This story was revised on Jan. 10, 2011, to correct a reference to milk prices. According to the Maine Milk Commission, dairy farmers were paid a minimum of roughly $18 per 100 pounds of milk in November.
PORTLAND — Thirty years ago, about 25 dairies were operating in Portland.
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Today, the few that remain are the survivors of consolidation that swept the dairy industry nationwide.
Portland-based Oakhurst Dairy, a family-owned business, has escaped consolidation, mergers and acquisitions. With a strategy of Maine-centric branding, the company competes in New England against dairy companies many times larger.
“They help drive the local factor. (Oakhurst), probably more than the others, counts on Maine cachet, linking to the idea that milk comes from local farms,” said Julie-Marie Bickford, executive director of the Maine Dairy Industry Association.
“We have been able to stave off being bought by maintaining a strong brand identity. People know what we do and what we stand for,” Oakhurst President and Chief Operating Officer William Bennett said during a tour this week of the Oakhurst production plant on Forest Avenue.
Bennett and his siblings are the third generation of Bennetts to run the dairy. The company was launched on Woodford Street in Portland in 1921 by Bennett’s great-grandfather, Stanley T. Bennett.
Today, five of his grandchildren run the company. Aside from William Bennett, John Bennett is vice president of operations, Althea Bennett McGirr is director of customer relations and Jean Bennett Driscoll is executive assistant. Stanley T. Bennett II is chairman and CEO.
William Bennett said his grandfather would be shocked if he saw the scale and automation of the current operation.
Every day, roughly 10 tanker trucks — some carrying 7,500-gallon tanks — deliver milk to the 65,000-square-foot Portland plant from dairies throughout Maine.
From the trucks, raw milk is piped to storage tanks and then to the processing area, where it is run through one of two “high-temperature, short-time” pasteurization machines. The process heats the milk to 170 degrees for about 20 seconds to slow bacteria growth. Next, the milk moves to the homogenization machine, which breaks fat into smaller globs that won’t separate in the bottle.
Oakhurst fills bottles in a bustling packaging room, where conveyors carry empty containers toward a filling machine. The bottles are capped, packed in crates and carried to one of two coolers. Crates are stacked on pallets and shipped out to supermarkets, convenience stores, restaurants and schools.
From cow to supermarket can be as short as three days, Bennett said.
The company processes between 130,000 and 150,000 gallons of milk every day and 90 percent of Oakhurst’s sales come from milk, said Bennett.
Oakhurst also makes cream, whipped cream, half-and-half, butter, cottage cheese and chocolate milk, as well as orange juice, ice tea and other fruit drinks.
The company has distribution plants in Waterville, Bangor and Presque Isle and plants in southern New Hampshire and southwestern Massachusetts.
Oakhurst is one of a few remaining independent dairies in Maine.
The big players are $2.2 billion-revenue HP Hood, which is based in Lynnfield, Mass., and operates a dairy in Portland, and $11.2 billion-revenue Dean Foods Co., which owns the Garelick Farms dairy in Bangor.
Oakhurst, with annual sales of $110 million, 240 employees and operations in northern New England, is small.
“Twenty-five or 30 years ago, we were a big dairy in a sea of little dairies. Now we are a smaller dairy,” said Bennett, who attributes the company’s success partly to reputation.
Bennett declines to discuss recent sales trends, but said his challenge has been maintaining profitability during and after the recession. He said sales in 2009 were strong, but flattened in 2010.
“Last year we benefited from fuel prices coming down, but now they are coming back up. Competition is tough and margins are thin. It will be a tough year,” he said.
Bennett said the company has no immediate expansion plans. His immediate goals are boosting efficiency and productivity and reducing energy, electricity, water and sewage costs.
In the last few years the company installed solar panels at its Portland and Waterville sites, a move Bennett said saves about 10,000 gallons of fuel oil every year. Fuel oil prices this week were near $3 per gallon.
Bennett said Oakhurst spends a lot on advertising, and emphasizes that its products do not contain artificial growth hormones, which are FDA-approved and used by some farmers to boost milk production in cows.
About 10 years ago, Oakhurst was sued by Monsanto, the company that markets the growth hormone rBTS. Monsanto said Oakhurst’s claims implied rBTS milk was unsafe. The dispute was settled out of court and was expensive, but Bennett said the publicity reinforced Oakhurst’s image as a supplier of natural, healthy milk.
“We never disputed the science, we just wanted to let our customers know it was not in our milk. It wasn’t bad publicity,” he said.
Oakhurst gets milk from 74 suppliers from around the state.
According to Bickford, prices paid to dairy farmers have been less than the cost of production for a couple of years. Many farmers make ends meet by selling hay, crops or livestock for beef.
For instance, Oakhurst supplier Eddie Benson, who runs Benson Farms in Gorham, said he earns extra cash selling compost.
Bickford said minimum milk prices are set by the federal government using a complicated formula based on a variety of factors.
According to the Maine Milk Commission, the minimum price paid to farmers was roughly $18 per 100 pounds in November, the last month prices were published.
Benson said dairy farmers sometimes blame producers, including Oakhurst, for low prices.
“But the gripes against Oakhurst aren’t fair,” he said. The company pays at least market rates and even pays incentives to farmers who keep clean operations and take extra steps to minimize livestock overcrowding and milk contamination.
In addition, he said, Oakhurst has helped build a market for Maine milk.
“They have done a really good job of promoting a Maine-grown products and marketing milk to people in Maine,” he said.
Jonathan Hemmerdinger can be reached at 791-6316 or:
jhemmerdinger@mainetoday.com
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