Episode 64: Got Milk? Glanbia And Their Partners Invest in $555 Million Dairy Processing Plant In Michigan
March 23, 2020 | By: Intisar Wilson
St. Johns, Michigan is a small community of just under 8,000 people. A half-billion dollar dairy processing plant is being built here by Glanbia, an Irish nutrition group with operations in 32 countries. The project is a joint venture between Glanbia and their partners Dairy Farmers of America, Select Milk Producers and Proliant Dairy Ingredients.
Expected to open in November 2020, the “Midwest Cheese” plant will employ 290 people and process 8 million pounds of milk every day.
For the company perspective, we interview Glanbia’s senior vice president John Dardis. And for a description of the dozen-plus, state and local entities that were involved in this complex project, we interview Keith Lambert, Vice President of Business Attraction of the Lansing Economic Area Partnership (LEAP).
Patience: About 24 miles north of Lansing is St. Johns, Michigan, a small community of just under 8,000. The community has described itself as the mint capital of the world, a legacy from the early 1900s when companies like Wrigley’s Chewing Gum chose to purchase mint leaves from area farmers. Every August, they celebrate this heritage with the St. Johns mint festival.
Andy: A much bigger development is underway now in St. Johns as Glanbia and their partners, Dairy Farmers of America, Select Milk Producers, and Proliant Dairy Ingredients have pooled their resources to construct a half-billion-dollar dairy processing plant on 146 acres of land.
Patience: Expected to open in November 2020, the plant will employ 290 people and process 8 million pounds of milk every day. That’s a lot of milk.
Andy: The announcement was a huge win for St. Johns, the Lansing Economic Area Partnership, or LEAP for short, and the Michigan Economic Development Corporation. So welcome to episode 64 of “The Project: Inside Corporate Location Decisions.” I’m Andy Levine of Development Counsellors International.
Patience: And I’m Patience Fairbrother, also with DCI, and Andy’s co-host of “The Project.” This week, we bring you the story of Glanbia and a decision to build a $555 million facility in St. Johns, Michigan. Andy, you did the interviews on this one. Set us up for this.
Andy: I’ll set it up in just a moment. But Patience, I first want to ask you two questions about milk. Are you ready for these?
Patience: Yes, I’m ready.
Andy: Okay. First question, this is an easy one. As a child, did you drink a lot of milk?
Patience: Yes, I did. I heard it it makes you grow stronger, so I definitely did.
Andy: Okay, that’s good. Well, we know that you’re very strong, so it worked. That’s good. Here’s the second question, a little more difficult. How many dairy cows are there in America right now?
Patience: How many dairy cows?
Andy: Yes. I’m distinguishing that from beef cattle, but dairy cows.
Patience: Okay, dairy cows, I’m gonna go with 100,000 dairy cows.
Andy: A hundred thousand. You are just terrible at guessing numbers. There are 9 million dairy cows in America, something like 94 million total cows in terms of cattle and beef cows and that sort of thing, but 9 million dairy cows. Well, okay, that’s enough about milk. Let’s talk about milk processing, cheesemaking, and the Glanbia project in Michigan. Glanbia is an Irish company. It is the largest producer of American-style cheeses in the United States. The Glanbia plant in Michigan will go under the name Midwest Cheese.
This was a complicated project because it involved a joint venture with Glanbia in the lead but three other companies investing in the project, and it was a complicated project because it involved over a dozen economic development and academic and government entities to make this deal actually happen. We’re going to start today’s episode with John Dardis from Glanbia.
John: I’m John Dardis. I work for Glanbia. I’m a senior vice president for corporate affairs and sustainability. I’m from a farm in Ireland, did agricultural science, did a Ph.D. in plant biotechnology, which brought me to the U.S. originally. And then I went back to Ireland and began a career as a civil servant, which I did for 14 years including a stint in Washington, D.C. as the agriculture and food counselor for Ireland. I joined Glanbia from there. So despite my Irish accent, I never actually worked for Glanbia in Ireland. I had to come to the U.S. to do that.
Andy: Can you give me the elevator speech about the company?
John: Glanbia is a global nutrition company headquartered in Ireland. We kind of run the gambit from the cow to the bodybuilding top [SP], to be honest, and we are the global sports nutrition brand leader. We’re the number one American-style cheese manufacturer and whey protein solution provider.
Andy: How many people does the company employee overall?
John: We’re now at 7,000 people, believe it or not, around the world. So we have people in 34 countries.
Andy: Glanbia has been in the United States for a long time.
