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Kalona Supernatural

a super natural way of doing business

Kalona SuperNatural makes dairy products with milk from small Amish and Mennonite organic farms. The creamery is about 60% farmer owned and the milk, sour cream, and other products are minimally processed, non-homogenized, and certified organic. Kalona’s been a supplier to People’s Food Co-op since 2010. Both the Rochester and La Crosse stores currently stock their yogurt, butter, sour cream, cottage cheese, and milk.

Late one recent afternoon, Phil Forbes and Sara Rissi of Kalona SuperNatural drove out to a dairy farm near Kalona, Iowa, with your PFC reporter. We parked the truck at the farmhouse. A woman in a long, light-colored dress came out of the house, and when she saw Phil Forbes, she smiled and waved.

“David’s gone to the neighbor’s,” she said.

“That’s all right,” Phil said, “we’re just going to have a look at the barn.” Phil, Sara, and I walked down the gravel drive to the barn. “David will be over at the neighbor’s—it’s hay time and they all pitch in.”

 


Kalona SuperNatural started as a farmers’ creamery in 2004. A group of farmers wanted a local processing plant for their organic dairy products. Ten farms came together to start the creamery. In 2010 they changed the name to Kalona SuperNatural. They now work with 80 organic dairy farms—35 of those are in the Kalona, Iowa area.

David M. Miller’s farm is typical of the farms that make up the Kalona producers. Miller’s farm has 35 cows. The average herd size for a Kalona SuperNatural dairy farm is 35 to 40 cows; a couple of the farms have 10 dairy cows that are milked by hand.


Day 1, Day 2

Kalona is a few miles south of Iowa City. I was in the area for a co-op conference of about 140 co-op people, and one of the big discussions in the room was the recent news that Amazon planned to purchase Whole Foods. This was the cause of some alarm in the co-op world. Amazon is basically a logistics company that eats retailers. Amazon started by eating bookstores; lately it’s been going after clothing retailers. So many co-op workers, who until this month liked to order things from Amazon, were suddenly being asked to rethink their position.

Business people like to quote Jeff Bezos, the CEO of Amazon, because he’s been able to build such a big company. It is pretty amazing when you think about it: he has a retail business without any stores (until recently) and a logistics company that owns no trucks or shipping. He’s actually pretty hostile toward the delivery people who bring the packages to your door. He’d rather replace them with robot drones. This, too, is remarkable; it’s like the owner of a coal mine who hates his miners, though I suppose that’s not unusual in the history of famous American business leaders.

Jeff recently put out his annual statement to his investors and like other business gurus, such as Warren Buffett, Jeff’s annual letter was widely quoted in the business press (unlike Warren, though, Jeff pays no income taxes because he lives in Washington State). Jeff explained in his letter that Amazon is a “Day 1” company. When companies go to “Day 2,” they are old and slow and in a death spiral. They are no longer nimble and hungry. Jeff says Amazon is a Day 1 company and very hungry still.

Back at the farm, Phil and Sara are showing me around David’s farm. David has a small creamery room. It’s maybe 12 x 10 feet. There’s a stainless steel box in the room where the milk is kept cool. It’s about the size of a very small car. It holds a few hundred pounds of milk.

“Every two days,” Phil says, “our milk truck comes around and picks up the milk. Most of our farmers are Amish and Mennonite. We give these guys a market and work with their culture and religion. A lot of creameries won’t bother working with small farms such as this one. A farm with only ten cows will only have 250 pounds of milk for pickup.

“It’s not just the farm economy. It’s the whole regional economy, too. The economy here [in SE Iowa] is excellent. Kalona has become like Lancaster, Pennsylvania. That’s because you have small farms that are buying and selling things in the local community.”

Phil’s a tall, thin Westerner who’s been working with Kalona for nine years. He stopped in his consideration of the positive impact Kalona has had on the local economy when he noticed that a manual hand crank was attached to the top of the stainless steel milk box. It looked like an old-fashioned hand-cranked drill that you might see in a museum of old woodworking tools.

“I hadn’t noticed that crank there before,” Phil said. “You need to stir your milk five times a day,” he explained. “Most farms have that automated. Even some of the Amish will get some kind of engine (diesel’s okay, electric isn’t) to do something like this. But David Miller comes down here to his barn five times a day to hand-crank the milk.”

The Kalona system is very careful to maintain quality. They work very hard to surpass USDA, FDA, SQF, and Iowa Dairy standards. And it’s done by working with farmers who are willing to come out to their barn five times a day, every day, to turn a crank on a box of milk.

 

A tale of two technologies

A large part of the Amazon business model is its ability to leverage the hype and excitement around new technologies to capture markets. That was one exciting piece of technology in that Iowa dairy barn. The David Millers of the world, with their hand-cranked solutions and attention to detail, are the ones who’ll still be in business for the next generation. For the long haul, I’ll put the hand-cranked model up against the robot delivery drone any day.

In many ways, co-ops are like David Miller’s farm. Your food co-op isn’t a Day 1 business, it’s not even Day 2. The co-op paradigm is that hand-crank milk box. The co-op, like David Miller’s farm, is Day 0. If we were any less primitive we’d be knapping flints off of rocks. But we’ll be here long after Amazon/Whole Foods shuffles off the stage.

When the crunch came for bookstores a few years ago, some of the small independents were forced out of business by the competition with Amazon, but the ones really hurt by Amazon’s advent were the big-box stores like Border’s, B. Dalton, and Barnes & Noble. Those big stores, such as Border’s Books, didn’t survive, while many of the small neighborhood bookstores weathered the flood of Amazon/Kindle enthusiasms. Co-op groceries are similar to those small neighborhood bookstores. Co-ops do something that cargo cults like Amazon can’t imagine doing. We support and celebrate the local and the painstaking because it’s good for your local economy, your neighbors, and because it’s often better food—it’s good for you.