Fairway partners with its customers to handle variety of dairy needs

LAKEVILLE, Minn. - Fairway Dairy & Ingredients aims to handle several aspects of the dairy business for its customers: The company buys and sells dairy products and animal feed ingredients, customizes dairy blends, operates a shredding and cut and wrap operation along with reclamation, and also handles logistical services. All of this is designed to save customers time, storage space and, of course, money.

SHREDS - Fairway installed shredding equipment to reduce lead time, manage inventory better and improve product quality.

The company's medium size gives it the flexibility to meet the needs of small to large customers with a short turnaround time and also allows Fairway the ability to evolve into new areas of business as the need arises, says John Beatty, who operates Fairway Dairy & Ingredients with business partners Tom Beatty and Tim Krieger.

"We're a nimble company. We can change directions quickly," John Beatty says. "We deal in most dairy products, including all types of cheeses, milk powder, whey, butter and dairy proteins, as well as all types of animal feed."

Fairway started out more focused on dairy trading. In fact, the business partners first owned trading company Twin Cities Trading when they teamed up to buy a former Saputo cheese manufacturing plant in Thorp, Wis., in 2001 so they could provide additional services to their customers. While the trio still is involved in dairy trading, they have now dropped the Twin Cities Trading handle as the needs of their customers have changed. The company also has sold its Fairway Foodservice arm of the business.

"We have played all of the roles. We started out as a buyer and sales agent. As we evolved, we became more of a distributor and manufacturer," Beatty says.

During this evolvement, the company has grown from just the original three to almost 20 full-time employees in sales and marketing as well as a full complement of plant staff. Fairway Dairy & Ingredients now operates a couple of divisions: Ramsen Dairy, which handles dairy powder blends, and Fairway Dairy, which specializes in the reclamation, reprocessing, packaging and storage of dairy goods. Ramsen Dairy is managed by Dennis Breuer, who brings with him 20 years of experience at Plainview Milk.

The Fairway Dairy plant is a 90,000- square-foot facility with more than adequate space for reclamation, reprocessing, packaging and storage of dairy goods. Beatty says Fairway matches its equipment purchases to where it sees the greatest needs to be.

"We don't buy the equipment hoping to keep it busy," he says. "The shred line came about because other people couldn't meet our needs." Operating its own shred line, the company can reduce lead time, manage inventory better and improve product quality, Beatty says.

Fairway focuses on partnering with other companies, both the companies it acquires products from as well as the companies to which it sells. Having strong relationships with suppliers enables the company to have consistent, quality supplies of cheese and other ingredients, while working closely with customers allows Fairway to understand inventory and product needs and better respond to them.

It is those partnerships that Beatty says make his job particularly enjoyable. Comparing the dairy industry to some of the industries his friends work in, he says: "This is still very much a handshake and relationship business." And like many, he notes that people don't leave the industry.

"Our industry's great at recycling people; we take care of our own," he adds.

This contributes to a work environment that Beatty says often doesn't feel like work because he enjoys taking on new projects with people. While the company continues to take on new projects, operating one dairy plant is enough for the company at this time; growth comes in other ways for Fairway.

"It's not our aspiration to buy a cheese plant," Beatty says. "We want to help our customers and not compete with them. If they grow, we grow. That's the whole premise."

Fairway's cheese focus lies in the areas of institutional and foodservice usages. Fairway has created its own label but isn't marketing it. The company also has no plans to do retail cheese at this time.

"It's a strategic decision; we don't want to compete with our partners," Beatty says.

In particular, Fairway handles commodity cheeses including Cheddar, Monterey Jack and Mozzarella, though it also can source specialty items. Beatty anticipates a great deal of growth over the next few years will involve the company's shredding capabilities. The company also has a cooker available.

Presently, Fairway also is doing a large amount of business with the butter industry, taking off-spec, off-code butter and converting it to anhydrous milkfat. Through some unique capabilities, the details of which Beatty won't describe, Fairway has the ability to take even the smallest consumer packages of butter and convert them. Beatty says the company works closely with USDA and the Wisconsin Department of Agriculture, Trade and Consumer Protection to ensure the proper handling of all its products and services.

The company, though based in the Midwest, has business all throughout the United States as well as around the world.

For the past several years, Fairway has been importing product from Australia and New Zealand, as well as Europe.

In addition, through a combination of the weak U.S. dollar, more industrialized nations increasing their consumption of cheese and other dairy products and Fairway's greater focus on international accounts as of late, Beatty says the company has seen its export potential grow in the past year.

In particular, the company is exporting more powders, though cheese and butter also have a role. Export markets for Fairway include nearby Canada and Mexico as well as Europe, Asia and South America. Overall, Fairway did about $55 million in dairy sales this past year. It also did a significant portion of business in fats and oils for the feed industry, Beatty says.

CMN