Thinking About Value-added Dairy? We Can Help!

Many of my conversations with dairy producers have turned to the possibility of starting a value-added dairy business. Their idea usually begins with bottling their own milk and seeing where that may lead. If you are an entrepreneur and are considering starting a value-added dairy business, there are many resources to help you in deciding whether or not this might fit into your future. The Penn State Extension Value-Added Dairy Team can also provide assistance to existing dairy processing businesses that are seeking to grow, develop new products, or need to troubleshoot issues currently being encountered.

While we are constantly noting questions from producers and processors, providing technical assistance, observing and responding to trends in the industry, and following changes in consumer habits, we also conducted a formal needs assessment survey in 2019 with many Pennsylvania dairy processors. The collective responses from the respondents provided very useful information that our team has considered and is using to develop resources to meet these technical needs.

Many of the respondents represented the farmstead and artisan segment of the value-added dairy industry in Pennsylvania, with 50% indicating that they were very small processors, meaning they had five or fewer employees. Pennsylvania is home to dairy goat and sheep flocks, and some respondents indicated using milk from these species. The majority of respondents also sold their products locally or within 100 miles of where they were produced. Slightly over half of the respondents processed fluid milk products. Interestingly, while representing a smaller portion, notably more of the respondents who reported that they manufactured other dairy products, such as cheese, cultured products, butter, and frozen desserts, indicated they planned to increase their capacity to add new flavors or pack sizes.

The need for technical support with product development, manufacturing, equipment assistance, and troubleshooting varied by product, with ice cream processors more frequently expressing a desire for assistance. Specific topics of interest included assistance with facility layout and design, understanding regulations, and implementing laboratory testing and food safety practices. Additional topics of interest included pasteurizer operations, sanitation, sensory testing, product labeling, and marketing. The overall findings of our survey indicate that Pennsylvania has a diverse dairy products manufacturing industry with a wide range of needs.

While Penn State Extension educators and faculty are continuing to develop resources, we currently have many existing resources in the form of webinars, articles, online courses, podcasts, and manuals. These materials can be found in the Dairy Food Processing section.

For potential value-added entrepreneurs who are in the process of gathering information, a series of 10 articles and corresponding short videos was developed and provides a good place to start. These materials cover:

• basic considerations for a value-added business, 
• marketing,
• matching production and capacity,
• specialty and niche markets,
• regulations,
• specific products, including fluid and flavored milks, cheese, cultured products, and frozen desserts.

The articles and videos are available in English and Spanish. Additionally, several introductory webinars such as What You Need to Know About Starting a Value-added Dairy Business, Considerations for On-Farm Processing, and Explore Starting a Value-added Enterprise, are archived on the value-added dairy foods website.

If you prefer to listen to your information, episodes 7.1–7.4 of the Bovine Banter podcast focused on this topic. 

For those wanting to take a closer look at dairy food processing, many articles on the website can provide more information on business management, production and processing, regulations, and food safety and sanitation. A three-part webinar series on Getting Started with Labeling Dairy Foods covers The Basics of Dairy Food Labeling, Special Topics -Allergens and Others, and Using Labels in Marketing Dairy Foods to Consumers. Another webinar series features guest presenters who provide more in-depth information on topics including:

• Liability Issues for the Value-added Dairy Foods Processor
• Facilities for the Value-added Dairy Foods Processor
• Marketing Value-added Dairy Foods to Grocery Stores
• Equipment for the Value-added Dairy Foods Processor

This is an ongoing series with new topics coming this fall.

If an online course is your preferred method of learning, Introduction to Value-added Dairy and Basics of Milk and Dairy Foods Handling are available. The Department of Food Science at Penn State University offers numerous courses on food safety and dairy topics. A list of these courses is available online. Courses covering dairy manufacturing and food safety, include the Ice Cream Short Course, Cultured Products Short Course, Pasteurization Short Course, The Science and Art of Cheese Making Short Course, Preventive Controls for Human Foods -Dairy Foods Processing, Dairy Basics: Fundamentals of Quality and Safety, and Hazard Analysis and Preventive Controls for Small-Scale-Scale Dairy Processors.

If you are thinking about a value-added dairy foods processing business, there are many resources available to help you make an informed decision or to grow and support your existing value-added dairy business. Our team is also available to assist. Team members are Dr. Ginger Fenton at gdc3@psu.edu and Sarah Cornelisse at sar243@psu.edu.