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A Not so Brief Explanation of the Partnership Between Coconut Bliss & Lochmead Dairy


We were recently asked a very simple and direction question: Are you owned by a dairy?


Here's the simple and direct answer: Lochmead Dairy is now a majority owner of our company, Bliss Unlimited, LLC. Luna and I are still owners as well, but we now own a minority share. Now I'd like to give you a much more in-depth answer that I hope will help you understand our choice and address your concerns as a vegan...


When Luna and I started Coconut Bliss in the beginning of 2005 I was on unemployment, Luna worked part time in a health food store, we had no savings, and it felt like a huge risk to spend $3000 on a small Italian gelato machine that we financed with a credit card. Our production facility was a 15 foot kitchen trailer, borrowed from a friend, that was parked in our driveway. Our initial plan was to have a small, local company, selling bulk tubs to cafes and natural food stores in western Oregon to sell by the scoop. If things went well, we imagined expanding up into Washington, too, and maybe northern California.


Our first wholesale customers were both in Eugene: the Red Barn, our neighborhood natural foods store, and Sweet Life Patisserie, a neighborhood bakery/cafe owned by a friend. After around two weeks of serving Coconut Bliss by the scoop in their deli, Dan, the owner of the Red Barn, told us that he was being deluged with customers who wanted to buy Coconut Bliss in pints to take home and urged us to make it in this form. So we eagerly designed a label and started hand-packing pints. They flew off the shelves at the Red Barn, and soon we started getting orders from the other neighborhood natural foods stores here in Eugene, where it also sold briskly. Very soon we were working 14 hours a day to keep up with the demand.


It became clear at this point that: a) we needed a larger production facility, and (b) the demand for Coconut Bliss might be much bigger than we ever imagined! So over the next few months we raised around $75,000 from friends and family to create a real production facility with a much bigger batch freezer, a filling machine, lots of freezers, and all the other things we needed. We hired some staff and started expanding our range south to Ashland and north to Portland. At this point, Luna and I were doing all the deliveries ourselves with our mini-van, but as we continued to grow, we hired more staff, bought a delivery truck, and expanded our range north to Seattle and south to Santa Cruz. By this point, around the summer of 2007, after only two years, we were already maxing out our production facility!


So we were faced with a difficult choice: 1) stop growing, 2) build a larger facility that would accommodate the rate of growth that we were experiencing (this would cost more than $1 million--gulp!), or 3) consider what had previously been the unthinkable for us--find a co-packer who could make our product for us.


While our original vision was to have a small, regional company, we were receiving e-mails on a daily basis from people all over the country who had heard of Coconut Bliss and were pleading with us to make it available to them. All these people wanted Coconut Bliss for the same reasons that motivated us to make it in the first place—a desire for a delicious ice cream that wouldn't make us queasy--either physically or ethically. How could we say no? So after much deliberation we decided to grow.


To build our own facility would require an enormous capital infusion and would take years. We didn't have enough credit history or collateral to obtain financing from a bank, and even if we could, we couldn't afford the payments. Another option would be to bring in venture capital. This would entail our selling a controlling interest in our company to a wealthy individual or private equity firm whose primary goal would be to grow the business as big as possible as quickly as possible, and then sell it for a huge profit to the highest bidder (most likely an even bigger private equity firm or a large corporation). This was not an appealing option.


After considering the above, the thought of co-packing became much more palatable. With a hearty dose of skepticism, however, Luna and I visited Lochmead Dairy, which is in our neighboring town of Junction City. As we sat with Jock Gibson, whose parents started the business back in the 1940's, and his daughter Kim, who was the plant manager, we began to feel a lot better. At the time, they were still producing a lot of product for Turtle Mountain--in fact the initial lines of Turtle Mountain's products, Soy Delicious and Purely Decadent were developed at Lochmead and exclusively made there for many years. It was heartening to us that Lochmead had extensive experience with both organic and vegan products, and that they understood and honored our values and priorities. They expressed their dedication to making our products exactly the way we wanted them, with our recipes and the ingredient sources that we specified. Jock and Kim were both very excited and encouraging about what we were doing, and offered to help with some of the financing that was necessary to make this jump in scale, which would involve buying ingredients in much larger quantities and switching to pre-printed packaging, for which there were very large minimum orders.


As we made the transition to manufacturing at Lochmead, we also began distribution through UNFI, the largest natural foods distributor in the US. This seemed like a necessary move, because many natural food stores (e.g., PCC in Seattle, the largest food coop in the country), will not buy direct from manufacturers and will only buy through distributors. As a new client with UNFI, we wouldn't be getting paid for many months, so Lochmead's financial assistance at this point was critical. They covered the cost of our first 6 months of production, for which we gave them a 10% ownership share in our company. We felt very grateful and empowered by their trust in us, and it also made sense to Luna and me for the people making our product, because of their critical role, to be directly invested in our success.


