Vermont Creamery Icons: Bob Reese and Allison Hooper

Vermont Creamery founders discuss their journey and the next chapter.

It has been about three years since Vermont Creamery co-founders Allison Hooper and Bob Reese sold their business to Land O’Lakes. Now both are giving back, providing other businesses with the benefits of their experiences, while also enjoying the more relaxed pace of semi-retirement.

“After losing your identity as an entrepreneur, you go through a period of reinventing yourself. It actually requires a great deal of intention as to how to spend your time in retirement,” says Hooper. “We were fortunate to have the option to retire at a young age before being told we couldn’t do anything anymore. There’s so much to do beyond your business. Once you come to self-actualization and appreciate the insight that you have in business, you can share that wisdom with others.”

Reese agrees. “We were always mentoring other companies or colleagues in the cheese business, and it’s rewarding to give back to Vermont businesses and entrepreneurs,” he says. “We know what they’re going through and how important it is to be sounding boards, something we both continue to do.”

Cheese Connoisseur

Here, Hooper and Reese discuss the beginnings and evolution of Vermont Creamery, how they handed off their company and their views on the cheese industry today.

CC: How did you come into the cheese business?

B.R.: We were both working together at the Vermont Agency of Agriculture in 1984. Allison was a French major who learned how to make cheese and was working on a Vermont dairy goat farm. I was the agency’s marketing director. We had a state dinner coming up and needed someone to make goat cheese. Allison donated her cheese, and this is when we began talking about going into the cheese business.

A.H.: While in college, I spent a year abroad in Paris. Because I didn’t have working papers, I wrote to farms around the country looking for a job. I finally heard from a family in Brittany. They had a dozen cows and 40 goats, and made various products, including crème fraîche, butter, fresh and aged goat cheeses and charcuterie. I spent a portion of the summer there learning to make cheese, haying, milking and fencing. I really enjoyed it and loved the products. Surrounded by wonderful French cheese, I couldn’t help but wonder why we didn’t have them in the U.S.

I hadn’t formulated in my mind that I’d pursue it as a business till Bob and I met at that dinner. I grew up in New Jersey and moved to Vermont with the intention of doing cheesemaking. At the time, it was very much a dairy state, more so than today. I knew I had to go where the milk and dairy farms were and ended up at the agency of Agriculture. For the state dinner, the products should all come from Vermont. And, localvorism and farm to table was not a thing. We didn’t have goat cheese here, so it was kind of a ridiculous and serendipitous confluence of events.

We started making cheese at the University of Vermont’s Dairy Center. They let us fool around and make batches of cheese, hoping we wouldn’t blow the place up. At the time, Don Hooper and Alice Pell had a dairy and were bottling fresh milk for Bread and Circus in Boston and few health food stores in Vermont. They were delighted for Bob and me to liberate them from bottling and use their milk for cheese. They had careers off the farm and offered their 10-foot-by-10-foot milk house to piece it together to figure out if we had anything.

CC: Talk about the evolution of VT Creamery

B.R.: After the state dinner, Allison and I spent a few months talking about a potential business. I had just finished an MBA program and was looking at the next new and great thing. I loved working with the farms that the ag agency exposed me to.

The farm in Brookfield was going through a transition where they were bottling milk and were overjoyed someone would come on to take some of that milk for cheese. We started doing test batches of cheeses. The dinner was in July and by October we had filed papers to create our company, Vermont Butter and Cheese Co. We spent the winter installing a boiler in the milk house and hooking up a 50-gallon cheese vat.

Cheese Connoisseur

By the spring, we were bottling and selling milk and making a little bit of cheese that we were selling at a local farmers’ market. Allison and I had a couple partners in the beginning, who we bought out, and we were off to the races. We had the cheese, labels, packaging and materials and were selling direct to consumers. At that point, we were looking for additional milk suppliers around Vermont, as we realized at the farmer’s market we didn’t have enough goats’ milk. We started to buy milk from backyard 4-H herds around Vermont. We had a milk route that took us nearly 200 miles twice a week to pick up 50-80 gallons of goats’ milk. We sold fresh milk and fresh chèvre to natural food stores and food coops in Vermont, then started selling through natural food stores in Boston that were already the Hoopers’ goat milk customers

Back in the early 80s, home mortgage rates were in the double digits. My job at the ag agency was to help entrepreneurs using local products. We were already involved with economic development people. It wasn’t as if we were risking a big amount of money starting our business, but we had a lot of good will given that we both were employees at the agency. We were lucky to find loan officers and committees to say, “why not?”. Also, not having a lot of money in the business was a good thing. We didn’t have a big cheese plant or a lot of capacity.

