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Clover Stornetta Farms

by Desmond Jolly, agricultural economist, Department of Agricultural and Resource Economics, UC Davis

Clover Stornetta Farms in Sonoma County, California, has taken a different approach to dairy production and marketing. Company President Dante Benedetti (pictured) outlined the processing company's approach in a presentation at the May 12, 1998, symposium, "Animal Husbandry and Public Health: Ethics and Actions."

Clover Stornetta is a privately owned company with eight owners. It produces about 55,000 gallons of milk per day and, according to Benedetti, is the fastest growing dairy in California. Company revenues are estimated at $60 million per year, with dairy products marketed from Humboldt to Monterey County, predominantly along the California coast.

In 1995, Clover Stornetta decided to separate itself from the mainstream dairy industry and carve out a unique niche in the regional dairy market. Their perception was that the conventional approach was too unresponsive to evolving consumer values and preferences.

Demographically, the greater Bay Area market, which is primarily Clover Stornetta's market, comprises a highly diverse population with large segments of well educated, affluent, socially conscious people with high levels of environmental and health consciousness. The commercialization of BST in 1995 crystallized the company's new approach. Letters received by the company from consumers and retailers on the cutting edge of consumer trends indicated serious concerns about BST. Even though the Food and Drug Administration (FDA) process precluded labeling with respect to BST, the company decided to go against the BST route and carve out a different, consumer responsive posture.

Product Differentiation

Clover Stornetta's strategic marketing plan indicated a need for a new kind of product positioning, one that could generate price differentials based on added values that the product could generate for consumers. The company decided to develop a North Coast Certified Dairy program based on four key criteria. The first criterion is scientifically based in safety: it utilizes lab pasteurization, somatic cell counts, and bacterial measures, particularly with regards to e.coli. The second criterion focuses on ranch beautification - the esthetic appearance of the ranch. The third criterion involves a signed affidavit by dairy producers who promise not to use BST in their production. The fourth is an understanding that each dairy that enters into a marketing arrangement with Clover Stornetta will develop a farm plan geared towards sustainable agricultural practices.

Noting that each farm is unique and starts from a different set of circumstances, Benedetti said there is no one size that fits all in terms of a package of practices. Nonetheless, the expectation is that individual dairy producers will, with each iteration of their farm plans, take a portion of their dairy operations and "push the envelope" as far as agricultural sustainability is concerned. Some of the issues that have emerged as high priority with respect to sustainability include dairy waste management and nutrient budgeting. One of the side benefits of these criteria is that the producers stay ahead of the regulators by adopting practices that prevent environmental hazards.

The Clover Stornetta North Coast Excellence program involves 43 of the best managed dairies on the North Coast, according to Benedetti. The program is developed by a team of dairy producers and Clover Stornetta representatives who build its criteria and parameters. Annual dinners allow participants to celebrate accomplishments and build enthusiasm for meeting future goals.

Goals and Prospects

According to Benedetti, Clover Stornetta is well positioned to grow in the marketplace, and its producers will gain advantages by being able to increase their own levels of production. Clover Stornetta is well integrated into the community through President Benedetti, who serves on the board of 10 nonprofit organizations.

Additionally, valuable market intelligence comes from a progressive group of retailers along the coast, particularly natural foods markets - the fastest growing segment of the food retail industry. Eighty percent of the naturl food markets in the area are supplied by Clover Stornetta.

The company's goal is to have the highest quality milk in the United States. It rewards its producers with higher prices as an incentive to meet the dairy's criteria. On the near horizon is a plan to break into the emerging market for organic milk. Clover Stornetta already bottles milk for Horizon Organic and Straus Family Creamery (see article in this issue) and will soon bottle organically labeled milk for St. Anthony's Farm, which is run by a non-profit organization oriented to rehabilitation of urban residents in poor situations.

In terms of product development, Clover Stornetta's position is "Let consumers decide." While clearly not a recipe for every dairy operation, the Clover Stornetta approach shows the vision, market analysis, and responsiveness that may enhance the sustainability of many dairy operations on the northern California coast while building and sustaining closer links with urban-based consumers.