But what about the seeming contradiction of a vegan product being made in a dairy plant, or being partly owned by a dairy company? Luna and I were very aware of the issues entailed. I served for several years as a board member of the EarthSave Foundation and have been a longtime advocate of plant-based eating, and Luna has a degree in nutrition from Bastyr University where her studies included the ecological and ethical aspects of diet. Here are the considerations that led us to embrace this choice:

    * We believed that Coconut Bliss, because of its exceptional taste and creaminess, would appeal not just to vegans and lactose intolerant people, as was the case with soy and rice-based frozen desserts, but could win over people who were dairy ice cream eaters, too, and thereby help reduce the overall amount of dairy consumed.


    * The only companies that have large scale ice cream production facilities are dairies, so there was no practical alternative if we wanted to grow.


    * Lochmead Dairy is exceptional in that it in an industry that has become increasingly centralized and corporatized they are a rare model of a bioregional food company. They have their own farm, diary herd, dairy plant, and retail stores (Dari-Mart) where they sell their products. Almost all of their milk is consumed within 40 miles of the farm (where they also grow a large diversity of crops, including feed for the cows, mint, blueberries and hazelnuts). The ecological and social benefits of this are enormous, and an essential model for how our food supply can become more sustainable. Lochmead was also one of the first dairies in the region to take a public stand against rBgh and the routine use of antibiotics. And in an age of corporate consolidation of the food industry, they remain an entirely family-owned and operated business that provides employment to hundreds of people in the region. Many of their staff have been with the company for decades.


    * Because Lochmead had already been making vegan frozen desserts for nearly 20 years, they had developed all the procedures and protocols necessary to prevent the contamination of our products with dairy residues. They have dedicated dairy-free days in the plant, and all of the equipment is cleaned, sanitized, and tested to ensure the absence of dairy residues before it is used to make Coconut Bliss. In addition, the organic and kosher certifications, which include annual inspections, require that effective procedures are in place to avoid the possibility of accidental cross-contamination with non-organic or dairy ingredients (since our product is pareve).

As our company continued to grow, Luna and I noticed the quality of our lives declining. While we started our company because we loved making food and feeding people, we were now spending our days in an office, dealing with finances, production schedules, forecasting, problem solving, and managing our growing staff. I would often wake in the middle of the night worrying about any of a myriad of things. It was clear that this was not what we really wanted to be doing with our lives, and that we had gotten far away from the daily pleasure of making food with our own hands, so we started looking for a way that we could move on. The pattern in the natural and organic foods industry has been for companies to reach a certain level of success and then be acquired by a large corporation. Seeds of Change was purchased by Mars, Dagoba was purchased by Hershey, General Mills owns Cascadian Farm and Muir Glen, and the list goes on and on (see this link for more info: https://www.msu.edu/~howardp/organicindustry.html). While we had been approached by a large corporation and several private equity firms, Luna and I felt dedicated to finding a way for Coconut Bliss to stay independent and locally based here in Oregon. We had heard too many stories of people who sold their companies to big corporations, hopefully believing the corporation's promises to uphold the quality and integrity of their products and their companies, only to be eventually disappointed when financial considerations trumped values and corners got cut. We couldn't quite get ourselves to buy into the "trickle up" theory--the idea that the values of the small companies that get acquired will inspire the parent corporations to start cleaning up their acts.


So we started thinking about Lochmead again. They were a 50+ year old business, deeply rooted in the local community, and they weren't going anywhere. The Gibson family had successfully done what most family businesses fail at--keeping the third generation involved. While they were very successful, and have always run profitably, they have succeeded because they value sustainability over profitability. And as their priority was long term sustainability, we believed that it would make sense for them to own Coconut Bliss so that they could be assured of keeping the staff at their ice cream plant working--an important value to them. They had recently discovered how vulnerable they are when they lost Turtle Mountain after nearly 20 years because Turtle Mountain built their own plant.


Luna and I feel great about our choice. We are still involved in the company, our entire staff are staying on to continue running it, and we have complete confidence that the quality and integrity of Coconut Bliss will not be compromised (we expect these, in fact, that it will keep getting better). And when Luna and I sit with Jock Gibson we feel a deep awe and appreciation for the rootedness in place and community that he embodies, and that we, as grandchidren of immigrants, can barely imagine. We feel grateful to be able to learn this from him and his family, and blessed that they are embracing our values as well.


If you have any more questions or concerns, please feel free to contact me.


Blissfully yours,

~Larry

 

PS: We want the conversation to continue. Please leave a comment below if you feel so inclined.

 


 


When I was in California for

When I was in California for vacations this year, I finally had Coconut Bliss. It is awesome! I wish I could have it more often. So, my question really is: When will you start selling it in Germany?? <3

In good time!

Hey Jerusha, Glad you were able to give us a try on Vacation. Right now we have our hands full with the US & Canada and it will be a few years before we think about our next expansion.

Keep up the good work Luna and Larry!

