BRATTLEBORO — Ehrmann AG is a German yogurt maker with more than $1 billion in sales in 40 European countries. It sought more production capacity in North America and looked at sites around the Northeast for a yogurt plant.
Economic development agencies in Massachusetts and New York state made overtures to Ehrmann, but it was the state that some say has an “anti-business” reputation - Vermont - that ultimately landed Commonwealth Dairy, Ehrmann's North American partner.
Yogurt production at Commonwealth Dairy's 39,000-square-foot plant begins within the next couple of weeks. The $32 million facility, located on 5.9 acres on Omega Optical's Delta Campus near the Guilford town line, is expected to purchase more than 100 million pounds of milk - up to 60 percent of it from Vermont farms - per year.
The arrival of Commonwealth Dairy is one of the biggest commercial developments in Brattleboro in years, and it took cooperation on the local, state, and federal levels to pull it off.
The company also received a great deal of government assistance, which included:
• A $1.3 million loan from the Vermont Economic Development Authority (VEDA), part of a $26.3 million financing package that used the U.S. Treasury Department's New Market Tax Credits to provide a portion of the equity funding.
• $1.2 million from the Vermont Economic Progress Council's Vermont Employment Growth Incentives (VEGI) program.
• $639,920 from the Vermont Community Development Program for a Community Development Block Grant to the town of Brattleboro, which the town then loaned to Commonwealth.
• A $300,000 federal grant secured by U.S. Sen. Patrick Leahy, D-Vt., which was used by the Brattleboro Development Credit Corp. (BDCC) to complete work on a $1.15 million town water line to Omega's Delta Campus.
In addition, a significant chunk of funding, $18 million, came from the Massachusetts Housing Investment Corp., a nonprofit lender that made the loan in partnership with CEI Capital Management, LLC, based in Wiscasset, Maine. Wainwright Bank (now Eastern Bank) also provided $10 million in loans.
Employing cows
It seems like a lot of money and effort just to create 33 jobs, but as Commonwealth Dairy president Thomas Moffitt pointed out, “We're not a large employer of people, but we employ a lot of cows.”
It's not an exaggeration.
About 4 percent of Vermont's total fluid milk production will be earmarked for Commonwealth Dairy, so it will take up to 5,000 cows to make the milk the plant needs.
“The state of Vermont has been incredible,” said Moffitt, “and the people here made it very easy for us. We were a really small fish in a really big pond in New York and Massachusetts, but we got a great reception here.”
Vermont, he said, “understood the value of the plant and the trickle-down effect that when you spend money on milk, that's money going back to the dairy farmers, and they in turn are supporting their local economies.”
He credited former Agriculture Secretary Roger Allbee for spearheading the state effort. During last Wednesday's grand opening ceremonies, Allbee was honored by plant officials for his role.
“I think it is what Vermont's future is all about - connecting the agriculture and economic development together,” Allbee said at the event. “The future is value-added, in plants like this, and working with farmers on artisanal cheese and other products that really advance Vermont's reputation and name. We have a commitment to support Vermont agriculture at all levels. It's part of our culture, it's part of our history, and it's part of our future.”
Economic development staffers in the Douglas administration also played a role, but current Gov. Peter Shumlin was more than happy to bask in the glow of a success story for Vermont.
“More and more Americans care about where their food is grown, where it comes from, and the quality, and you can't do any better than Vermont,” Shumlin said at the grand opening.
Shumlin also said that the plant was “an example about why our kids are going to have a bright economic future, why we're going to have jobs in Vermont, why we're going to be a prosperous state. Our agricultural future is bright because of projects like this.”
The right place
It wasn't just the government incentives or the “Vermont Brand” that brought Commonwealth Dairy to Brattleboro. The Delta Campus site is close to Interstate 91, and to the distribution centers for C&S Wholesale Grocers and United Natural Foods.
The company will make yogurt for other companies under private-label and co-pack arrangements, as well as produce and sell its own all-natural, rBST-free Green Mountain Creamery yogurt, which should be available in stores by May.
Moffitt said that 5 percent of the net operating profits from the sale of Green Mountain Creamery yogurt will be distributed to dairy farmers. The company plans to create a scholarship fund for students who want to learn dairy processing and dairy science at the University of Vermont.
Much of the yogurt that will be produced in Brattleboro will be Greek-style, which requires more milk that other types. Moffitt said that while it takes 0.6 pounds of milk to make a pound of regular yogurt, a pound of Greek-style yogurt takes 3.1 pounds of milk.
“We were projecting buying 50 million pounds of milk, but the demand for Greek-style yogurt means we ended up needing twice as much milk,” said Moffitt. “We ended up doubling our milk demand even before our first year of operation.”
The plant should be at full capacity by March 2012, plant officials say. At that time, 190 million cups of yogurt a year will be made in Brattleboro.
The plant has six 8,000-gallon fermentation tanks, with room for four more. Berthold Gruber, the plant's manager, said that a state-of-the-art pressurized air filtration system will cut down on possible contaminates so that preservatives will not be needed.
“This plant was built to very high standards,” said Gruber.