Marigold Foods comes of age: innovative subsidiary key to National Dairy Holdings

Dairy Foods, Dec, 2002

MINNEAPOLIS--For nearly a century, Minnesotans have known that the Kemps name stands for quality dairy products. But over the past two decades, guided by a separate pair of supportive parent companies, Marigold Foods, with its portfolio of Kemps branded products, has blossomed. Like other local dairies, Marigold started out taking baby steps, with a strong in-state brand presence. But starting in the 1980s the company became a daring ingenue blazing new trails of product innovation. Now it is undergoing another transformation into a sagely industry veteran with facilities in several states, and a share in a distribution network spanning much of the country.

The Minnesota Kid has come a long way, and the best may be yet to come!

The 2001 sale of Marigold and its sister company Crowley Foods to Dallas-based National Dairy Holdings (NDH) sparked the latest phase in the 88-year-old company's maturation. As recently as 1994, Marigold, then owned by Dutch dairy conglomerate Wessanen USA, operated six plants, all of them in the upper Midwest. It now operates ii. Two were added before Wessanen NV sold its U.S. holdings to NDH, three more distant operations came under the Marigold umbrella thanks to the new parent company, a joint venture of the Dairy Farmers of America cooperative and three Texas dairy veterans. The addition of these plants in Cincinnati, Kentucky and Salt Lake City (a result of the Dean-Suiza merger of 2000) and more importantly, the connection with National Dairy Holdings, make it no longer possible to view Marigold as just a regional player.

"There's no question that being part of National Dairy allows us to follow our customers as they grow, and to expand our distribution channels," says Jim Green, Marigold's president and CEO.

"As a $750 million company, we feel confident that we have the resources to do business with anybody' adds V.P. of Sales Greg Kurr.

With the very recent announcement that National Dairy Holdings itself plans to merge with another overgrown regional player (HP Hood of Chelsea, Mass.) it's anyone's guess as to what the future may hold for Marigold. It's easy, however, to take stock of the company's accomplishments. A bit of research on Marigold reveals stories of growth and expansion and pictures of product innovation and savvy marketing, and it becomes clear why Marigold is being honored as Dairy Foods' Processor of the Year.

From the land of lakes and hockey, eh

A few years ago Marigold introduced a special line of rotating ice cream flavors called Land of 10,000 Flavors, a word play on the Minnesota's official nickname, Land of 10,000 Lakes.

"It was a multi-year program designed to reflect our upper Midwest heritage," says Rachel Kyllo, Marigold's v.p. of marketing. "We had flavors like Below Zero and Hockey Puck, some of which have found their way into our permanent lines."

That heritage goes back to 1914 when the Kemps brand was first created by a small family-owned creamery in Southern Minnesota. In 1961, slightly ahead of the mergers and acquisitions that have reshaped the industry in recent decades, Kemps Ice Cream Co. and two other dairies, one in St. Paul and one in Wisconsin merged to form Marigold Foods.

After six years of growth, Marigold merged with Ward Foods in 1968. Ten years later, Ward Foods sold Marigold to Wessanen. The year was 1978, and Marigold was an $86 million a year company. Over the next 22 years the company grew substantially through acquisition. In 1979 it purchased Clover Leaf Creamery, of Minnesota's Twin Cities. In 1980 it acquired the eastern dairy division of Fairmont Foods, and entered a joint venture with Associated Milk Producers Inc., a partnership, which stands today. After a 13-year break, Browns Velvet Ice Cream was picked up, and then Wisconsin's Cedarburg Dairy. Distributor Becker's Dairy, and Gillette, Nebraska, and Oak Grove dairies followed during the industry-wide consolidation frenzy of the 90s.

As Marigold Foods grew larger under the charge of Wessanen, it also became more sophisticated. While much of the industry was looking for efficiencies of scale, few were willing to reinvest the way Marigold did in capital improvements, but more importantly in marketing and R&D.

"The company has always been committed to investing in marketing," Kyllo says. "We've been using outdoor advertising consistently for more than 15 years. And we've got dynamite packaging that just jumps off the shelf."

During the 22 years under Wessanen, Marigold became a leader in the frozen yogurt segment, it practically invented a new category of yogurt juice blends, (see story below), it invented squeezable sour cream, and introduced some of the liveliest packaging and most clever ice cream flavors in the business. Consider the premium dark chocolate peanut butter flavor, and its fabulous name - Deep Dark Secret. No surprise that Marigold was named Dairy Foods' New Product Company of the Year in 1999.

Visit one of Marigold's customers' stores and take a look at both the