As time went on, we became more confident. Eventually, when we went to Boston, we had a list of chefs that were buying our product on a regular basis. They were very much our fans and would support us. Executive chefs would use our cheese and crème fraiche in their recipes when they were in culinary school, graduate and then incorporate them in their dishes at a restaurant.

A.H.: When we first went into business, we were woefully unprepared. It was remarkable what we did. Bob was working at the ag department at the time and told his wife Sandy that he quit his job. He had health benefits, a baby and they were pregnant with their second baby. All I had a was a beat up used Volvo that barely started, but no mortgage or anything. We were so young and naïve and believed in it.

Cheese Connoisseur

When we started, Bob and I each put $1,200 into the business. We then went to the United Church of Christ and received a $4,000 loan from their revolving ag fund. With that, we went to a commercial lender, a small community-owned bank, and we borrowed $10,000 to install a small boiler in the milk house for pasteurizing. We didn’t have working capital, but the farm extended us a very long line of credit to purchase the milk. We had angels financing our payables.

When we started making crème fraiche, we bought milk from Booth Brothers, a local dairy. The owners were absolutely flummoxed as to what we were doing with cans of cream. I would be in Brookfield making cheese seven days a week; Bob had an office in his house outside Burlington. He would call customers, bring them pieces of fresh goat cheese and return the cheese that didn’t sell the week before.

We also didn’t have a marketing plan or any idea on how to unload cheese or tell people about it. It was amazing that the bank even gave us the loan in the first place! To get a small loan for an idea with no money, although the bank considered the $4,000 church loan equity for the loan, is impossible today.

But this all happened in 1984, when banks made loans based on character and to people who needed money.

CC: What were the other challenges you faced along the way?

B.R.: There were a lot of challenges. We never had enough goat’s milk, the raw material, to meet the demand. Customers wanted us to deliver what they ordered, but we were forced to always cut orders. Because we were open and up front about it as was our company mission, we were forgiven. But if that happened today, we would be at great risk of failure.

We were lucky we had chefs who could work with our product and improve it, as we made some mistakes from a quality standpoint. And we didn’t have the right packaging to ensure our product’s shelf life. At the time, it would only last 30 to 60 days, whereas the same product today is at 120 days. That meant we couldn’t ship to the West Coast. But our first distributor found us, as they were seeking a crème fraîche supplier, and we were the first one in the marketplace. We also supplied them with fresh European-style cheeses.

A.H.: One of challenges was consumers didn’t know what these products were. The American cheese phenomenon didn’t exist. Some people were doing what we were doing like Capriole, Cypress Grove, Laura Chenel, Coach Farms and Redwood Hill, all regional producers predominately of goat cheese.

We were pioneers, so there wasn’t a context for what we were doing. People didn’t have the same level of trust in farmstead produced items. In those days, if you wanted artisan cheese, you went to Italy and France. American cheese didn’t have a reputation for being good. We’d visit a cheese shop, and they would say ‘run along, our customers are sophisticated, world traveled and know what they want; and they don’t want your stuff.’ It’s hard to get over that notion and that this was something really good. Now if you say you’re a farmstead cheesemaker making small batch products, everyone wants to try it. Bob and I went to the New York Fancy Food Show in 1988 and had a postage stamp space. At that time, they would say, ‘don’t tell people you’re making cheese on a farm’. Today, if you’re making it on a farm, it implies purity, goodness, sustainability, freshness and all the things that resonate with consumers today.

Cheese Connoisseur

CC: You both have mentored and championed others along the way. Talk about the importance of this.

A.H.: Adeline Druart came as an intern from France’s National Dairy School. She was with us for 15 years, and her role in the business just continued to evolve. She ended up becoming president of the company around the time we were thinking of selling it. We wanted leadership in place when we stepped back.

For us, this was an important key ingredient for the success of Vermont Creamery. We needed to replace ourselves in the day to day operations. Bob’s son Matthew has retained the director of finance role. There is still a strong team in place, because we found and recognized the talent and had the opportunity to grow the business. This is what contributed to making the company and brand attractive to suitors.

B.R.: It’s rewarding to see how they’re progressing and how well they’re doing. They still hold the values of what we had when we started the company.

CC: Talk about your decision to sell. How difficult was this?

