WISCONSIN DELLS, Wis. – With tightening profit margins and decreasing markets continuing to face many Wisconsin dairy farmers, more are working to find ways to increase their profitability through adding value to the milk produced on their farms. Navigating the waters of creating and marketing value added products can be tricky and was a topic of discussion at the Compeer Financial Resilient Farms Conference Dec. 12, 2019, in Wisconsin Dells.
    Ron Henningfeld, of Hill Valley Dairy in East Troy, spoke about his experiences joining his family’s dairy farm as a cheesemaker. The family’s 68 cow dairy is operated by Henningfeld’s brother, Frank, and his wife, Colleen; Henningfeld and his wife, Josie, have joined the farm by creating a cheesemaking business which uses 20% of the milk produced on the farm.
    “I always loved the farm. I was drawn back to the farm, and small business and entrepreneurship,” Henningfeld said. “I had this idea in my head that maybe I could do something that adds to the farm like cheesemaking.”
    Nine years ago, Henningfeld decided to embark on his idea and began learning to make cheese, working for other Wisconsin cheesemakers for several years. In 2016, he began making his own cheese and started marketing at farmers markets. Originally Henningfeld sourced milk from the creamery he worked with instead of utilizing milk from the family farm.
    “By 2017, I was comfortable with the cheese business, and my brother Frank and I started to look at how we could connect the cheese business and our farm,” Henningfeld said.
    One load of milk from the farm each week is used to make about 500 pounds of Hill Valley Dairy cheeses. About half the cheese is marketed through farmers markets and the other half is sold to retailers and restaurants.
    “The last three years have been spent laying down a foundation for the cheese business,” Henningfeld said. “I think the next three years we will be able to see a lot of growth, and for our hard work and time to turn into more revenue for our two families and the family farm.”
    Henningfeld stressed the time commitment a value-added product carries.
    “As a dairy farmer, my brother wouldn’t be able to do a value-added product on his own so my coming back and joining them made this possible,” Henningfeld said. “I think that is important to know. To add a value-added product or value-added business to your farm is adding a whole additional workload.”
    Henningfeld plans to double the amount of cheese made from the farm’s milk during 2020, utilizing two loads of milk to bring production to 1,000 pounds of cheese each week. That will account for about 40% of the milk produced on the family’s farm.
     Lois Federman, the director of the Something Special from Wisconsin branded marketing campaign with the Wisconsin Department of Agriculture, Trade and Consumer Protection, shared insight into the planning needed to develop and market value-added products.
    “Marketing is something that doesn’t come naturally to most of us,” Federman said. “We tend to not be willing to put ourselves out there to have other people reject us. Marketing is the act or process of buying and selling in a market.”
     Federman is involved in direct marketing on her family’s farm because of the need for diversification.
    “The commodity markets are no longer meeting our bottom line so we needed to diversify how we are doing our marketing,” Federman said. “Farmers need to be price-makers and stop being price-takers. There aren’t many industries where someone else tells you what you are going to receive for your hard work. You can’t go to the store and say you are going to pay $5 for something that they are asking $10 for.”
    Before getting involved in direct marketing, Federman encourages farm families to consider not only their strengths but more importantly to know where their weaknesses lie.
    “Who has what strengths within the family?” Federman said. “What can they bring to the table for the direct marketing business? Take inventory of what your strengths are first before you try to start doing something, and then realize you are missing many pieces to the puzzle. More importantly, you need to understand, identify and accept your weaknesses. Then you can surround yourself with those who can help you. Don’t be afraid to ask for help.”
    Federman said when entering the world of direct marketing and creating value-added products, mistakes are not something to be feared but should be looked at as a way to learn and grow. Flexibility and a willingness to change and evolve with the business climate along with innovation are crucial to being successful in direct marketing.
    Federman encourages creating a legal entity before embarking on direct marketing.
    “A lot of people think it’s not necessary; they think they are just going to try this. I personally think that is a mistake,” Federman said. “Families need to set the direction of the business, deciding who is in charge and will ultimately make the final decisions, and who will be involved in what areas of the business.”
    Jenni Gavin, of Gavin Farms, shared her experiences about the importance of creating and utilizing a brand to make value-added products resonate with consumers. Gavin Farms is a small beef farm near Reedsburg that has been direct marketing beef for three years.
    “Your brand is your business’ reputation,” Gavin said. “It is your identity, what sets you apart from others in the industry. The brand is the idea, and branding is the visuals that help complete that idea. It includes fonts, colors, patterns, imagery, logos; how you make your customers feel. It helps tell your audience who you are, what you do and why your product will benefit them.”
     When Gavin first reached out to a designer to help develop a logo for egg cartons, she did not realize the depth of the project she was entering.
    “When I reached out to our designer, I had no idea what I was getting into,” Gavin said. “I had no idea that I wasn’t just getting a logo, but that I was investing in a branding package. I had no idea how that would impact our business and how we operate today.”
    The Gavins completed a branding questionnaire. The result was a branding package that had logos, color schemes, direction on taking and sharing photos for social media and marketing, and a guide on how not to use the logo.
    “There are different things you can do that actually harm the integrity of your branding,” Gavin said. “She wanted to make sure we were doing things properly. She also helped us write a mission and vision statement. All of that really impacted the way we do things today.”
    Delivering a consistent message and using consistent imagery has become an important part of the Gavins’ marketing strategy and is something they work to continue to perfect in order to connect with their customers.
    “Branding is a big investment,” Gavin said. “It’s something that everyone really wants, but they might not understand the value or importance of having it look professional. Branding has become a tool that has been really important to our farm.”