Burnett Dairy Co-op: Alpha, Wisconsin

Rural Cooperatives, July-August, 2008

Q: What is the Burnett Dairy Cooperative? The Burnett Dairy Cooperative (BDC) has its roots in two creameries, the Wood River Cooperative Creamery (established in 1896) and Branstad Cooperative (established in 1897), with a long tradition of serving dairy producers. BDC was created when the two smaller co-ops realized that only a larger cooperative could remain viable as a place to sell milk. The two cooperatives merged in 1966 and became the Burnett Dairy Cooperative.

Today, the Burnett Dairy Cooperative's main facility in Alpha, Wis., is a rural complex handling milk, whey, a retail cheese store, bulk and retail petroleum, hardware, propane, a feed mill, grain storage, tires, small engines, agronomy services and a rental shop. The Alpha site includes the cheese factory, corporate offices, the cheese store, the feed mill and grain storage facility, and a feed, fuel, fertilizer and hardware store. BDC also has two sub-locations for propane tanks and a fuel tank depot. BDC is owned by the people that use its services and it exists to serve its members.

A few years after the Burnett Dairy Cooperative was formed, BDC started making Italian cheese. BDC was one of the first cooperatives in the United States to enter into this venture and make this "new" type of cheese. Today, Burnett is recognized as a world champion cheese maker.

The mill side of the business has grown, too. Both founding cooperatives had their own mills. Slowly, over time, the mills were consolidated into one mill located at Alpha.

At present Burnett Dairy is the last remaining dairy plant in the county.

Q: How many members does the co-op have?

BDC has both active and voting members. There are about 3,500 active members of the cooperative. Voting members must have at least $5,000 in qualified agricultural sales. Burnett has about 350 to 400 voting members.

Q: Although the co-op's primary income-producing commodity is cheese, you also sell fuel, fertilizer, feed, tires and other items. How did the co-op get into this level of diversification?

While it is true that BDC makes a "commodity cheese," our cheese makers have crafted the product so that its attributes meet our customers' needs. That limits our exposure related to selling in a commodity market.

The cooperative has mostly undertaken internal growth. BDC has taken small steps to make sure the production needs of members are met and, with that in mind, diversification has grown to include propane, small engines, tire and light automotive repairs, fuel, a custom spraying application, lime spreading, fertilizer, nutrient consulting and all the hardware items needed to keep our members' farms or other small businesses going.

BDC is here to serve its members, and with that comes the need to provide diverse services. BDC is located in a great spot, at the northern edge of a commercial agriculture region, next to prime lake and recreational lands and near vast forests.

Q: Burnett reached a milestone in 2007 with more than $100 million in sales. Can you share some of the major strategic decisions the co-op has made that has led to this growth and success?

The strategy is very basic: provide good service, good value and make money so that the cooperative will be here in the future to serve its customers.

Q: Tell us about some of your major awards for your cheeses. Do these influence sales?

BDC began Italian cheese-making at the start of the cheese's popularity--just as pizza was becoming a major part of the American diet. To our cheese makers' credit, we entered a world cheese contest and took not only first place, but also grand master cheese and cheesemaker. We are one of the few, if not the only, U.S. cheesemakers to win that honor.

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The real winner is the customer, because the cheese that we enter in the contest is the same cheese we make every day. When we win a 'best in class' --as we did this year in 'Aged Provolone' (also taking second place)--it's an award for the great milk supply from our farmer-owners and the cheese makers who crafted the cheese.

The awards are a great way to get recognition in the marketplace, but to keep customers, we need to deliver the product the way they expect it, every time.

Q: Other than having an online retail store, what other options is Burnett considering to increase marketing of your products?

BDC is starting to look at more interactive ways to meet new customers both for the dairy and agricultural supply areas of operation. The company is starting to focus more on marketing events. We work the shows as either a participant (for example, through the Wisconsin Milk Marketing Board) or create our own trade shows or educational programs. Both opportunities give BDC a chance to develop long-term relationships that should result in better sales opportunities.

Q: You recently closed the Webster Coop due to operating losses. What happened with Webster, and what steps did the board and management take to address that situation?

There were mixed feelings about the Webster Co-op merger. Webster did bring to BDC the benefit of recreational accounts for propane and other services. However, the Webster co-op was not located on the main highway so it did not have a good exposure to non-local customers. Additionally, several other convenience stores were built in the area, and the feed mill section of the Webster plant did not have sufficient volume to justify a stand-alone location. In the end, it was more economical to close the plant. There just wasn't enough customer traffic to justify the second location.