Emmi Acquires Redwood Hill Farm & Creamery to Expand in Goat Milk Product Market

04 Dec 2015 --- International growth has been one of the three pillars of Emmi's strategy since 2008. Emmi is keen above all to achieve this growth in attractive niches, one of which is goat's milk products, which are becoming more and more popular around the world.

Another is that of sustainably manufactured foods, such as organic foods. A third niche, and one in which Emmi is already making successful inroads not only in Switzerland but also abroad (in Spain and Chile), is that of lactose-free dairy products. By acquiring Redwood Hill Farm & Creamery in Sebastopol, California, an established manufacturer of premium products, Emmi has expanded in all three of these areas at a stroke.

Emmi now earns 44 % of its turnover abroad; one-third through exports from Switzerland and two-thirds with products from foreign subsidiaries. Continuing growth abroad is part of Emmi's strategy. The intention is that it should be achieved through both organic growth and further acquisitions. Emmi's primary interest is in companies in niche markets, primarily in countries in which it already operates.

At a time when economic conditions are difficult, the recent increase in income from North America, as well as the renewed strength of the US dollar, have played a vital part in stabilising Emmi's business. Emmi's success in among others, doing this is something it owes to its wide portfolio of subsidiaries and holdings in North America: Emmi Roth USA (in partnership since 2006, taken over in 2009), Cypress Grove Chevre (USA, taken over in 2010), The Icelandic Milk and Skyr Corporation (USA, a 25 % stake since 2013) and the cheese division of J.L. Freeman (Canada, taken over in 2015).

The Redwood Hill Farm was founded in 1968 by the Bice family in Sonoma County, California; Jennifer Bice, the oldest of the ten children, took full control of the company in 1978. She is seen as a pioneer in building up expertise in goats' milk products in the USA and is also well-known among goat breeders. Today, Redwood Hill, with over 70 employees, earns turnover of more than 22 million US dollars a year.

Its recipe for success is founded on three pillars: The first is goats' milk, for which there is ever-increasing demand in the USA, especially from urban consumers. Under the brand of Redwood Hill Farm, Redwood Hill is the acknowledged leader of the US market in goats' milk yoghurt and kefir. For example, the Redwood Hill Farms Plain Goat Milk Yogurt in one-litre cups is the country's biggest-selling large yoghurt distributed via the American Natural Food Channel and generates more sales than any comparable yoghurt made from cow's milk.

The second is that its success is founded on its striving to set itself apart. Lactose-free products are a relatively new niche that is as yet little served, and Redwood Hill is moving into it with a distinctive and diverse range of lactose-free organic products made from cows' milk. Thirdly, Redwood Hill relies on a sustainability concept whose credibility derives from its consistency. The concept starts with the company producing its own milk in ways that are natural and kind to animals: in 2005, Redwood Hill Farm was the first goats' milk farm in the US to be awarded the Certified Humane Raised and Handled label by the Humane Farm Animal Care (HFAC) organisation.

The managers in Sebastopol also care about protecting the environment. Central to their expression of this concern are the environmentally-friendly generation of power using solar panels (8,000 m2), the minimisation of waste, as well as the conservation and recycling of water, which is of considerable importance in California – a state that has suffered from severe drought for many years. Redwood Hill also makes an active contribution to many charitable organisations.

All Redwood Hill's products are trustworthy and of high quality and as such have won over consumers throughout the USA, but especially the greater San Francisco Bay Area. That's why it has been possible to continuously add to the range presented under the Redwood Hill Farm brand, which, at the time the company was founded, comprised only goats' milk products. It now includes yoghurt, kefir and cheese made from goats' milk. All these products are invariably made from milk in its natural state (i.e. not standardised or homogenised), and artificial ingredients, preservatives or milk powder are added to them.

Since 2010, the Green Valley Organics brand range of goats' milk products has been expanded by the addition of organic products made from cows' milk. The milk used for this purpose is bought locally in Sonoma County and has also been awarded the Certified Humane Raised and Handled label.

Redwood Hil’s present owner and CEO, Jennifer Bice, cares deeply about her company's continued existence: "I am confident that Emmi is the right choice for Redwood Hill’s future. I feel completely aligned with Emmi’s very high standards for quality, their strong emphasis on employees and their commitment to sustainability. Most importantly, they have encouraged us to maintain the way we do business here at Redwood Hill."

Jennifer Bice, together with her existing management team, will continue to manage Redwood Hill. The company will also retain an independent market presence.

The plan is to make use of specific synergies within the Emmi Group in order to build on the potential for growth than has been identified. For example, the company is working with Cypress Grove Chevre (which is also based in California) to find ways of spreading goats' milk production, which is highly seasonal.

“Emmi now has a tried and tested network of firms successfully operating in the premium and specialities market in North America. We have shown our ability to do a particularly good job of integrating pioneering family-owned enterprises into the Emmi Group over the long term. Maintaining the culture specific to a firm helps to further reinforce its success on the market”, said Urs Riedener, the Emmi Group's CEO.

Emmi will take over Redwood Hill entirely by the end of the Year, while the goat farm remains owned by Jennifer Bice. The parties have agreed not to disclose the purchase price.