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Burnt Chimney, VA
Type of Operation: Creamery
Size of Operation: 500,000 gallons of milk processed annually
Years in Business: 11
Farm Credit Partner: Farm Credit of the Virginias
Years Working with Farm Credit: 11
Identifying both an untapped market niche and a way to differentiate itself and its products has firmly established a Virginia creamery founded by two long-time dairy producers.
Donnie Montgomery and David Bower were looking for a way to add value to their product and overcome two critical business challenges: low milk prices and rising land prices, which reduced the feasibility of expansion. They launched Homestead Creamery in 2001 to process all the milk produced by their now 220 combined cows into a variety of dairy products, including milks, cream, butter and more than 20 flavors of ice cream.
Recognizing a growing consumer preference, most of these products are all natural. An onsite retail store underscores the locally produced aspect of their business. “We wanted to be a destination and have food with a story, with an experience,” says Donnie. To that end, the creamery also hosts an annual “Farm Day” customer appreciation event. Capitalizing on another consumer preference, sustainability, Homestead Creamery packages its milk almost exclusively in recyclable glass bottles, providing another point of differentiation in the market.
While the bulk of Homestead Creamery’s sales are to the wholesale market, including local and regional grocery store chains and colleges, a growing number of its customers don’t even have to leave their homes: five years ago, Donnie and David introduced a home delivery service which now consists of four delivery trucks serving 1,200 customers. With on-board freezers, refrigerators and dry goods areas, Homestead Creamery delivers its own and up to 150 other staple products, from eggs and bread to packaged meat and frozen pizzas. Consistent with their branding, though, Donnie says, “We like to have as many local products as possible.” Last summer, that included partnering with a CSA (Community Supported Agriculture) manager, who is also a Homestead Creamery customer, to deliver boxes of locally grown produce.
Homestead Creamery hopes to expand its wholesale and delivery service sales, but adding new products is key to their future strategy, with cheese and yogurt top of the list. Donnie says, “We want to have a buffet of products.”