Land O’Lakes Buys Vermont Creamery: 10 Questions for Allison Hooper

On Wednesday afternoon, March 29, news circulated through the Vermont fooderati that Vermont Creamery had been sold to Minnesota cheese-and-butter giant Land O’Lakes for an undisclosed sum (yes, we asked how much, to no avail).

Allison Hooper and Bob Reese cofounded Vermont Butter & Cheese Company from a barn in Brookfield in 1984. Thirty-three years later the business, which changed its name to Vermont Creamery in 2013, brings in tens of millions of dollars annually and employs about 100 Vermonters full time.

While representatives from the creamery and from Land O’Lakes have been forthcoming since news of the sale broke yesterday, many Vermonters were left wondering what it would all mean. Would the company stay in Vermont? What would happen to current employees, and to the farmers from whom the creamery buys milk? Would the chèvre, cultured butter and soft-ripened cheeses be different now?

Today, Hooper took the time to field some questions.

SEVEN DAYS: How does this sale affect the future of Vermont Creamery ?

ALLISON HOOPER: [Land O’Lakes] really recognizes that what we do well is not something they could do well — they don’t purport to understand it or want to change it in any way. They just want to invest in it, and provide us the resources to do what we do even better, and to do more of it. They walk into our aging room and they’re dazzled by our cheeses. They’re not going to tell us how to do that. They’re saying they’re going to take their cues from us.

At the same time, they have huge experience in operations and in HR and IT and all these things that we’ve been inventing as we go along. So, there are areas of the business where we can capture a lot of their expertise.

SD: What about the company’s mission?

AH: Adeline Druart is the [Vermont Creamery] president still —  Land O’Lakes has created a new division in their company for specialty cheese, which is synonymous with Vermont Creamery. So, at Land O’Lakes, she’s a vice president, and she reports directly to the executive VP of dairy foods. She’ll be right at the table when they get all of the company’s divisions together, and she’ll have a strong voice.

The Creamery may be a tiny drop in the company’s total revenue, but they said [it would] have a very prominent position, because they really see that Land O’Lakes needs to pay attention to the kind of things we’ve been paying attention to. Adeline is a very persuasive, strong person, and I think that she is absolutely up to the task of defending the core values of this business and the company mission. 

SD: Will your other employees stay on?

AH: We have 100 employees now, and everybody’s gotten a sign-on letter. They have a great benefits package — more vacation, more holidays. All hourly employees are going to get a dollar-per-hour raise.

SD: What does this deal mean for Vermont Creamery’s production levels?

AH: Land O’Lakes is going to quadruple the business in the next four years. They’re putting some serious investments in our creamery. They’ll connect the two buildings [we currently occupy], and they’ve been looking around at other buildings in the industrial park. They really want to have Vermont Creamery here and to have a foothold in this area, which is so near to northeastern markets.

SD: Will Land O’Lakes use your facilities to make its own products, too?

AH: Land O’Lakes has said they absolutely do not have any plans for Vermont Creamery to be producing anything for [its brand]. We [have been working with] a consumer that [they] don’t sell to, but who they want to be selling to. They work with mass-market consumers, but in order to modernize their product portfolio and their customer base, they really needed to find a [company like] Vermont Creamery to do that. So, our going to market and being available really coincided with their thinking about how are we going to do this.

SD: Will you continue sourcing milk and cream from the farmers and co-ops you currently work with?

AH: As far as the cream we buy from St. Albans Cooperative, as we increase our butter and crème fraiche and mascarpone, we’ll continue to buy from St. Albans. [Eventually], we’ll certainly exhaust their capacity, and we may have to buy milk from New York or look to other places. But it’ll be a while before we get to that point — they’re poised to supply us for a while. There’s a lot of milk on the market right now. So lack of milk is not an issue.

SD: Since you launched St. Albans, your first non-GMO cheese, demand for it has really taken off. Do you think you’ll be able to meet demand for that cheese, given your new access to larger markets?

AH: We’ll certainly have to be much more careful about the growth of that cheese. We’re not going to splatter the world with St. Albans in the same way we will with our other products.

SD: When we spoke last October, you said you’d like to transition  your entire product line to non-GMO eventually. Do you think that’s still possible?

AH: It would be hard to do that right now — Land O’Lakes is a large, conventional dairy co-op — an agribusiness business. So it would not be in their wheelhouse to transition all of our butter and cheese to non-GMO. It’s not part of their thinking or their philosophy.

That said, [Land O’Lakes dairy foods executive vice president and COO] Chris Roberts said to us, “You have your finger on the pulse of things that we don’t. So our job is not to squish opportunities that you seek to exploit, or to change the path you’re on.” So they’re not coming in and saying we have to take St. Albans off the market.

What I’m optimistic about is that, when I sit face-to-face with their [executive staff], we can have a conversation [about these things]. We are like-minded, and we have like values. They totally get what we’re trying to do. They didn’t buy us to shut us down. They bought us to understand how we think and how we approach things. Just as we did with the goat cheese market 30 years ago, we have a lot of storytelling to do, about why high-fat, cultured butter is great, and how it’s different from your dairy-case Land O’Lakes butter. There are a lot of gaps to fill in the market with these products. 

SD: How long did the acquisition process take?

AH: About a year ago, we decided that we would start putting ourselves in the market. Prior to that, Bob and I looked at various scenarios — we did a daily expenses study for an employee-owned stock ownership plan.  But we were growing so fast, and [our consultant told us] that was probably not a good option because of the fast growth.

So we hired a [firm] to [facilitate a sale]. They present your story to a universe of [companies] who might be expanding or looking for an acquisition, then select companies that might be a good fit and do a deep dive on them. We went to Canada and Minneapolis and Europe, and by January we had selected Land O’Lakes.

SD: Why sell now?

AH: For the past 30 years, I’ve been a student of cheese and studied these markets — but it really started as, “Hey, let’s make some cheese! Think Americans will eat this? Of course they will!” [Bob and I] were really good at taking enormous risks — we didn’t have anything at age 25. At some point, the business gets to a certain size, and you have 100 employees and you have systems and budgets and data.

At some point, you’re kind of like, OK, we got it to here. It doesn’t really feel like our company anymore. We hired really good managers; they’re going to innovate and make new products and do cool stuff, but they’re not going to do crazy things. So, at a point, you give it over to the management team and let them get the resources they need to keep going with it.

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