Marin’s Straus Family Creamery has a unique recipe for success.
If you believe in reincarnation, you might want to give some thought to coming back as a cow at Straus Family Creamery.
The herd works just 24 minutes a day, with the rest of the day given up to leisure activities such as grazing, sleeping and walking the rolling hills of West Marin. Should you become pregnant as a Straus cow, you’re taken out of the milking rotation two months before calving and placed in a pasture area overlooking Tomales Bay, so close to the water that a Little Leaguer with a decent swing could hit the inlet. One other thing to bear in mind as you plan your next life as a Straus bovine: The company is seriously green. So you’d have that whole “good to Mother Earth” karma thing going on, too.
I’m not advocating you go all Shirley Maclaine; I’m just saying you could do worse than spending your days by the seashore as a Jersey. California dairies have gotten plenty of mileage out of the TV ad campaign with the talking cows and the tagline “Happy cows come from California.” None of the cows I met were in that commercial; still, they seemed pretty OK with things. Granted, I didn’t talk with them about the presidential election or the fortunes of the San Francisco Giants, but none of them were talking about organizing a union or anything. (Plus, none of the cows actually spoke English or this story would have been a whole lot different.)
The privately held company, which is owned by Albert Straus and his wife, includes both a creamery and a dairy and has become possibly the most successful organic dairy on the West Coast. Its creams, yogurt, butter, milks and ice cream can be found in supermarkets all over the Western United States (in addition to its own production herd, Straus also buys milk from two other local dairies, owned by the Tresch and Hughes families). Its butter is a national product via Whole Foods Markets (which sells it under the Artisan butter brand), and Straus supplies Trader Joe’s with private-label yogurt and milk. Its products have become staples in the restaurant trade, appearing in the kitchens of such foodie cathedrals as The French Laundry and Chez Panisse. And Straus teamed up to supply boutique cheese maker Cowgirl Creamery, its internationally renowned Point Reyes neighbor, when that company was just starting.
Tucked away in the bucolic West Marin town of Marshall, Straus has not only survived in the dairy business, but flourished—even as many others have failed. At one time, Marin dairies topped the century mark in numbers and supplied more than a quarter of the milk sold in California. In 1988, Marin was 60 dairies strong and a major player in the state from a production standpoint. Today, Marin is home to just 28 dairies, and its annual production makes up half the milk consumed in the Bay Area.
Farmers face bumper crop of damaging issues
The dairy industry has struggled nationally for some time, and the North Bay is no different. Part of the challenge facing dairy farmers has been the slow fade of the family farm. While agriculture has been a dominant industry in this country for generations, in recent years, the lifestyle that’s gone with it has begun to fray at the edges. Farms that have been the family business for 100 years have found that sons and daughters no longer always see the land as the only place to make a living.
Moreover, economic factors are chipping away as well. Encroachment of urban areas on farmland has pushed land values higher, making adding property or leasing pasture land more expensive for farmers. The lure of a big payday has led some farmers to cash their land out, taking their profits and walking away. Corporate farms, armed with more land, better capitalization and economies of scale have made it tougher for smaller dairies to compete. Plunging market prices combined with rising feed costs have shrunk profit margins. And environmental issues such as containment of water run-off have increased costs and forced some farmers to choose between investing in controls or selling off the property.
For farmers, increased feed prices (corn prices soared as crops were diverted for fuel production) are far more than spilled milk. Ironically, the tale becomes sadder as gas prices jump—pushing the cost of feed distribution even higher.
To be sure, these as well as other challenges have chipped away at Straus’ bottom line. According to Hoover’s, a company that tracks both public and private companies, Straus had revenues of just more than $26 million in 2007. Owner Albert Straus declines to be exact about the company’s sales, though he does say Hoover’s is being generous.
Straus, the second generation to work the land in Marshall, is dressed like a gentleman farmer in khakis and a plaid shirt as he gives me a tour of the farm. He’s not the only member of the family who’s worked the land. His sister, Vivien, was the marketing director for the business; she’s now a writer and an actress (she lends her voice to radio ads touting Straus products). Albert’s brother, Michael, handled public relations for the dairy before starting his own PR firm in San Francisco, Straus Communications, which (oddly enough) counts the family business as one of its clients.
