Dairies Gearing Up To Meet Demand As Organic Milk Gains Popularity Heightened Interest In Food Untainted By Chemicals Fuels Rising Sales

Twice a week, huge tankers sloshing with up to 30,000 gallons of milk from a chemical-free herd of dairy cows barrel down Interstate 25 to Denver.

Each tanker contains organic milk gathered from 2,000 cows in Idaho by Horizon Organic Dairy Inc. of Boulder.

Demand for Horizon’s organic milk has more than doubled since July 1995, as has the size of the company’s Idaho herd, said Barney Feinblum, Horizon president. Feinblum, former chief executive officer of Celestial Seasonings, is determined that Horizon will ride the white wave as it crests.

“Our business is going to more than double this year, as it did last year,” Feinblum said. “The organic dairy category itself is going to be $60 million in 1996.”

Organic milk comes from chemical-free cows, which means they have eaten pesticide-free crops for at least 12 months. The crops are raised on land that has not been treated with pesticides, herbicides, or fungicides for at least three years. Antibiotics and growth hormones are off-limits, too.

The organic milk is aimed at consumers who like the idea of ingesting fewer chemicals. Many also prefer the taste of organic milk, which they say tastes sweeter than non-organic milk.

Who buys it? Horizon’s typical consumer is “female, in the upper ranges of education and income, adventurous, often the mother of children,” Feinblum said. And they’re willing to pay around 55 cents more per half-gallon for the certified organic label.

“For most of them, fluid milk is the entry point once they become concerned about getting organic dairy products,” he added.

Horizon just introduced a line of four cheeses made from its organic milk. At dairy plants in California, Nevada, Minnesota and New Jersey, the company also makes organic butter, yogurt, cream cheese and sour cream.

But it is the company’s organic milk that is behind the marketplace surge.

Demand for organic milk at Alfalfa’s Capitol Hill store, for example, has grown from five or six cases a week in 1995 to 30 to 60 cases now, said a store stocker. More customers are buying organic milk at the Wild Oats store in downtown Denver, and chain grocers such as Safeway, King Soopers and Albertson’s also say demand is growing.

“We’ve carried organic milk for well over a year, and now it’s in most of our (Colorado) Front Range stores,” said Safeway spokesman Jeff Stroh. “It’s a niche product but demand for it is growing steadily.”

It’s not easy to get organic milk to consumers. Horizon’s requirements for chemical-free crops to feed its cows support 50,000 farmers in three states.

Factory farming is out. Instead, the cows graze on pesticide-free pastures and bed down in stalls. The cows are milked three times a day, Feinblum said.

Even pasteurizing and packaging organic milk is problematic. The milk must be processed without coming into contact with non-organic milk, but Horizon lacks a processing plant.

Enter Dick Robinson, chief executive officer of Robinson Dairy of Denver, now a major shareholder of Horizon’s private stock. Robinson and Feinblum struck a deal to process Horizon’s organic milk at Robinson’s commercial dairy in the wee hours of the night - before Robinson’s non-organic milk splashes into the stainless steel vats.

That means Horizon’s milk tankers must leave Idaho around noon for the 12-hour drive to Denver. They pull into Robinson Dairy’s loading dock by midnight so the organic milk can be processed and packaged by morning, when Robinson processes its own milk.

“Horizon is the only raw milk we’ve ever packaged other than our own,” said John Robinson, sales vice president. “It’s an unusual circumstance in our industry, but it gives us the ability to make organic milk available to retailers and food service customers.”

By 8 a.m., the organic milk is ready for distribution to grocery and health food stores in the West, as well as far-flung Horizon plants that make it into butter or other organic products.

Horizon’s Idaho dairy farm can’t keep up with galloping demand, so the company is renovating a commercial dairy in Maryland into an organic facility.

Feinblum won’t disclose revenues, but a trade magazine last year estimated 1995 sales at $8 million. Board members include Aspen investor Paul McCloskey; Marc Peperzak, owner of Aurora Dairy Corp., one of the largest dairies in the United States; and Horizon founder Mark Retzloff, founder of Alfalfa’s.

“We’ve got quite a bit of expertise on our board, and I believe we’re going to continue growing at a rapid rate as a result,” Feinblum said.