Dairy Farmers of America Acquires Cumberland Dairy

Dairy cooperative Dairy Farmers of America (DFA) announced last week that it had acquired New Jersey-based Cumberland Dairy, a family-owned producer of ultra-pasteurized food and beverage products, for an undisclosed sum.

Founded in 1933, Cumberland Dairy distributes nationwide and produces private label products for companies including McDonald’s, Wawa, and Shake Shack. But it was the company’s ultra pasteurization capabilities, which allow it to produce extended shelf life products, that caught the eye of DFA.

Speaking to BevNET, Cumberland Dairy president Carmine Catalana IV — grandson of founder Charles Catalana — said the deal will allow it to expand its size and scope. The company will retain all 180 current staff members and remain under management by the Catalana family.

“DFA had spoken to us once before but at the time it just wasn’t right for us,” Catalana said. “Their interest from their farmer members was to be in the extended shelf life arena… They felt like the solution for them, as we ultimately felt like it was for us, was to build from the base of business that we have.”

Pat Panko, senior vice president and COO for fluid milk and ice cream at DFA, told BevNET that Cumberland Dairy has synergies with DFA’s existing East Coast infrastructure, with its ultra pasteurization capabilities complementing other fluid milk plants in the cooperative’s network, including Oakhurst Dairy in Maine, Dairy Made Dairy in Maryland, and Guida’s Milk in Connecticut. Panko added that Cumberland Dairy’s facilities will be used to broaden private label offerings for existing customers in the region.

“It’s a great portfolio extension,” Panko said. “We’re already in the fresh fluid milk, we’ve got a cultured facility, we’ve got an ice cream business. This really gives us a larger offering we can go to our key customers with to grow our business and become more relevant with our customers.”

Over the past six years DFA has acquired a number of dairy companies, including Oakhurst Dairy and Dairylea Cooperative Inc. in 2014, Dairy Maid in 2013, and Kemps in 2011.

“We’ve added a lot of family-owned businesses and a lot of them have strong commitments to their employees’ families and to their community,” Panko said. “We find their values really align well with DFA’s values, there’s a strong connection with those kinds of businesses.”

Absent from the Cumberland Dairy acquisition, however, is Innovation Foods, a sister company founded by the Catalana family in 2008 which through a partnership with NextFoods produces beverage products for GoodBelly Probiotics. According to Panko, Innovation Foods was not “core” to DFA’s goals but was open to purchasing the company as well. However, the Catalana family did not want to seize control and will instead continue to operate it independently. Catalana’s daughter, Rachel Bur, runs the Innovation Foods facilities.

According to Catalana, there were shared resources between Innovation Foods and Cumberland Dairy that will need to be divided, but the company is poised to succeed and grow on its own. In addition to GoodBelly Probiotics, Innovation Foods produces beverages and base flavors — including juices, teas, and flavored waters — for private label customers.

“I don’t know what product we’ll be making in five years,” Catalana said. “I think it will be liquid, I think it will be food, and I think it will have a long shelf life. And I think I can make that statement on both sides, both for us leading the efforts for Dairy Farmers of America with Cumberland Dairy, and I believe innovation in a separate arena [at Innovation Foods], with a separate group of products, may have the same future in a non-competing way.”