Thinking of Starting a Value-Added Dairy Foods Business?

Thinking of Starting a Value-Added Dairy Foods Business?

What is a Value-Added Dairy? "Value-added" is an extra characteristic that creates greater value for the consumer and generates a higher dollar return for the dairy foods processor.

There are many reasons for starting a value-added business: to maintain a small family farm; for financial sustainability of your dairy; if you have a passion for dairy products; or to provide a business opportunity for future generations.

There are a wide range of value-added dairy products such as:

• Fluid products like flavored milks and milk with different fat levels.
• Frozen desserts like ice cream or gelato
• Cultured products like spoonable, drinkable, Greek, or other specialty yogurts, as well as dips and spreads.
• A variety of Cheeses like Cheddar, Mozzarella, Blue cheese or goat cheese; and
• Butter

Dairy consumption is increasing but product trends are moving away from fluid milk to processed dairy products. Consumers are interested in locally produced products as well as niche or specialty products, so you may be able to capitalize on an opportunity to market your milk such as: grass-fed cattle, organic, goat or sheep products, A2 milk, breed-specific such as Guernsey or Jersey. You may need time to make a transition if your current production doesn't meet the niche demands.

Before you start, knowing the characteristics, science, and manufacturing technology of your product is critical to making a consistent, high quality product. This will help you determine your:

• Equipment needs
• Facility needs
• Manufacturing processes
• Regulatory requirements

The dairy industry is highly regulated, you need to know the federal and state regulations that apply to your enterprise. For example:

• Facility Permits
• Facility, equipment and processing requirements
• The Food Safety Modernization Act or FSMA
• Products standards and standards of Identity

It is also important to identify potential barriers to your enterprise's success, for example capital needs, human resources and lack of support.

Remember, a dairy foods processing business is not simple; A successful and sustainable business is the result of a solid understanding of your markets and the technology needed to make your products, and a commitment to the highest quality farming, manufacturing, and business practices.

This program was developed by Food Safety CTS, LLC, for Penn State University.