A word with Alan Reed of Reed’s Dairy

Milk consumption has dropped throughout the country and many family dairy farms have gone out of business. Yet Reed’s Dairy is expanding.

Reed’s Dairy is a family-owned business located on U.S. Highway 20 next to the Idaho Falls airport. The company operates a dairy farm, four retail stores and two home delivery services. Its milk products and ice cream are also sold in a select number of grocery stores in the Treasure Valley and along the eastern Idaho I-15 corridor. The company expanded into the Boise area when they acquired the Boise Milk delivery service five years ago.

The dairy retails skim, 1%, 2%, whole, raw and chocolate milk plus seasonal nogs, butter, yogurt, cottage cheese, cheese curds and cheddar. It sells its ice cream as both a retail and wholesale product. The retail stores also sell third-party products such as Ballard and Gossner cheese, fresh-baked goods, salsa, coffee, honey and sweets from Idaho producers.

Reed’s chocolate milk and ice cream are top sellers. The chocolate milk is known for its innovative use of potato flakes. The ice cream is hand-crafted in small 5 gallon batches using a traditional batch freezer and the dairy’s proprietary ice cream mix.

The Idaho Business Review recently sat down with Alan Reed to talk about the company’s successful expansion in a time of declining milk consumption.

This transcript has been edited for length and clarity.

When did the Reed family first start farming in Idaho?

My great-grandfather moved here from Iowa. I don’t remember the year. He settled on this piece of ground. Then my grandfather was born here and he lived here. We just have always been here.

When did the Reed farm get into the dairy business?

1955.

Was it originally a dairy selling products directly to consumers or did you sell your milk off to a milk plant that packaged it and then distributed it?

At first, we were selling it to another processing plant, but we were also filling bottles out of the bulk tank and putting in a fridge. Then people would come in and put their money in the box on top of the fridge and take their milk. That was our first retail store.

Was it here (at the Idaho Falls dairy farm location)?

Yes. So we did that for a little while. Then we hauled the milk to the Challenge plant there along the (Snake) river. They packaged it for us, and we delivered it door to door. We also sold it out of here when we built more of a storefront. Then in 1962, we put in our own processing equipment and started packaging our own.

Did the Reed family farm have a lot more land before the airport established itself next door?

Originally we owned the ground from here clear up to where the terminal building is now. They bought the ground from us. My grandfather had a house up there.

As a kid growing up, we farmed about 3,000 acres of ground out this way and up towards the Osgood area. That was a lot of acreage even for around here. It’s smaller these days. So we had that farming ground plus we had the dairy operation.

Is there any of the farmland left?

Well, my brother, he still farms. When dad and his two brothers divided things up, the farm ground went one way and the dairy the other.

Reed’s Dairy is a family farm and business. Is there someone in the next generation who will be taking it over when you step down?

One of my sons is active in the business here, so it’s going to stay in the family. That’s the goal.

When did you expand into ice cream?

We started making ice cream in about 1980. I wanted to make ice cream, and so I went to North Carolina State University to their ice cream course to learn how to calculate mix and make ice cream.

Then when I came back I was looking for equipment. Doug Mander did our refrigeration work. He used to have an ice cream store down by Idaho Falls High School, and it had been closed for some time. So I told Doug that I wanted to make ice cream. I don’t know if it was his or if he found it, but he had a small batch freezer. We bought it from him and we used that for a short while until we outgrew it and bought a bigger batch freezer.

You used to have your retail store in that small space next to the old barn. Then you added a drive-thru and then the new larger store. When did you get the idea to start expanding your retail?

If you don’t expand your business, you’re just going to die. It’s that way in any business. The retail stores are how we sell ice cream. We stepped out and opened up the store over in Ammon. That was about six years ago.

Then we had an opportunity to go over to Boise with our home delivery. We were there for about a year and everybody wanted our ice cream. People would say, “Well thanks for bringing the milk, but we really want your ice cream.” So we stepped up and put together an ice cream and dairy store in Meridian. At the same time, we were building our new store here (in Idaho Falls). We opened (the new Idaho Falls store) in December 2017. We opened the store in Meridian in about July 2017. Then about a year and a half ago, we opened our second store in the Treasure Valley in southwest Boise.

How did you manage home delivery in Boise? That’s four hours away. Are you loading a truck up every night? Did you establish a place where you have a freezer?

Yes, we have a refrigerated warehouse. We load the semi here and take it over there. It’s still all Idaho Fall cows.

How many cows do you have?

We’re milking about 190 right now. We can grow a few more cows. We could really grow up to 250 pretty easily. We milk them twice a day. Two to three times a day is usual. That’s 8 gallons per day per cow.

You’ve got the two stores here and you got the two stores in Boise, and you’re still doing all of your home delivery. Do you think you will be buying more dairy land at some point to expand into more cows if you keep growing? Do you intend to keep growing the business?

Like I said, if you don’t grow then your business dies, so yes.

People are not drinking as much milk as they used to. Families that typically would buy 6 to 8 gallons of milk a week now buy a gallon and a half of milk a week. If you look at the consumption (of milk) nationwide, it’s got a pretty steady downward trend and our sales kind of follow that. It takes us a lot more customers to sell the same amount of milk than we did 20 years ago, even 10 years ago. So the milk business is really changing rapidly based on the amount of fluid milk that people are drinking.

So are you making up for it with ice cream and all the products?

Ice cream is a really important part of our business right now.

Everyone knows about your chocolate milk. What gave you the idea to put potato flakes in it?

That goes back a long ways. I had developed a low-fat ice cream, no sugar added, with potato flakes as part of the formulation. Then the thought came to me that if I can put potato flakes into the ice cream, I can probably figure out how to put it in the chocolate milk instead of non-fat milk powder because the potato flakes were a lot less money. That was back in 1985.

So what’s your next business move?

We’d like to have another store over in the Treasure Valley someplace. We would also like to have one somewhere in the northern Utah area. We have a lot of people asking for it in that area.