B.R.: We always talked about selling the company and were thoughtful about our own succession plan. Our point of view was that we each have three sons and felt that we would probably be doing them a favor long term if they weren’t chained to the family business. They could work at the company if they needed the job experience or had interest. But it was always our plan to develop the business and position it for an eventual sale if that was the right path. When its growth began to accelerate is when we started to bring management, talent and experts in. With product quality and the technical side of making cheese, we were doing all that ourselves. We knew, as we grew, that the industry was growing and attracting interest from European counterparts. The pioneers were being bought by Europeans. They had strong distribution and the resources to develop the market. We needed to seriously find a partner. We were looking at how best to make sure Vermont Creamery continued with all the values and employees we had. We had to review our own long-term goals but also what was best for the company as a whole. We were on the road for three months back and forth from Vermont pretty steadily leading up to the final selection. We went and toured and visited the headquarters of several companies, and much of this was European travel.

It was January when we flew out to Minnesota and met with Land O’Lakes. It was 30 below. We felt very strongly that they were the right choice and, in the end, we were very happy and flattered that they came forward. It was easier than we thought. We liked what they said, liked the company and that they were in the dairy industry. We wanted to make sure the relationship with the coop and farmers worked, as it was very important to us.

A.H.: We were funding our growth internally and had great bank relationships. They were happy to lend us money to grow at a sustainable rate. As we were growing faster, the banks would say we should bring in investment capital.

Cheese Connoisseur

At one point, it became clear it would be wise to investigate what’s out there and do a thorough search for the right partner. It was at the beginning of 2016, we knew we should pursue a sale or bring in a significant investor. We were very fortunate, we had a number of very compelling suitors, and we had for some time.

We hired a mergers and acquisition firm, a small New Hampshire company that works with owners, managers and entrepreneurs. They were highly sensitive to the emotional transition for founders as well as finding the right partner, and they did most of the work presenting the business. They were very thorough and insisted we look at every opportunity and possibility. We did so over the course of six months.

CC: How has the cheese industry evolved throughout the years?

A.H.: We were pioneers and among a group of American artisanal cheese companies that drove American consumers to want to buy these products, and that was exciting. Back then it was like the Wild West. If you were thoughtful on how you managed the business, hyper focused and not distracted by every idea that came along, chances were you’d succeed. It was great to do that over the course of 30-35 years. I would say that today it’s harder. The business is difficult with consolidation, more saturation, the cost of selling products is high and customer expectations of the producers is demanding.

Innovation is really important, and American consumers are ready for that. Margins get squeezed more and more, and businesses are really feeling it. But there’s still a lot of opportunity for goat’s milk product and innovation.

Milk production is building in this country, and companies like Land O’Lakes have investment capital to bring more categories to the market. Plus, goat cheese, goat yogurt and goats’ milk are much more widely accepted by consumers today than in the past.

B.R.: Looking at data we still see at Grafton, the cheese industry has definitely changed. Specialty cheese had double digit growth for several years, and we had organic growth at Vermont Creamery. The cheese industry is in growth mode where commodity cheese is flat. Specialty cheese is growing, yet not at the rate of a decade ago. It’s definitely a challenge. There’s more competition in those slots, and shelf placements are even more competitive. The bright spot for artisanal farmstead cheese companies is demand for authentic products. There’s a lot of support for items made on a farm and also in some local areas that we have an advantage in. We have to market as best we can, but the industry has changed.

CC: What comes next?

B.R.: One of the things during the transaction is you have non-compete clauses, so we have to be aware of that. In my case, I went to Land O’Lakes and asked for an exclusion to work with the Windham Foundation on their board of trustees. This is a mission-driven organization that funds many projects and deals with education and environmentally-focused products. They own Grafton Village Cheese Co., among other companies.

A.H.: Most people don’t realize the level of risk business founders live with every day; we put everything into the business. Eventually, you want to give yourself space to do other things, enjoy grandkids and live your life. No one begrudged us, and we had great support.

Cheese Connoisseur

It’s been three years away from Vermont Creamery. I think for me it took about a year or two to be done and emotionally done with the creamery. Luckily for us we didn’t need to give up our baby and work for a large corporation in order to retire. Don and I bought Ayers Brook Goat Dairy from the creamery shareholders, so we kept the farm in the family. I don’t miss the day to day grind of owning Vermont Creamery. I certainly miss my wonderful friends in the industry.

I serve on three non-profit boards all related to agriculture and climate. I have some small business advisory boards I’m on, including startup businesses owned by my sons Miles and Sam. That’s what I feel most at home doing. With the business, it got to the point we were making strategic decisions based on data we were buying, so it was less intuitive, more risk adverse, and took some of the entrepreneurial approach out of the business. Vermont Creamery is doing magnificently well. It’s the number one goat cheese in the market now. Land O’Lakes is seemingly accomplishing what they intended for Vermont Creamery. For me, the products are all still delicious.

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