milk supply. As a result, Gallo took his business in yet another new direction. In 1982, he built a cheese processing plant on a site adjacent the company’s largest dairy and, using only milk from his own herds, began producing premium California cheese. By 2001, he stopped growing grapes altogether to focus on the milk and cheese. Joseph Gallo passed away in 2007, but his son, Mike Gallo, now runs the business and carries on his father’s legacy
NEW MARKET OPPORTUNITIES
Today, the company’s cheese is the top-selling retail brand produced in California. Currently, 90 percent of its packaged products are sold under the Joseph Farms brand name. Cheeses are available in 20 states, distributed mostly through supermarket chains, wholesale clubs and independent retailers and distributors in the western, southwestern and northeastern United States. In addition, products are available in Mexico, the South Pacific, Guam, Japan, and a growing list of other developing markets.
“Our main sales are in the American West and Southwest, but Mexico represents a strong and rapidly growing market,” says Morris. “We’re also shipping bulk cheese to areas such as North Africa, Europe, Asia and Indonesia. We’re even going to be selling cheese in Beijing, China for the Olympics. So the international arena is a big growth area for us.”
The company’s natural cheese products include cheddar (mild, medium, sharp and extra sharp), Monterey jack, pepper jack, marble jack, marble cheddar, mozzarella, Colby, longhorn, Muenster, Swiss, American and provolone. All cheese varieties are packaged in a range of sizes and styles such as slices, shreds and balls.
Quality and purity of products are primary concerns. Cheeses are produced without milk protein concentrate, casein or caseinates. Also, the company doesn’t use animal-derived rennet, which makes its products a strong choice for vegetarians and people with other dietary restrictions.
Along with its extensive cheese line, Joseph Farms offers a unique and innovative whey protein product. The company built a whey processing plant in the late 1990s and now processes and sells whey protein isolate. “It’s a high-quality whey protein product used in high-end products such as sports nutrition drinks, protein powders and the ‘power’ bars,” describes Morris.
Whey protein isolate production offered new market opportunities, as it taps into the nation’s growing health consciousness, and it’s of great interest to various consumer groups such as athletes, bodybuilders and weightlifters who require high amounts of quality protein in their specialized diets, as well as to vegetarians who look for alternative protein sources. “Overall, it’s a very interesting market,” comments Morris. “There’s a huge demand for whey proteins and whey protein concentrates. But we’ve taken it to a higher level with our 90-plus percent whey protein isolate. At that level, the market becomes smaller, because the isolate is a much higher value product processed and sold at a higher cost, and we’re the only producer west of the Rockies.”
AWARD-WINNING ENVIRONMENTAL EFFORTS
Company integrity not only positively impacts product quality but also how products are made. The company exercises diligent responsibility to the community and environment, setting itself up as leaders in environmental practices and agricultural habitat conservation. Essentially, Joseph Farms won’t sacrifice the environment to ensure its own profits. As such, the company continuously monitors its operations to ensure a high level of compatibility with the surrounding landscape.
The company’s efforts have garnered it many prestigious awards. Most recently, Joseph Farms received the 2007 IDFA Innovative Dairy Farmer of the Year award. Co-sponsored by the International Dairy Foods Association and Dairy Today magazine, the award recognizes U.S. dairy producers that apply creativity, excellence and forward thinking to achieve greater on-farm productivity and improved milk marketing. Joseph Farms earned the award for its ongoing commitment to environmental responsibility, effective public outreach and innovative operations.
Technological innovation is exemplified by the company’s use of a methane digester at one of its dairies to convert manure into electricity while improving air quality. Implemented in 2004, the methane digester system generates power for Joseph Farm operations from the company’s own waste. Specifically, the digester is a seven-acre anaerobic covered lagoon that generates biogas that’s then sent to two electrical generators. These generators provide as much as 80 percent of the power necessary to operate the cheese plant. Joseph Farms was one of the first California dairy operations to build a digester, and it invested over $2 million into the project.
As Joseph Farms moves forward, the company plans to nurture current market opportunities as well as seek out new ones. “We are pursuing opportunistic growth that makes sense,” says Morris.
In terms of territory, that means Mexico, the eastern United States and international markets. In terms of products, that means developing new cheeses and innovative, consumer-convenient packaging. As Morris indicates, it’s all about meeting customer needs, whatever and wherever they may be, in an efficient and profitable – and pure – fashion.