More than a year after the Smith Creamery dairy plant in Washington Parish was destroyed by an explosion and fire, the company’s milk and cream are still being distributed by Kleinpeter Farms Dairy to the benefit of both companies.
Since July 2011, Kleinpeter has been processing, packaging and distributing Smith Creamery products.
Michelle Hickman, who helped run the creamery, said her parents are continuing to evaluate whether to rebuild the business.
“There is so much economic uncertainty out there, it’s a hard decision,” Hickman said. “But this arrangement is what is best for right now.”
The Smith Creamery operations in Mount Hermon were destroyed in June 2011, after an explosion that fire officials blamed on a leaking propane tank. Kleinpeter rushed in and made an offer to the Smiths: Kleinpeter would process, package and distribute products to the specifications of owner Warren Smith. Smith Creamery milk and cream is pasteurized, but not homogenized.
“We never had any kind of arrangement, just a handshake deal,” said Jeff Kleinpeter, president of Kleinpeter Farms.
Kleinpeter isn’t getting a cut of Smith’s sales, but it is collecting a handling fee, which includes a nominal profit, on each container of milk, cream and half-and-half.
Kleinpeter said the arrangement with Smith Creamery is working out financially for his driver-salesmen. And by having more milk going through the dairy for processing and bottling, the fixed costs for Kleinpeter are dropping.
“The fact that Kleinpeter is helping to keep our products in stores really speaks to who they are,” Hickman said.
The arrangement also has had some benefits for Smith Creamery. Thanks to Kleinpeter’s distribution network, they’ve been able to get into more grocery stores, such as Rouses Markets in Lafayette and the Mississippi Gulf Coast.
Kleinpeter said Smith’s sales are “steady, steady,” but there are some opportunities to grow. Some major food distribution companies have shown interest in putting Smith Creamery products in restaurants, he said.
Hickman said the arrangement is evaluated every six months.
“This is two families trying to work together to survive and use Louisiana products,” she said.