FROM CULTURE TO CULTURES : True Tales From the Yogurt Queen of Eastern Canada

Naivete is a highly underrated commodity in the business world today. How many small businesses were started because innocent entrepreneurs happened to be blissfully unaware that their ideas could never work?

This doesn’t mean, of course, that every harebrained scheme is automatically going to lead to success, but a certain modicum of naivete will conveniently blind the budding entrepreneur to all the frightening pitfalls and obstacles that a more informed individual would find utterly daunting.

I speak from experience. If anyone had ever told me that I was destined to become the Yogurt Queen of Eastern Canada within 15 years of attaining a Ph.D. in Romance languages from Harvard University, I’d have had him committed. And yet that is just what happened.

My husband, Gordon, and I are now the owners of a $2-million-a-year yogurt company, Peninsula Farm Ltd., that competes successfully with such international behemoths as Kraft, Beatrice and Yoplait, and all because we made the mistake of buying a cow.

Our story began in New York, where Gordon owned and operated a thriving management consulting business on Park Avenue. But when my newly minted doctorate failed to land me a professorship in the area, Gordon immediately saw this as an opportunity to escape from the boredom of his daily routine and throw himself into the arms of an uncertain future.

“Look for a job anywhere you want,” he urged me. “Just make sure it’s somewhere near the ocean.”

Gordon was an avid yachtsman and was fed up with the traffic jams on Long Island Sound, so when I received an offer from Dalhousie University in Halifax, Nova Scotia, I eagerly accepted.

One thing soon led to another. The oceanfront property we bought just happened to be a farm, and before we knew it our good neighbor was prevailing upon us to get some “critters” to “gnaw off the grass” so that it wouldn’t revert to alder bush.

The last thing we wanted to do was ruin the land that the local farmers had cleared and tended for generations, so we dutifully drove our truck to an auction to buy the necessary beef cattle. It also seemed like an eminently sensible idea to get a milk cow as well, for all of us, including our two little girls, were fond of dairy products.

Daisy quickly became the head of the household, subordinating us to the position of lackeys in charge of cleaning, feeding and milking her.

We meekly accepted our servitude, for which Daisy rewarded us by producing more milk than we knew what to do with. We tried reasoning with her, but she seemed unwilling to cut back her milk supply. Nor did she understand anything about Sundays and holidays, so we decided to make the surplus milk into some yogurt for a local health food store.

I spent endless days and nights trying to incubate gallons of milk in the oven, in the furnace room and even in a tropical fish tank, but I was so unsuccessful that Gordon had to go out and buy six pigs to eat my mistakes.

I eventually settled on a system using Styrofoam picnic boxes that doubled as delivery cases. As for perfecting the recipe itself, it seemed a simple task to put out a premium yogurt using fresh milk, fresh frozen uncooked berries and no preservatives or artificial ingredients. The results were irresistible, and I remember vaguely wondering why other dairies didn’t produce a similar item.

Apparently there were a good number of discriminating consumers who agreed that Daisy’s yogurt was indeed a special treat, for soon orders began coming in from health food stores as well as delicatessens and various independent outlets. As word spread and sales increased, the white Styrofoam boxes multiplied until they lined all the walls of the first floor of our igloo-like house.

By this time, we had begun to realize that we had somehow been sucked down the yogurt trail by a sort of invisible vacuum cleaner.

After three years, we were making a profit of $50,000 a year in our kitchen, and we were controlling our start-up costs by turning the pigs into ham sandwiches for the visitors who came swarming to the farm in search of the homemade ice cream we had learned to make with Daisy’s surplus cream. But the cramped conditions in our house made it abundantly clear to us that we would soon have to construct a yogurt factory to handle the ever-increasing demand.

Urged to Cut Corners

Gordon, who used to while away his days in New York advising his corporate clients on the finer points of venture capitalism, was delighted to be head over heels in debt. But I was unaccustomed to the realities of business, and I promptly panicked. I wanted to amortize the cost of our shiny new factory as quickly as possible, so while Gordon milked the cows, I went forth into the world seeking new accounts.

And so it was that my real education began, almost a full decade after earning my degree. I soon learned that a manufacturer hoping to place a product in most chain stores must pay for the listing and the shelf space, as well as provide rebates to the retailers, volume discounts and co-op advertising fees.

To do this, I was advised by the chain store buyers that I would have to cut costs by making my yogurt with powdered milk instead of fresh milk and cooked fruit instead of fresh frozen berries. I also would be in a better position to pay rebates, they assured me, if I reduced the amount of fruit by half and beefed it up with artificial flavor or “natural” flavor enhancers.

And it would be more profitable, too, if I added preservatives to increase the shelf life, since I was automatically responsible for replacing any yogurt that didn’t sell by the expiration date or that was spoiled because of faulty refrigeration in the store. I was warned that if I didn’t “adapt” to these realities, I could never hope to succeed in today’s highly competitive market.

Gordon and I chose not to adapt. We refused to compromise the quality of our yogurt, making do instead with the worst and least shelf space available. We ran around to all the stores to make sure that what little space we had was well stocked, and we carefully rotated the containers so the oldest ones were in front.

We also devised a complex inventory control system to keep our credits to a minimum, and we even decided to ensure the freshness of the product by pulling it from the shelves five days before the expiration date.

Yet despite all our efforts, our sales were not what we expected. The chain store customers were far less interested in yogurt than the health food enthusiasts had been, so Gordon decided to set up a booth in a different store each week and hand out free samples.

Market Dictated Growth

It was an uphill battle all the way, for many people saw yogurt as a rather exotic food compared to their usual fare of codfish and potatoes. But Gordon persevered. By dint of sheer tenacity, humor and irrepressible energy, he managed to persuade even the most reluctant shoppers to give our product a try, until eventually it became known as the yogurt that yogurt-haters love.

It was a laborious and frustrating way to penetrate the market, but it worked in the long run. Although word-of-mouth proceeds at a rather leisurely pace, we felt it was really the best form of advertising, and the price was certainly right.

Perhaps the most important result of our slow progress in the early years is that it prevented us from going off the deep end financially. We allowed the market to dictate our rate of growth, so we were able to maintain a healthy cash flow and a fairly well-balanced debt/equity ratio.

If it was our naivete that initially spurred us into playing David to the Goliath food industry, it was obstinacy, hard work, careful start-up cost management and, above all, a premium quality product that enabled us to succeed. We were able to prove that small can be beautiful, and that it may, in fact, be the only way to guarantee that top-quality products get onto the shelves.

We also proved that successful industries can be developed in rural areas where the life style may provide an attractive alternative to some of the grimmer realities of urban living. We have long since outgrown our critters, of course, and Daisy is now in Cow Heaven. But she has been immortalized on our containers, and her story is being translated into 15 languages. So, her moos will soon be heard around the world, and it is our hope that small entrepreneurs everywhere will feel inspired by her example.