MACHIAS, Maine — The principals behind Maine’s Own Organic Milk Company, also known as MOOMilk, admit there have been both successes and failures in the operation’s first 12 months, but that they are poised for expansion in 2011.
The grand agricultural experiment — to see whether a group of small, Maine farmers could form and run their own milk company — nearly went under last August when the firm was forced to suspend milk production and scramble for investment funding.
“But we’re still alive, we have markets and people like our milk,” MOOMilk Executive Director Bill Eldridge said Wednesday.
MOOMilk was formed last year after Hood LLC, citing a soft market, did not renew its contracts with 10 Maine organic milk producers. There was no other organic producer willing to pick up the farms, so the farmers banded together and created MOOMilk, a farmer-owned company unique in the country.
Smiling Hill Farm of Westbrook agreed to process the milk and Oakhurst Dairy in Portland has been distributing it to more than 100 stores in Maine and New Hampshire.
Eldridge said he would give himself only a C+ or B- grade for the company’s first year and blamed that on being overly optimistic about how fast things could happen.
“We began talking to Whole Foods [stores] in May. It was August before I could get an appointment to talk to the individual stores, and it was December before we actually had milk in the stores — eight months later,” Eldridge said.
Getting the milk on the shelves in Hannaford supermarkets and Whole Foods was the key to launching the organic milk line, he said.
Eldridge said organic milk represents only 3 to 5 percent of the milk market and he credited Hannaford with “being truly outstanding in both giving us shelf space and backing our local movement.”
When MOOMilk was priced at 30 cents per gallon higher than its competition, Hannaford willingly cut its own profit margin so the Maine company could compete. “They really put their money where their mouth is when it comes to supporting local agriculture,” Eldridge said.
Hannaford’s stores sell an average of 120 to 160 half-gallons of MOOMilk a week. “In the organic sector that is really good,” Eldridge said.
Meanwhile, the Whole Foods store in Portland is matching those numbers on a weekly basis. As of Dec. 6, months of work paid off when MOOMilk was stocked in 14 Massachusetts Whole Foods stores. The impact of those additional sales has not been felt yet.
Eldridge said MOOMilk has been working with Shaw’s Supermarkets but that company is currently in reorganization and those marketing conversations are in flux.
Eldridge said the consumers have been “both our eyes and ears as well as our judge and jury.”
One of the biggest failures of 2010, harshly received by consumers, involves leaking cartons. Once that problem was stabilized, however, Eldridge said he is sure those lost consumers returned to MOOMilk products.
Of the 10 original farmers — MOOMilk now supports seven — three left for other business ventures or dropped dairy farming altogether.
“Right now, it is just about in balance between production and sales,” Eldridge said.
But that should change dramatically, he added, if Shaw’s or another large market comes onboard.
The company will concentrate heavily in 2011 on marketing, he said. “We are looking at a viral Internet campaign, using newspapers from Maine to Boston,” Eldridge said.
Between private investors and donors, the company has raised a half million dollars in the last several months, some of which will be used for advertising, but the lion’s share of which was used to support MOOMilk farmers.
“We still owe them some money from last spring,” Eldridge admitted, “but we are asking them to reinvest that into the company.”
An anonymous backer also stepped up and signed for a $250,000 credit line at Bangor Savings Bank to allow the company to further expand.
“We are currently working with Coastal Enterprises Inc., Northern Maine Development Commission, Sunrise County Economic Council and Finance Authority of Maine to put together a $300,000 term loan for 2011,” Eldridge said.
Fresh markets and an influx of cash will allow MOOMilk to take on more farmers in 2011, possibly as many as six. “There are farmers out there who definitely would like to join us,” Eldridge said.
He said that MOOMilk would also likely expand its product line, adding smaller package sizes and flavored milk. “We are getting inquiries from lots of schools for the pint-sized milks and we have a number of inquiries from private schools to supply them with organic Maine milk.”
In addition, MOOMilk is entering into a long-term relationship with Unity College, creating an internship and providing the school with milk.
“We are looking forward to 2011 and it should be a very good year for Maine’s organic milk industry,” Eldridge said.