Was there a better way for the Organic Valley Cooperative to celebrate their 25-year anniversary than with another year of massive growth? The organic food producer cooperative, with an emphasis in dairy, posted an increase in sales of almost 20 percent over the previous year.
Organic Valley, also known as the CROPP Cooperative, increased sales by $141 million last year to record total annual sales of $857 million. The 25-year anniversary provided the perfect backdrop for the Organic Valley Annual Meeting held in LaCrosse last Thursday to look back, as well as forward.
Looking back was the easy part. Copies of a book, recording the history of the cooperative, recalled the story quite well, as did more than a few of the longtime co-op members.
Two of the founding members of the co-op were honored at the meeting. George Siemon, who serves as the cooperative’s CEO, received the Ray Haas Organic Pioneer Award for his service. Meanwhile, Organic Valley Board Member Wayne Peters, was also honored as he stepped down from his board position after 25 years of service. Peters was one of the original seven ‘founding farmers’ of the CROPP Cooperative and served for many years as the board’s president.
“Celebrating the 25-year anniversary of our cooperative makes this year’s annual meeting exceptionally significant and special,” Siemon said. “When we got together 25 years ago, our goal was to save family farms. We saw organic agriculture and a cooperative business model as sustainable way to do this, but we knew we couldn’t do it alone. The hundreds of farmers actively participating this week and all our farmer-owners, partners and supporters throughout the years have made this milestone possible. It’s the cooperation that gives Organic Valley great promise and positive outlook on the next 25 years.”
However, when it came to putting the 25 years in perspective, it was probably a comment by Organic Valley’s Chief Financial Officer Mike Bedessem that stood out most. During his report at the annual meeting, Bedessem showed a projected image of the co-op’s first handwritten financial statements from 1988. That statement showed annual sales for the newly formed co-op of $125,409. Bedessem told the more than 600 people attending the annual meeting that the co-op currently had just done that volume of sales in the last hour since the meeting had begun. That’s right, 25 years later, Organic Valley had sales in one hour that equaled its entire annual sales of 1988. That’s perspective.
The CFO urged the hardworking farmer members and cooperative employees to understand the moment at hand.
“Today is the day to enjoy what has been accomplished in the past 25 years,” Bedessem said. “It’s time to celebrate. It’s time to take one day off and have a celebration.”
While there was plenty of time spent looking back and some sentimental reminiscing about the old days, there was quite a bit of visioning about the future. There was also a lengthy discussion of the present situation as well.
Organic Valley CEO George Siemon may have offered one of the more interesting views of the future. He told the group at one point that the future was no longer about reaching a billion dollars of sales annually and what would happen when they got there, the real test would come in successfully getting to $2 billion dollars in sales annually. Somehow, given this co-op’s propensity for growth, neither amount of annual sales seemed that far off—at least to those attending the annual meeting last Thursday.
Sarah Holm offered another view of the future in a press briefing prior to the meeting. Holm is a young farmer from Elk Mound, Wis., known in the parlance of Organic Valley as a “Gen-O, or Generation Organic, Farmer.” Holm saw the challenge to her generation as continuing the ideals of Organic Valley, while remaining successful in the marketplace.
“Our challenge is to insure the co-op’s future and continue the wonderful culture of a cooperative, owned and run by farmers ten, twenty, thirty years from now,” Holm explained. “We need to maintain that culture. It’s that culture that makes us so unique.”
While the sales, profits and other financial information were a focus of the meeting and a solid gauge of Organic Valley’s growth over the past 25 years, the meeting, like the cooperative itself, had other ideas to contemplate. It was something bigger than the reality of the financials, yet it was probably at the root of the the financial success. The sincerity of the cooperative toward its members and employees came through often during the meeting.
During his report, Bedessem noted that profits were down slightly last year and that was done intentionally to raise the pay price to members facing a tough year farming in many places.
It came out over and over again. Organic Valley Chief Operating Officer Louise Hempstead noted the relatively few consumer complaints. The rate of complaints had dropped below a half of a complaint for every 25,000 units sold.
Director of Sustainability Cecil Wright emphasized the co-op’s commitment to sustainability from the two 2.5-megawatt wind turbines installed near the Cashton Distribution Center to the on-farm sustainability initiatives aided by co-op staff.
Then, it was keynote speaker Anna Lappé’s chance to put Organic Valley’s mission in perspective. Lappé, an author, educator and food activist, is the daughter of Frances Lappé, the famed author of ‘Diet for a Small Planet.’
Anna spoke to a fundamental transformation that has occurred in the 25 years since Organic Valley was born. Central to the transformation is that the farmer and farm worker has moved to be much more visible to the consumer in her opinion. That transformation is reflected in organic agriculture and the mission Organic Valley has pursued over 25 years, Lappé explained.
“It’s a huge honor to join these celebrations,” Lappé said. “As a mother, I appreciate the high quality food Organic Valley produces, and so do my two daughters. As an advocate for healthy food for all, I know that Organic Valley members’ innovative sustainable practices are key to food security. The connection between eaters and farmers has never been clearer to me. We are in this together and thanks to Organic Valley members, we’re healthier for it.”
Despite the discussion of past and future, there was plenty of focus on the present.
How does an organization deal with 20-percent annual growth?
Answering that question in a press briefing before the annual meeting, Organic Valley’s Cooperative Affairs Director Jerry McGeorge emphasized improving infrastructure, including the co-op’s IT (information technology) capabilities,is one of the keys to dealing with the growth. He also noted hiring well was essential to dealing with the rapid growth.
For Organic Valley Director of Sales Eric Newman, the challenge of growth was moving the ever-increasing volume of product. Newman sees lots of market potential both here and abroad.
The key to this future growth and success for Organic Valley may be moving into international markets and partnering with organic producer cooperatives from other countries, according to Newman and others. While the challenges of growing internationally seem great, Organic Valley already enjoys an international market share in Europe, Asia and the Middle East. Additionally, the cooperative has marketed organic beef from Australia in the U.S. It also already has producer members in three Canadian provinces.
Despite a variety of obstacles, the cooperative that was started in a vacant cheese factory on Main Street in LaFarge, Wisconsin 25 years ago, has grown to become the largest organic producer cooperative in the world. Why wouldn’t it succeed in an international market?
Other news and developments reported to those attending the Organic Valley Annual Meeting included:
• the Lorentz Meat Company buy-in by Organic Valley has worked well and 20 percent of the Lorentz’s business is now processing meat for the co-operative
• the co-op added 74 employees in 2012 to keep up with the growth and plans to add another 26 in 2013-there are currently about 700 employees
• Organic Valley products have passed Chinese-certification where they are being sold currently and growth in those sales is expected
• a new “grass milk” pasture-based fluid milk and cheese cannot keep up with demand in the California market, where it has been released
• there are currently 1,834 farmer members in 35 states and three Canadian provinces and there appears to be strong interest among other producers to join the co-op
• ground has been broken on a new office facility in Cashton
• Pam Riesgraf, Edgar, Wis.; and Keith Wilson, Cuba City, Wis.; were elected to the Organic Valley Board of Directors by the membership
• 2012 was the Organic Meat Company’s most successful year in revenue growth