More than Milk: Organic Valley Enjoys Growth While Maintaining Values.
Dan Jodarski is an intern at Social Enterprise Associates. He is currently a senior at the University of Wisconsin- La Crosse studying Economics and International Studies. He can be reached by emailing info [at] socialenterprise [dot] net.
Several words come to mind to describe the values of the people I was surrounded with growing up in rural central Wisconsin-hardworking, honest, neighborly, blue-collar. What I didn't see very much of growing up was big business, rapid growth, or economic prosperity. It's hard for me to imagine my hometown of 3,000 people being home to an industry leader or attracting worldwide investment.
But back in 1988, the year I was born, a group of dairy farmers was getting together less than 100 miles down the road and setting out to capture the values of the region in a bottle and sell them to the world. Back then the Cooperative Regions of Organic Producer Pools (CROPP), now more commonly known as Organic Valley®, was made up of half a dozen farmers looking to find consumers that would pay a premium price for their product, organic milk. The founders of the co-op knew Organic Valley's greatest asset was its values-a commitment to sell an honest product that was produced without the use of chemical inputs, antibiotics or artificial hormones along with a dedication to collaboration, shared sacrifice and shared success. The co-op was and remains a farmer-owned and led entity where farmers obtain equity in the co-op when they join and are led by members elected to the board of directors.
Today, with more than 1,600 farms across the U.S. producing well over a billion pounds of milk a year, Organic Valley is a big business. Income in 2010 topped $617 million and projected to exceed $670 million this year. The co-op includes farms from California to Maine producing organic dairy products including milk, yogurt and butter and also a wide range of other organic products from poultry to fresh produce. More about the company's success is available in the 2010 annual report.
But with all this growth and success, has Organic Valley been able to maintain its integrity and uphold its values?
An example of shared sacrifice provides strong evidence it has. In 2009, most dairy farmers across the nation endured plunging milk prices which cut sharply into their income. Organic Valley was able to maintain the price of its milk despite consumers spending less during the recession and farmers facing higher input prices. The institution was able to do this through imposing a strict quota on milk produced by co-op members. Farmers agreed to scale back production or to sell the milk produced beyond the quota at conventional prices. Instead of leaving the co-op and attempting to sell their product elsewhere or cutting costs by giving up organic standards for conventional methods, the vast majority of Organic Valley farmers stayed with the co-op and weathered the storm together.
To me, the commitment and ability to sacrifice for the better of the whole is an expression of the values I grew up around. Organic Valley embodies and maintains these values, successfully selling them to the public in the form of honest products that bring health and wealth to all stakeholders involved. Organic Valley's success demonstrates that consumers today are demanding products with true value and the enterprises of the future can deliver them with integrity.
I believe that business has tremendous potential to bring about social change. For me Organic Valley stands as an especially inspiring example of a business that is turning this potential into a reality. Having a father that is an employee of Organic Valley I have had the chance to meet many of the farmer's that run the co-op and see the good they do first-hand. Seeing the results of their work and how proud they are of it has played a big part in inspiring me to study business in hopes of using my education to serve and advance social enterprises. This is what I'm doing now as an intern for Social Enterprise Associates and what I hope to continue to do into the future.
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