John: We began life investing in the U.S. back in the late 1980s and really, the key footprint we had was in Idaho where we run three cheese plants there and a whey plant. And the success of that business led us on to invest in New Mexico, which is Southwest Cheese. That’s a joint venture partnership, which is the same partnership we’re bringing to Michigan.
Andy: Can you tell me about the experience starting up Southwest Cheese?
John: Yes, Southwest Cheese, it’s interesting because it was a Greenfield site similar to what we’re doing with Midwest Cheese. That was built in 2005. And again, it’s a joint venture, so Dairy Farmers of America and Select Milk Producers have been our partners from the get-go on that operation and, Andy, it’s been a huge success. The volume of milk coming into that plant has doubled since 2005.
In fact, last year we hit 40 million pounds of milk a day. High volume, high output, but a model that works. And really on the basis of that success, not just domestic but also international markets, we decided that it was the right partnership to take to Michigan.
Andy: So let’s talk about that. I just wanna understand the decision to open a second facility in the United States. What were the drivers behind that decision?
John: The drivers with Southwest Cheese was a growing demand for dairy, a growing demand for export markets for U.S. dairy. So there were, kind of, two key decision points. But fundamentally what we’re seeing, and it’s true today, is the protein demand around the world continues to go up and dairy is the best source of protein you can by. So those fundamentals really haven’t changed.
I think the other interesting point with New Mexico, with Southwest Cheese, is a high-quality milk supply that needed a capital investment to reach that market and a similar dynamic that we’re seeing again with Michigan.
Andy: When you started looking at a second facility, how did the road lead you to Michigan?
John: You know, we’re not the only ones, obviously, that see the market opportunity and see the export markets for protein growing. So that being said, for some time we had been looking and fundamentally, and this is not rocket science, you need milk to run our plants. So our first port of call with Michigan was that growing milk supply. And I think, as well, we got engaged in discussions, you know, there’s a lot fo Michigan milk that leaves Michigan to be processed, and the demand was clearly there.
There was strong year-on-year growth in that milk supply and so that, kind of, core piece was the thing you’ve got to get locked in.
Andy: So I just wanna go back, and you sort of covered this, but if you had to say the top three reasons that made St. Johns the right place to put this plant, what would be at the top of that list?
John: Milk, number one. I think the transportation infrastructure around St. Johns is number two for us. And number three, in my opinion, would be the positive business environment. And if I was to tease that one out a bit, Andy, that really comes down to the support we’ve had locally through LEAP right up to the governor’s office. We’ve been blown away by that Team Michigan ecosystem that it just kind of assuages all the concerns you would have on investment and it makes sure that you are in the right place, investing in the right place, and settled for long-term success. So when I say positive business environment, that’s what I’m trying to capture.
Patience: So this is kind of funny, Andy. Most of the companies we profile on “The Project” talk about finding the right talent. Glanbia was more interested in finding the right cows.
Andy: Very true, very true. What they found in Michigan was a large and growing number of dairy farms, but they also found a lot of milk that was leaving the state to be processed somewhere else, and that spelled opportunity.
Patience: So all roads were leading to Michigan and that’s when Glanbia first got on the radar of the Lansing Economic Area Partnership. We talked with Keith Lambert, vice president of business attraction.
Andy: How did Glanbia first get on your radar?
Keith: So, obviously, in this world, we oftentimes find out about new projects via the site location consulting community. This one was a really interesting project because it went through a lot of different iterations over the years with different companies involved. Glanbia was introduced with…they were working with Baker Tilly out of Madison, Wisconsin and we got engaged with those folks on the very front end in 2015. So the project kind of goes back to that, and then there were fits and starts finding the right joint venture mechanism, and then basically we got re-engaged. We had done site searches and things for them but we basically got a call from Kristin Wakefield down more on the real estate side working with Glanbia in the fall of 2017.
And they were basically like, “Look, the joint venture’s ready to go. We got Glanbia as the lead and they’re going to work with Dairy Farmers of America and Select Milk.” So this was Kristin telling us, like, we need to find the property and get into due diligence on-site immediately because they’re ready. They have the joint venture, the financial structures ready to go, and we want to move forward with this thing. But it was very complex in terms of assembling the land and getting different municipalities involved and then stacking all of the different state and local tools together to make the thing pencil [SP].
Andy: Did it take much to convince Glanbia that you had the workforce that they would need to run this?
Keith: Well, that was actually one of our strengths. When we were looking at some of our competing regions across the State of Michigan, they were generally looking at pretty rural markets because that’s where…Again, as John pointed out, where the milk supply and the 1,300 or 1,400 dairy farms in the State of Michigan, they’re kind of clustered in different areas and, generally speaking, those are very rural markets and the challenge with rural markets is they don’t have a lot of people. So I think that was one of the things that we were really…we saw that as a strength, and the Lansing region is a region of about half a million people.