Thank you for posting this explanation, Larry. Most consumers do not know what it takes to create a successful business, especially in the food industry. The good news is, with products such as yours converting new people to veganism every day, soon there will be more vegan factories available to make even more vegan products in the future. And then even more people will become vegan and less animals will suffer. It is a win-win! And I'll bet once traditional factories realize working with vegan ingredients is less hazardous than animal products as far as food-borne illness is concerned, even more will be open to change. :)))

Coconut Bliss is awesome, and

Coconut Bliss is awesome, and if you had not joined up with Lochmead I would never have had the chance to taste it in Canada. I like it better than dairy icecream and I am not vegan or lactose intolerant. Although many people are upset about the sale to the dairy, which I understand on one hand, I think the best way to stop people from consuming animal products is to widely offer vegan ones. I love Bliss and would choose it over the dairy option any time it was available. It's important to stay availiable to as many people as you can. I think you have made the right decision. I've told everyone I know about coconut bliss.

THANK YOU for getting Coconut Bliss across the country!

If it were not for Coconut Bliss my family could not have ice cream at all! We have to avoid gluten, dairy, soy, all artificials, salicylates(which occur naturally in certain fruits and vegetables) as well as limiting refined sugars. So my family and I say THANK YOU for making Coconut Bliss and THANK YOU for finding a way to make it available across the country. Living in a smaller city we would have to pay HUGE shipping costs OR drive for four hours to get the foods that we need but thanks to companies like Coconut Bliss our little local organic grocery can provide delicious organic foods. So again THANK YOU!

Where are the comments?

I left a comment here last week, but it has not posted—nor have any additional comments beyond the ones that were already here. Just wondering if you've closed the dialog, or if you're picking and choosing which comments you're posting, or if I should keep checking back to see if my comment eventually appears? Thanks!

comment delay...

I've been away at our Expo East convention in LA, so sorry about the delay. By the way-- we delete no comments...we only delete spam from poker and pharmacy websites! :)

Seriously, though, this discussion is important. And we appreciate all of your opinions. Thank you. :) -Vince


This letter raises more questions...

Dear Larry and Luna, I was so confused when I saw the first news story of the sale to the dairy. I was glad when someone linked to this letter as I hoped it would offer a reasonable explanation for why a beloved company, making a beloved vegan ice cream, would sell out to a dairy. As a small business owner I can relate to your struggles around growth and the unhappy changes in your daily life. I feel for you on both counts. And while I know that many vegan food products are brought to market by non-vegan corporate conglomerates, Coconut Bliss wasn't one of those products when I started buying it. Each time I've become aware of a conglomerate takeover and/or vegan products being made by companies that profit from animal exploitation, I stopped buying those products and looked for alternatives instead. Of course, you knew that some of your customers would be inclined to do the same after your sale to Lochmead. You wrote the letter for that very reason. Surely you understand the confusion and feelings of betrayal your former customers are expressing here. You know how strongly vegans, once awake to the cruelty inherent in dairy production, feel about abstaining from supporting any company that profits from the exploitation of innocent beings. I don't think there's reason for nasty comments, but I do think it's reasonable for once-happy customers to express their disappointment and disgust. I hope that your version of how this will work bears out. I hope that having that factory dedicated to producing non-dairy products on certain days will eventually mean that they produce less dairy-based product. I don't honestly think that will happen, but it would be swell if it did. In closing there are two questions I'd like to ask. The first is, did you consider reaching out to the vegan community to do fund raising for your expansion? There are comments here from folks saying that unless "we" were willing to put up capital, we should shut up. Of course, I'm pretty certain that "we" were never given that option. It's a shame, because I do believe it could have been a trailblazing first, and might have been wildly successful—especially if people knew it would mean the difference between keeping CB all vegan or having it produced by a dairy. The other question is, you say at the end of your letter that Lochmead suffered financially when they lost Turtle Mountain because TM built their own production facility. Earlier in the letter, you said only dairies had the production facilities necessary to meet the demands CB was experiencing. Was working with Turtle Mountain at their facility ever considered? They have an entirely dairy-free facility and are located in Oregon. It seems working with/selling out to them would have been more favorable than giving your dairy-free product over to a suffering dairy that now gets to use your vegan product to bolster their flagging dairy operation.

I'm surprised at how many

I'm surprised at how many mixed feelings there are within the vegan crowd, and more surprised at how many people are vilifying Coconut Bliss for this decision. I'm sure there are tons of vegan products that would not be available to us, were it not for larger non-vegan companies that owned them. There is not enough demand for a lot vegan products to merit their own production facilities, but too much demand for any one family business to handle. Obviously associating with nonvegan companies is not ideal, but as other commenters have said, we don't live in a vacuum, and running a business takes a lot of work, money, and space. I would not want to buy a product that came at the expense of the Bliss family's and team's wellbeing anymore than I would want to buy one that is associated with animal suffering. Other commenters are right when they say that it's great that you have taken steps to expand your operation, and to spread the joy of vegan friendly treats like Coconut Bliss. Your ice cream has made transitioning to veganism awesomely fun for my parents, and at vegan cooking classes, no one can stop talking about it. I hope you know that we will continue to enjoy it!

Couldn't agree more!

Couldn't agree more!