When disaster strikes a business, sometimes it’s the competitor who steps up with the helping hand.
Even if that’s not exactly the way Jeff Kleinpeter sees things. His family business, Kleinpeter Farms Dairy, will begin processing, packaging and distributing the milk products of fellow south Louisiana dairy company Smith Creamery after an explosion and fire crippled Smith Creamery’s dairy plant on June 22.
“It’s not necessarily that we look at them as competition,” Kleinpeter said during a news conference Monday. “We look at them as partners in an industry.”
The new partnership stems in part from Kleinpeter’s commitment to aid a fledgling Louisiana dairy industry that has shrunk drastically in recent decades as more dairy production moves to other parts of the country or places like Mexico. Kleinpeter stressed — backed up by the Smiths who were on hand for the announcement — that the gesture to get the Smith Creamery milk back on store shelves is simply what neighbors do for each other in times of crisis.
“We are some kind of excited to be doing this for a Louisiana family,” Kleinpeter said. “These folks are very special to us. We’ve been friends for at least 10 years. And to come together to help someone in need, that’s just the way things are supposed to be.”
Kleinpeter Farms Dairy will begin processing, packaging and distributing Smith’s whole and fat-free milk, half-and-half cream and heavy cream. The Smith milk will continue to be processed just as before — with pasteurization, but will not be homogenized.
The products were loaded onto trucks Monday afternoon, ready for distribution to all 50 stores that used to carry the Smith products before the explosion shut down the Mount Hermon plant.
Without the help from Kleinpeter, it’s not clear if Smith Creamery would be able to continue operating, said Warren Smith, owner of Smith Creamery. He noted the negotiations began about two weeks ago when he received a call from Kleinpeter.
“Words can’t express how I feel about the events that have taken place,” said Smith. “We’ve had some things to deal with and this is just tremendous for us.”
It’s not yet clear what the future holds for the Smiths beyond this agreement they’ve entered with the Klienpeters.
“I think what we’re going to do is step back and do some planning, and see what the future holds for us. I’m not real sure exactly what that is,” said Michelle Hickman, a daughter of Warren Smith. She helps run the dairy.
“Let’s get some hope restored, so that they can rebuild their business,” Kleinpeter said.
Neither the Kleinpeters nor Smiths were able to put a timeline on the partnership, saying it would continue until it’s no longer needed.
“We’re going to continue our partnership until they’re on their feet,” Kleinpeter said. “Now if that takes three months, fine. If it takes six months … if it takes five years, it doesn’t matter. As long as we can help them, we’re going to be there to help these guys out.”
When it comes to distribution, Kleinpeter and Smith products are in many of the same grocery stores, making delivery relatively easy, said officials from both companies.
In fact, Smith milk will soon be appearing in more Rouses Supermarket locations in Louisiana because of Kleinpeter’s added distribution network.
“So actually if you stop to do a little time-out and think about it, we’re going to grow their company,” Kleinpeter said.
In terms of the partnership’s financial details, Kleinpeter’s packaging and distribution costs — along with a nominal profit — is built into the cost of each container of Smith Creamery milk on store shelves, Kleinpeter explained. That handling amount, which was not disclosed, will be kept by Kleinpeter, and whatever is left goes to the Smiths.
However, this processing, packaging and distribution amount is still less than what the Smiths were paying while operating on their own, Kleinpeter noted, if only because Kleinpeter’s operation is larger and more efficient.
“So they’re going to make more than what they made packaging it themselves — for now,” Kleinpeter said. “But you know what, they rebuild that company, they can make it even more efficient.”
So far, Kleinpeter Dairy is prepared to process and package Smith Creamery milk twice a week, Kleinpeter said. About 3,000 gallons of milk have already been processed.