Westward, Yo(gurt)! Steadily Growing Brattleboro Plant Helping Redefine ‘Local’

The Recorder, September 9th, 2015, Richie Davis

BRATTLEBORO, Vt. — Less than 10 miles over the Massachusetts line and just south of Interstate 91’s Exit 1, Commonwealth Dairy’s very name suggests an opportunity that got away from the Bay State.

Built in 2011, the yogurt-making plant has already been expanded twice and exceeded the expectations of its CEO, Thomas Moffitt.

Specializing in Greek yogurt, which it mostly makes for giant supermarket chains, Commonwealth Dairy has ridden the tsunami of popularity for the thick, protein-rich Greek style yogurt that has been dominating the yogurt industry over the past five years with the arrival of Chobani.
“We’ve been off to the races,” said the 40-year-old Connecticut native. “We’ve seen an entire paradigm shift in the market.”

When Moffitt moved back to New England from Wisconsin after getting a master’s degree in food microbiology, he worked buying dairy products for Stop & Shop’s Dutch-owned holding company, but his idea was to start a yogurt company.

While Moffitt was buying $30 million of private-label yogurt a year for Ahold’s U.S. supermarket chains, including Stop & Shop, “The thing I had the toughest time buying was yogurt,” he said. “It was really hard to get the yogurt, and that was part of that light bulb going off. I already knew yogurt growth was astronomical.”

Yogurt sales had been growing at 10 percent a year for a decade — and that was before Greek yogurt had begun to take off. Moffitt understood the value of private label food manufacturing for stores that want to carry their own brand.

He found a business partner in Benjamin Johnson, and together they made a deal to launch an American factory for Ehrmann, a third-generation Bavarian yogurt maker that had been looking to make yogurt here because the market in Germany and Europe has been relatively flat.

At an initial meeting in New York in 2009, said Moffitt, Ehrmann CEO Christian Ehrmann, the grandson of the family farm-founder, “is showing us all these great yogurts. They were doing Greek yogurt already. We were, ‘Wow, this is cool, you have all this great innovation and none of this exists in the market.’ We’d been talking to venture capitalists, angel investors, other big dairy companies in the U.S. who we thought might want to get into yogurt. But these guys were very entrepreneurial and really understood yogurt. They said, ‘We’re in Germany, we’ll let you do what you want.’”

The $32 million investment was originally eyed for Massachusetts, Rhode Island, New Hampshire or New York State — where Chobani and Fage had already set up — but began to focus on western Massachusetts, said Moffitt.

“We didn’t get much traction from the state,” he recalls of that time in 2009 when the stock market had crashed and the state had its eyes set on “big visibility” projects with hundreds or thousands of jobs.

Vermont cashes in

Vermont, said Moffitt, “understood, as the largest dairy state in New England, the value beyond just jobs. Vermont understood the bigger picture maybe even better than we did,” especially since the region had a butterfat deficit, with tankers of cream coming in from the Midwest, and butterfat would be a byproduct of the new plant’s nonfat yogurt production. Today, most of Commonwealth’s cream is shipped to Cabot Creamery’s butterfat plant in West Springfield, Mass.
Vermont offered Commonwealth new-market tax credits in exchange for creating 50 jobs and buying 32 million pounds of milk at its new 39,000-square-foot factory.

Midway into construction of the factory, Moffitt said, when he and his partners “started realizing how big Greek yogurt would be, we shifted to adjust the plant to be able to produce that.”

Producing Greek yogurt — which today represents 70 percent of the company’s product — meant investing in a centrifuge, which is used to efficiently remove all the water and whey from yogurt to thicken it. The company sells its concentrated whey, and the water is filtered and used in the plant.

Today, Commonwealth has nearly 125 jobs after four years, and instead of the 30 million pounds of milk a year Moffitt had predicted, takes between 110 and 120 million pounds of milk a year — 5 percent of Vermont’s milk supply. As part of its agreement with the state, all but 5 to 10 percent of that milk comes from Vermont farms.

“Now all of sudden, I’m having this product that was like the American dream food. It tastes great and was good for you. We grew faster than we anticipated.”

Since opening in 2011, there have been two additions to the factory, including a 23,000-square-foot expansion used for a new processing line, new warehouse space, a new filling machine, fermentation tanks, wastewater treatment improvements and new whey processing and packaging equipment.

Confidentiality agreements prevent Moffitt from divulging the names of the seven large retailers — including “some of the largest in the country” for whom Commonwealth co-packs its Greek yogurt.

“What the co-pack people want is for you to think it came from their factory, so we can’t disclose that,” he said.

