To maintain economic survival for a small herd at a low payout, Gav Hogarth and Jody Hansen launched their Bella Vacca Jerseys branded milk delivery service. Chris Neill reports.
In the 2015/16 season the farm milk price dipped below the cost of production for many farmers. For some, particularly small herd owners, it was the demise of their farming business and for others it was a challenge that created new opportunities. Gav Hogarth and Jody Hansen took the road to opportunity, which has demanded a huge commitment of their time, energy and finance and would have exhausted anyone without their passion and enthusiasm.
Two realities were behind their decision to act. First, for economic survival Jody returned to off-farm work with a daily commute of two hours, which neither she nor Gav wanted. Full participation in farm life and grandchildren was what they sought. Second, they had absolute belief in the quality of the milk they produced and its appeal as a whole milk product.
As 50:50 sharemilkers on 150 ha with 61 ha effective they are milking 160 cows southwest of Moerewa with all the challenges of Northland farming including droughts, floods, and ryegrass/kikuyu pastures. Typically, 6ha of sorghum is grown annually and strip grazed but the 2019/20 drought compromised that. Each year they buy in 80 bales of silage and 60 bales of hay plus around 100t of DDG mix. Around 70% of the platform is flat and in the recent flood was briefly a lake. The 160 cow Jersey herd is producing close to 330kg MS per cow.
The farm has recently completed a Farm Environment Plan, and the property owners are aligned with suggested changes. They include fencing off a wetland to protect flora and fauna including a remnant stand of kahikatea.
The opportunity they saw was to supply pasteurised, bottled milk. With Jody’s accounting skills they were confident enough to sell their house to fund the project after the bank declined their invitation to participate. Within six months of deciding to act, the equipment to pasteurise and bottle was acquired. It took a further 18 months to meet regulatory requirements and sell the first bottles of milk. The brand Bella Vacca Milk was launched with the first delivery of 36 x 1 litre bottles in June 2018.
In overview, the process is simple – feed cows, produce milk, pasteurise and bottle that milk and deliver it to customers. In the initial phase, when there was insufficient income to employ staff, Gav and Jody did it all with Jody working off farm as well. Through their commitment and love of a challenge their business has progressed beyond expectation. While the 2019/20 drought added to feed costs and Covid-19 took away 70% of their Bella Vacca milk sales, hard work and customer satisfaction has already returned their market to pre-Covid levels.
Gav and Jody’s initial projection was for sales of 300 litres per day (9,000 litres per month) of bottled milk and the balance of their milk production collected by Fonterra. Prior to lockdown, sales had peaked over 20,000 litres per month, and there is a revised target of 30,000 litres per month by the end of year 2020. Market growth to date has come from word of mouth. They now employ a trainee manager, two people in the milk room plus three delivery drivers; the current plant has capacity to process 60,000 litres per month with the addition of more labour. Jody and Gav see the team of six trained and employed in the business as critical to Bella Vacca’s success. They are confident a team of 10 could run the business at full capacity and are keen to employ locals.
As their market for whole milk continues to grow, the need to ensure continuity of milk supply becomes critical. In response, the transition has begun to four calvings per year each with 40 cows, with the intention of having at least 120 cows in milk all year. The calvings will be short and coincide with a round of natural mating to beef breeds. The difficulty of maintaining genetic selection with this calving pattern means replacement Jersey cows will be sourced in Northland to maintain Bella Vacca Jerseys.
Few dairy farmers view their brand beyond the processing company they supply. For Jody and Gav, brand development and protection is a key factor in their business. It includes the surety of milk quality and traceability, the environmental sustainability of their farming operation and the recyclable glass bottles for their product. They are marketing 1 litre bottles of whole milk from Houhora to South Auckland, retailing at $3.90 per bottle with “swappa bottle”. For a small business, independent verification of their quality and standards comes through meeting industry standards plus putting themselves forward to be judged by their customers and independent judges connected with other brands that represent their ideals.
The transition has begun to four calvings per year each with 40 cows, with the intention of having at least 120 cows in milk all year.
Jody and Gav were delighted to receive the inaugural Emerging Land Based Business Award from the 2020 Northland Ballance Farm Environment Awards. Judges comments with the award recognised that “energy, enthusiasm and tenacity has seen them and their team overcome all obstacles and become the number one supplier of whole milk in Northland”. There is “passion for the product throughout the whole team, driven from the top”. The judges identified the use of recyclable glass bottles, lowering the farm stocking rate, and enhancing the farm environment as key elements of their sustainability.
This award comes alongside the Outstanding NZ 2020 Food Producer Gold Award. Judges’ feedback is “a great example of a dairy farm who have reduced stock numbers, increased wetlands, reusable bottles, low emissions, environmental plan, family business and employ local staff”. In addition to the award enhancing their Bella Vacca brand, Jody enjoys the use of a Toyota SUV for 12 months and a $10,000 Mediaworks advertising package. The prospect of managing growth with this scale of marketing on their business has them thinking.
Gav and Jody have created a processing and marketing business alongside their milk production business. Jody is the business manager responsible for finance, staff, marketing and distribution, and Gav is farmer, operator, serviceman and customer relations manager. The combination has worked incredibly well and they are looking forward to sharing the joy by bringing family into the business, with daughter-in-law Amy Deal now the trainee manager. To ensure focus on growth of whole milk production and sales they will engage a sharemilker to focus on delivering the quantity and quality of milk required for bottle sales. Reinvestment to build capacity and market will come from a strong cashflow.
The primary goals and aspirations for Jody and Gav are to spend more time with family, particularly grandchildren, and to have an income stream that will allow them to enjoy retirement with talk of fishing and living by the sea. They are still enjoying growing their business and discovering the opportunities in diversification that are spilling from the decision to protect themselves against a low farm milk price. Their transition from dairy farmer to owner of a branded product has been challenging and rewarding.