Gay Lea expands into goat milk processing

Friday, October 17, 2014

by SUSAN MANN

The sale of Hewitt’s Dairy to Gay Lea Foods Co-operative Ltd. this week is exciting news and will open the door to new opportunities for the goat milk sector, says Norwich-area farmer Anton Slingerland.

He’s the president of Ontario Goat’s board and a licensed goat milk farmer who has shipped to Hewitt’s for the past nine years. He produces about 250,000 litres of milk annually. “We felt there was always more that could be done when it came to the product that they (Hewitt’s) were selling,” notes Slingerland, adding “this is a very positive step with a larger corporation taking it over.”

Slingerland says once the deal is effective Nov. 1 the farmers that shipped to Hewitt’s will be shipping to Gay Lea. He estimates about 130 licensed goat milk farmers have been shipping to Hewitt’s.

The 127-year-old Hewitt’s business, located in Hagersville, processes milk, cream, cultured yogurt, ice cream, and a complete line of goat milk products, including organic goat milk in glass bottles and fresh organic chévre, which is goat milk cheese. It has 65 employees. The family-owned business also has a Dairy Bar located on Highway 6, just north of Hagersville, featuring more than 100 flavours of regular, low fat and sugar free ice cream, frozen yogurt, sherbet and goat milk ice cream.

Michael Barrett, Gay Lea’s chief operational officer, confirms Gay Lea will continue to operate Hewitt’s business, including the Dairy Bar on Highway 6 and the goat milk processing section. Buying the Hewitt’s business “expands our basket of goods that we’ll offer to our customers.”

The Hewitt’s processing plant in Hagersville will remain there and “we’re going to make investments in the plant,” Barrett says. Gay Lea will also retain Hewitt’s 65 employees.

Gay Lea was founded in 1958, according to the Oct. 15 press release announcing the Hewitt’s sale. It’s Ontario largest dairy co-operative with 1,200 members and 835 employees. Its sales in 2013 were $560 million. The co-op has its head office in Mississauga along with seven production facilities across Ontario. Its brands include Gay Lea, Nordica, Ivanhoe and Salerno.

As for the goat milk business, Gay Lea will absolutely continue that division, he adds, noting that was one of the attractions of the Hewitt’s business for Gay Lea. Goat milk is “a growing segment in the marketplace today. It allows us to be able to expand beyond bovine to goat as well.”

Unlike cow milk production, goat milk production does not fall under Canada’s dairy supply management system, which employs quotas to control milk production at the farm level and for some products, such as cheese and butter, allocates how much milk each processor can use.

Barrett says another one of the exciting things about the Gay Lea purchase of Hewitt’s is the Dairy Bar. “We’ve got 100 flavours of ice cream and I want to make sure I taste every single one of them.”

Currently Gay Lea, a cow fluid milk, cheese and cultured product processor, doesn’t have goat milk products but to be able to expand to goat milk and goat cheese “is a plus for us,” Barrett says, noting he’s been told current goat milk production across Ontario isn’t meeting the demand so “certainly we’d be looking forward to securing additional supplies across the province and that would mean growing the production of goat milk on the farms in Ontario.”

Once Gay Lea takes over Nov. 1 the current goat milk farmers supplying Hewitt’s will not have to join the Gay Lea co-op to continue supplying their milk. Barrett says Hewitt’s has producer supply arrangements with each farmer and Gay Lea will also have those arrangements with its goat milk farmer-suppliers. Gay Lea has scheduled meetings Nov. 5 and 6 to meet with goat milk farmers, he says.

Marie Hewitt, owner and president of Hewitt’s, says she sold the business because “it was time.” Both Hewitt and Barrett declined to reveal the purchase price. “This is a private company and we don’t disclose those facts,” Hewitt says.

Ontario Goat executive director Jennifer Haley says there are 230 licensed goat milk shippers in Ontario and they’re projected to produce 40 million litres of milk this year. The milk in Ontario goes to the two brokers of goat milk – Hewitt’s or the Ontario Dairy Goat Co-operative Inc. In addition to being a goat milk broker, Hewitt’s also processes goat milk into fluid, cheese and ice cream.

The bulk of Ontario’s goat milk goes into cheese production for both the domestic and export markets. Goat milk production has grown “exponentially” year-over-year for the past two years, she adds. “It’s projected to continue to grow even more in the future.”

Slingerland says increased demand from cheese sales has lead to the production growth. There has also been increased health awareness among consumers who are becoming more aware “goat’s milk is much easier to digest for your body than cow’s milk.” And that awareness is starting to drive the market too.

Haley says they don’t expect any disruptions in service now there’s a new owner for Hewitt’s. “Our understanding is its business as usual with the buying and processing of goat milk.”

The Hewitt’s sale is “good news for goat producers in Ontario because it does provide the assurances that the business will continue on,” she adds. BF