3/26/2012 9:22:00 AM Fargo's Cass-Clay Creamery sold to Kemps AMPI will continue to exclusively supply milk
On March 12, Kemps LLC took over ownership of the Cass-Clay Creamery in Fargo, N.D., from Associated Milk Producers Inc. (AMPI). Both Kemps and AMPI are touting the deal as a win-win situation. (Photo submitted)
Cass-Clay Creamery in Fargo, N.D., has been sold to Kemps LLC. Associated Milk Producers Inc. (AMPI) that sold Cass-Clay Creamery will continue to provide the milk. (Photo submitted)
By Ron Johnson
ST. PAUL/NEW ULM, Minn. - The dairy industry in Minnesota and North Dakota changed a bit March 12. That's when Kemps LLC took over ownership of the Cass-Clay Creamery in Fargo, N.D., from Associated Milk Producers, Inc. (AMPI). The deal also gives Kemps the Cass-Clay brand. The sale "was really all about the Cass-Clay brand," said Rachel Kyllo, vice president of marketing for Kemps. "It just has so much brand equity in North Dakota. It's by far the strongest brand and the dominant brand in milk and other dairy categories." Kemps, based in St. Paul, Minn., and AMPI, headquartered in New Ulm, Minn., are both touting the deal as a win-win situation. That's because the arrangement lets Kemps use its strength - brand management - while AMPI will get to play to its strength - efficiently producing milk on family farms. "This sale allows each company to do what it does best," said Ed Welch, chief executive officer of AMPI. "It allows the dairy farmer-owners of AMPI to focus on maintaining a steady flow of the quality, wholesome milk that is the essential ingredient in making the Cass-Clay dairy products consumers crave." Jim Green, CEO and president of Kemps, said, "We are excited about building on the heritage of the Cass-Clay brand. We look forward to providing fresh Cass-Clay milk from local farms for years to come." Terms of the sale were not disclosed, but Kyllo told Dairy Star that AMPI farmers will remain the exclusive supplier of milk to the Cass-Clay facility. Kyllo said she could not comment on the amount of milk being processed at the Fargo facility, but she did say it comes from approximately 100 farms, all of them "in close proximity to the Fargo-Moorhead area." Cass-Clay Creamery has no other processing facilities, according to the Kemps spokeswoman. The creamery bottles milk at Fargo and makes cottage cheese, sour cream and ice cream. Its products are marketed in northwest Minnesota and back through the western border of North Dakota. As of now, Kemps does not have any plans to change or add to the Cass-Clay line of products. "At this point, the brand is really strong and the produce quality is great," said Kyllo. "So there aren't any changes, at least in the short- term plan. Over time, if there are opportunities for other new products, we'd like to bring innovation to the business. But for now, the product line is great and we're going to run it as is." AMPI purchased the Cass-Clay Creamery five years ago. Sheryl Meshke, a senior vice president with AMPI, commented on the reason for the sale to Kemps. She said, "I think it really boiled down to stepping back and saying, 'What do each of us (AMPI and Kemps) really do best?' Cass-Clay is a very respected brand, and Kemps is good at brand management. So that is going to be the expertise they bring to the table." Kemps, a subsidiary of Dairy Farmers of America (DFA) makes a "full product line" that includes milk, ice cream, cottage cheese, sour cream and novelties, according to Kyllo. "We're the dominant brand in Minnesota and Wisconsin, so Cass-Clay, being the dominant brand in North Dakota, helps us expand our footprint. Our strength is in building and leveraging strong brands. The Cass-Clay acquisition allows us to do that in a new geography." AMPI, by contrast, does not place its name on products, but is more of a "private-label company," said Meshke. The co-op concentrates on producing and processing milk. It's estimated that AMPI makes food and consumer package products for approximately 170 retail, foodservice and ingredient brands. "That," said the AMPI vice president, "has been our model and it's where we're going to maintain our focus." AMPI has facilities in 12 locations in four states. It makes cheese at Hoven, S.D., and nonfat dry milk at Freeman, S.D. In Minnesota, AMPI makes cheese and consumer products at Dawson, makes consumer products at New Ulm and Duluth and makes cheese at Paynesville and Rochester. The co-op makes consumer products at Portage, Wis., and makes cheese in Blair and Jim Falls, Wis. Its Iowa facilities are a nonfat dry milk plant at Arlington and a cheese factory at Sanborn. The co-op is owned by some 3,000 dairy farmers. AMPI markets six billion pounds of milk and has sales of $2 billion. Member farms are in Minnesota, Wisconsin, Iowa, North Dakota, South Dakota and Nebraska. Kemps, founded in 1914, operates processing facilities in Minneapolis, Rochester, Farmington, and Duluth. Minn. Its Wisconsin facility is at Cedarburg. Cass-Clay Creamery originated in 1935, in Moorhead, Minn. It moved to Fargo in 1957 and employs 300 people. AMPI and Kemps already worked together before finalizing the Cass-Clay arrangement, noted Meshke. They share facilities at Rochester and Duluth. In all, Kemps employs 1,200.