But dairy plant codes on store-brand yogurt containers and other evidence, like the trophy at the factory honoring Commonwealth for making 1 million containers of yogurt for a particular supermarket chain, show that the Brattleboro producer makes and packs product for Wegman’s, Costco and Target, as well as other large producers.

“We tend to supply retailers who value quality over price, try to do interesting, innovative things, and we try to do it at a quality that can justify a higher price. It might be a penny or two more a cup.”

‘Local’ yogurt

But when Moffitt got a call in late 2011 from the Brattleboro and Putney food co-ops expressing interest in carrying the locally made yogurt, he tried to explain that it was a private-label producer churning out store brands.

“They started getting really mad, saying, ‘How can you be a Brattleboro dairy and not even sell your yogurt to us?”

So Moffitt developed a Green Mountain Creamery brand and with a freelance designer came up with a package that emphasized the seemingly incongruous Vermont made Greek yogurt, with an iconic Parthenon and Greek lettering.

From 2011 to 2013, Commonwealth was selling 2,000 to 3,000 cases a month of Green Mountain Creamery yogurt.

A couple of years ago, Moffitt hired a sales manager to focus energy on the brand, and it’s now the fastest-growing part of the business.

“It really took off,” he says, and sales have hit 70,000 cases a month, aided in part by the appeal of “buy local.”

Green Mountain is now a top seller at Foster’s Supermarket in Greenfield, as well as Shaw’s and Hannaford.

When he went to New York City to meet with food buyers from Zabar and other retailers, they told him, “This is much better than Chobani, and you’re local!”

“I’m thinking in my head, ‘Chobani is in New York state, and I’m ‘local,’ because all these guys go to Vermont on weekends skiing, and to them upstate New York was a million miles away, and Chobani was this global company, and Dannon, too.”

If that was a shift in his thinking, a bigger surprise still came when Sprouts, the Phoenix-based organic retail chain, invited him to produce a private label yogurt, but the Brattleboro plant was at capacity.

“It was the weirdest sales call I’ve ever had,” he recalls. “When I said ‘I don’t have capacity to do a private label for you,’ the buyer asked, ‘What else do you have?’”

Moffitt explained that there was also the Green Mountain Creamery brand, but added, “It’s only a local brand, sold in the upper Northeast. You wouldn’t want to carry it because it’s an East Coast brand.”

West Coast Green Mountain

The buyer looked over Moffitt’s paperwork and said, “I want to carry this … Look — Our market is Southern California, Arizona, Texas. Only one in 10 people from here are ‘local.’ What they perceive is local is very different from what you might think is ‘local.’ For them, ‘local’ is small, artisanal, locally produced. Vermont is going to mean a lot to somebody who’s living in Las Vegas.”

Sprouts began selling Green Mountain and instantly became the number-one customer for the brand, today selling 20,000 to 25,000 cases of the total 70,000 cases a month.

“They sell the heck out of it,” said Moffitt.

A year and a half ago, Commonwealth built a plant in Arizona to handle its West Coast sales, and the 10,000-square-foot Casa Grande factory now produces about half of the 300,000 cases of yogurt a week produced by the company, including a couple thousand cases a week of organic yogurt.

“We were shipping so much product for private label customers, and it’s very inefficient to be shipping a fresh product to California, Arizona and Nevada,” says Moffitt. Yet because organic milk is in short supply on the East Coast, all its organic yogurt is made there.

“The market’s definitely here, but we can’t get the milk” here, Moffitt said. “As ironic as it sounds, we ship organic yogurt all the way back from Arizona to the Northeast,” including the Green Mountain Creamery organic that’s sold at the Brattleboro co-op. All non-organic GMC yogurt is produced here, including the product sold at Sprouts.

Commonwealth also produces a low-fat Green Mountain Creamery YoYummy yogurt with kids in mind, in 3.5-ounce pouches and in flavors that include grape and cotton candy.

Although plain Greek yogurt is the top seller for the plant overall, maple is GMC’s number-one choice of about 15 flavors. And while its mainstay has been zero-fat yogurt, Moffit says the company is now test-marketing a 2-percent-fat seasonal pumpkin flavor, and it’s also making a 5 percent “full-fat” plain yogurt in its Arizona factory.

“Where Greek yogurt is going next is in indulgent items: dessert type, with higher fat and more sugar,” he says. Because tastes keep changing.

On the Web: www.commonwealthdairy.com youtu.be/pXyAjJe9VsA

You can reach Richie Davis at: rdavis@recorder.com or 413-772-0261, ext. 269