Patience: From the investment side of things, there were four partners involved in this project. But from the economic development side of the equation, it was an even bigger team.
Keith: The State of Michigan really came together between the Michigan Economic Development Corporation and the Michigan Department of Agriculture and Rural Development, MDARD. But then the department, which is now Eagle [SP], of environmental quality and then MDOT, they also had key funds. There were four different state departments that were all coming together to lay the groundwork and the infrastructure to make this thing go. So they were super essential. There were three local government units that were all super essential and the utilities all stepped up as well. And then that’s not even getting into workforce and the role that Lansing Community College, Michigan State University, Michigan Works. So it takes a lot to make a project like this go. It was the most complex thing I’ve ever worked on and it was just really a joy to be able to have a key role in the whole thing.
Patience: John Dardis couldn’t have been more complimentary about the team in Michigan.
John: With the footprint we have globally, we have a lot of experience dealing with local groups, primarily in the U.S., but in Ireland, in the U.K., Germany, around the world. And so we know what good looks like in this and I think that’s when I started to think through all the different partnerships we’ve had in Michigan, particularly with the Lansing Economic Area Partnership, but with the Michigan Economic Development Corporation, the Department of Agriculture in Michigan, the Department of Commerce in Michigan, the governor’s office, the St. Johns community who have helped us work through different complexities around land parcels. To me, looking at it, it always seems it’s Team Michigan showing up for us. Michigan, we’ve always felt, has been one team facing the customer and ensuring that your investment is in the right place.
Patience: Andy asked John about any future plans after Midwest Cheese is operating in Michigan.
Andy: So you have Southwest Cheese, you have Midwest Cheese, will we see a Western Cheese, or Eastern, or Southern Cheese in the coming years?
John: I think if I mention that to my operations colleagues who are trying to get this plan to fully operate by the end of the year, it could cause me problems.
Andy: Okay. So we’ll get this one operating first. I’m just curious, you know, given your background growing up on a farm, do you find it particularly rewarding to work with, say, Michigan farmers on this kind of initiative?
John: It’s the reason I come to work, Andy. So Glanbia today is still our largest shareholder and Glanbia PLC is the dairy co-operative in Ireland. So, I mean, we all have a purpose in our day. I told you what Glanbia’s purpose…I fundamentally want to give back to farming communities.
Patience: So Andy, you did the interviews with both John and Keith. What were your big takeaways from the discussions?
Andy: Well, we’ve done a couple of episodes that have been focused around agricultural products. I want to take you back to the Little Potato Company, they needed to be close to a cluster of potato farms. The Ruyi Group, a Chinese textile company, they needed access to American cotton and ultimately ended up in Arkansas. And now Glanbia and their need for milk. Now, with each of these companies, the starting point was access to the right agricultural products, potatoes, cotton, and milk, and this has always been the primary screen to get the search started.
Patience: It seems like with this one there were a lot of different players involved in the project.
Andy: This is complicated from both sides of the equation. So Glanbia was the lead and they operate the cheese and the whey processing plant. The Dairy Farmers of America and Select Milk Producers, they’re responsible for the milk supply and working with the local farmers. And then there is Proliant Dairy Ingredients, they operate a separate whey permeate processing facility, which if you don’t know whey permeate, Patience, that is used in everything from baked goods to beverages. Did you know that?
Patience: I didn’t actually know that. I had no idea what permeate meant, actually.
Andy: Okay. Well, we’ll keep moving here. Now, if that wasn’t complicated enough, that’s on one side of the equation. The other side of the equation is the economic development side of things. And there were over a dozen different partners in this, state and local government officials, different economic development groups, the utilities, academic institutions. And really, John Dardis couldn’t have been any more complimentary about how these different groups work together.
Patience: Well, Andy, I think we’ve milked this episode for all its worth.
Andy: No, we’ve covered this project very thoroughly, Patience. We didn’t skim over anything.
Patience: Okay, no more bad jokes. Let’s just start the music.
Andy: So that is a wrap on episode 64 of “The Project: Inside Corporate Location Decisions.”
Patience: Our sincere thanks to John Dardis of Glanbia and Keith Lambert of the Lansing Economic Area Partnership, or LEAP for short. We also wanna thank Victoria Meadows, LEAP’s vice president of marketing and communications who help set up these interviews.
Andy: “The Project” is sponsored by DCI. We’re the leader in marketing places and have served over 450 different cities, states, regions, and countries. You can learn more about us at aboutdci.com.
Patience: We hope you will keep listening. There are many more projects to come.