And yet, the family business has endured, often times via unconventional means. How unconventional you might wonder? Glad you asked. Straus was the first dairy west of the Mississippi River to convert to organic and become certified. Straus also saves $50,000 a year by deriving power from its flatulent herd. And the creamery operates out of the same property that served as the commercial kitchen for the West Marin cult Synanon, which became famous for, among other things, stashing a rattlesnake in a critic’s mailbox before the Point Reyes Light won a Pulitzer Prize for bringing the cult down.
But we’re getting ahead of ourselves.
It’s a family affair
In 1941, after studying agriculture at the well known center of agricultural knowledge UC Berkeley, German immigrant Bill Straus started the dairy with 23 cows. Though he was a dedicated and innovative farmer, a man and his herd sometimes need time apart. In 1949, Straus traveled to Manhattan for a blind date with Ellen Prins, a refugee from the Netherlands. The date never came off, as Prins had left for a vacation in Amsterdam. Undeterred, the young dairy farmer returned months later and courted Prins for 16 days and, according to family lore, popped the question this way: “Well, I’ve made my mind up, how about you?” Three months later, they were married, and Ellen became a farmer.
The pair were dedicated to the environment, with Bill founding the Tomales Bay Association, an organization that acted as conduit between farmers and a growing number of environmentalists. Ellen founded the Marin Agricultural Land Trust (MALT), along with Phyllis Faber. MALT was the first agricultural land trust in the United States and is still going strong today, having preserved land and development rights for 62 different farms and ranches (about 41,000 acres total). Ellen passed away in 2002, a year after receiving a “Point of Light” award from the White House. Her husband, Bill, died seven months later.
Given his parents’ environmental bent, it’s little wonder that Albert proposed taking the dairy organic in 1990. But the move to be gentler with Mother Earth was as much about business strategy as it was a desire to go green. “After I came back from school [he graduated from Cal Poly San Luis Obispo], I knew we were going to have to do something different if we were going to stay in business,” Albert says. “My father used to say I had a lot of good ideas. The trouble was they cost money.”
Bill Straus thought enough of his son’s ideas to make him a partner in the business in 1977. To go organic, Albert put a business plan together and began looking at how to finance the move. But he quickly found neither local banks nor the Small Business Administration could wrap their heads around the notion of organic farming. Instead, he began the difficult and delicate process of putting the bite on friends and family members.
It took a year to become officially certified organic, and a year to the day after the process began, the family gathered at midnight to watch the first bottle of milk come off the dairy line, in an old-fashioned glass bottle bearing an image drawn by Ellen.
Dressing for success?
Straus offers me a tour of the creamery, but before we step down onto the floor, I need to suit up. This includes a white coat that, if I paired it with a stethoscope, might actually bring my mother back from the grave with a smile on her face. That look is dashed quickly, however, as Straus pairs the jacket with a shower cap. We descend stairs onto a slick concrete floor where there’s plenty of gleaming chrome equipment that takes the raw milk pumped into the plant and prepares it for market. Albert is in his element as he explains how the various machines do different things and how he’s converted quite a few pieces of older equipment to work in a more modern setting.
We walk into the section where butter is churned and ice cream is made, and I can actually feel my cholesterol climb. Its progress is slowed, however, since there’s actually no ice cream being made. I strain to hide my disappointment. I feel as if I’m receiving a tour of AT&T Park but the Giants are on the road.
My spirits are lifted, however, as Albert explains that he has some paperwork to complete before we can move down the road to see the dairy. He offers me some ice cream to help pass the time. “Here, this is a carton I started this morning,” he says, handing me a pint of coffee, a spoon and a cup for a bowl. The ice cream is sweet and smooth, a creamy bit of java that could be every bit as addictive as the cups that represent my caffeine fix in the morning. Fearing the development of a powerful ice cream Jones or a freezy headache, I fight all of my instincts and somehow abandon the carton while it still has a few remnants left.
The conference room at Straus Creamery bears little resemblance to other corporate headquarters. To begin with, lots of company meeting spaces are bathed in fluorescent light with tables carved from handsome dark wood and chairs denoting upscale comfort and smelling of leather. Views often look out upon green space or a stunning skyline where other companies do daily battles of commerce and captains and pirates of industry lay strategy to profit and plunder.
Not at Straus. The view outside the ageing, wood-frame windows is of plastic milk crates climbing toward an azure blue sky and wooden pallets stacked in geometric patterns that might signal beings from another universe that this is the place where they make raspberry ice cream that tastes like summer in a bowl.
In the room, a utilitarian table is surrounded by generic chairs arranged in a haphazard fashion. On one wall hang four black-and-white photo portraits of creamery line workers sporting plastic shower caps, the hats at rakish angles. A print of the Innocent Eye Test by Mark Tansey hangs in one corner. The black-and-white painting shows a cow looking at a painting of cows, while half a dozen scientists watch and record the proceedings.
Not that the room is totally devoid of modern corporate artifacts. There’s a pair of TVs as well as a speaker for conference calls. A whiteboard takes up most of another wall, illustrating delivery of power to the creamery that isn’t any more complicated than prospects for peace in the Middle East. The directions at the bottom of the board warn against erasing the unique artwork, though the date on it is 7/19/07. The board is illustrative of what sets this business apart from others in the dairy industry. While the diagram appears to the outsider as Byzantine, it no doubt is creative, and the warning not to erase shows another Straus trait. There’s a willingness to try new things, but not without a solid link to the past.
Last year and the future
Albert is sitting in the room now, sun pouring in behind him. “2007 was a hard year for us. There was a surplus of milk on the market. We had capital investments to make for our yogurt. It became clear that we needed to make some changes if we were going to survive,” he says. Straus brought in a mostly new management staff to solidify the business and chart a path for future growth.
About 66 percent of Straus revenues are derived from its own brand, while the remainder comes from working with such well known businesses as Trader Joe’s, Cowgirl Creamery and Amy’s Kitchen, as well as supplying ice cream parlors with a base so they can add their own flavors and ingredients.
Yogurt has proven to be the most popular Straus product, though Albert’s favorite product is ice cream, which came about from his experimentation with different flavors. “I do like my ice cream,” he confesses.
Though he won’t rule out some product expansion, for now, Straus is looking to strengthen the existing brand. “We’re looking to grow same store sales for now, rather than grow into new regions or expand product lines,” he says.
This means Straus will stick to doing business in Oregon, Washington, Nevada, Idaho, Montana and Colorado. These markets are established for the company and represent a known entity, something that gives comfort to Straus. “It can be a tricky business. We had solid market research that showed 80 percent of people who were surveyed said they bought 2-percent milk. So we build a plan around this information and go into the market and find that 60 percent of the people were buying whole milk!”
As for the Straus commitment to the environment, Albert is always looking at something new. “We’re looking at doing some solar; though just how we might do it is still something we’re working on.”
Straus has an innovative method in place already to help keep energy costs in check. The dairy collects the substantial manure produced by its herd each day and uses a process that captures the methane byproduct to drive a turbine that produces electricity. The $340,000 project will have recaptured its cost sometime next year, to say nothing of the decreased greenhouse gases produced by the dairy.
So there you have it: A business worth millions, stashed off Highway 1, that believes in Mother Earth, saving money via cow patties and Dutch Chocolate ice cream.
It really is a delicious story.
Author
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Bill Meagher is a contributing editor at NorthBay biz magazine. He is also a senior editor for The Deal, a Manhattan-based digital financial news outlet where he covers alternative investment, micro and smallcap equity finance, and the intersection of cannabis and institutional investment. He also does investigative reporting. He can be reached with news tips and legal threats at bmeagher@northbaybiz.com.
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