DAIRY PARTNERSHIPS BRING PROFITS

LUCY SAUNDERS

COVINGTON, Tenn. -- Strong partnerships between suppliers and retailers are extremely important in running any successful business, but a partnership that spans four generations? That's more like a marriage. And in the Internet era, when businesses change monthly, even daily, Turner Dairy is a rarity -- a dairy that continues to be profitable for decades, even through periods of commodity price pressures.

Headquartered in a lush, rural area north of Memphis, Turner Dairy Holdings LLC is comprised of three dairy processing facilities and 16 distribution centers in Tennessee, Kentucky, Mississippi, Arkansas and Missouri. Beyond fluid milk -- the mainstay of the business since Turner was founded in the early 1900s -- products include ice cream, cultured dairy, and flavored milks.

"The Turner name is exceptionally well regarded," said Molly Murphy, marketing director of Quality Chekd, a member-owned dairy cooperative whose combined 1998 sales of nearly $3 billion make it one of the largest dairy brands in North America, with member companies in the United States, Canada, Colombia and Mexico.

Since Turner Dairies joined Quality Chekd in 1959, its recognition has grown, according to Ed Fleming, the corporate sales director of Turner Dairies. Co-president Steve Turner estimates that the family-owned company's sales have tripled in the last 12 years. Steve, and his brother Jim, share presidency of the company, which posted a sales increase of $3.2 million last year.

Turner Dairies profits in part from the training and marketing expertise of Quality Chekd, which offers services such as promotion assistance, independent laboratory analysis, quality sampling, product formulation and plant layout, MIS staff to help with billing and systems, and more. There's even a training department, informally known as "Cow Tech" to conduct food-safety training and herd management, that's considered unique for the industry.

"Last month, we used Turner Dairies as the focal point for a POS campaign for cultured products," said Murphy. "Quality Chekd developed posters, shelf-talkers, danglers, floor prints and other POS items, featuring both the Turner name and our logo. Consumer association of Turner with product quality was almost 100%, according to our surveys of more than 300 consumers. And sales increased by more than 8% in one market, as a result."

According to retailers, however, the strong sales at Turner Dairies are not merely the result of promotions, but the result of decades of customer service. The operation has cultivated a working relationship with the Naifeh Grocery, a 90-year old grocery store which is a legend in the Covington area, practically since the inception of bottled milk. According to Joe Naifeh, owner and member of the family's third generation of retailers, "my father had the first bottled milk in Covington and Turner was one of the first dairies to supply it to us. We had to keep the inventory in back to stay cold, so every time a customer wanted a bottle of milk, we went and got it on request." Sales of Turner milk grew from a single display to almost fill a 64-linear-foot dairy case, with about 30 facings of gallons of milk and 50 facings of half-gallons and quarts.

"As far as Turner's products are concerned, Covington is the home to the dairy, and people accept it as the quality product and trust the name," says Naifeh. "As far as we are concerned, they're one of our top suppliers. Turner is willing to run co-op ads and demo products any time we ask." More than 50% of the frozen dairy and ice creams that Naifeh's Grocer stocks are from Turners.

Naifeh added that the real growth for Turner Dairies began with the affiliation with Quality Chekd.

"But it is the type of people that Turner's employs that also makes a difference, he said. "The dedication of everyone who works there says a lot about the organization."

All of the retailers interviewed by SN cited the extra assistance they have received from Turner Dairies over the years. "When we had a refrigerated case fail, the dairy sent out a refrigerated truck, to hold our cold dairy inventory safely until we got our repairs finished," said Joey Hayes, owner of three stores bearing his name. "They came to our rescue, and saved the contents of our whole chilled case, not just their brands."

Joey Hayes' stores range in size from 12,000 to 16,000 square feet, with dairy cases ranging in size from 35 to 40 linear feet. Turner brands fill about 20% of the case, though they generate close to 50% of the section's sales.

"Fluid milk is the biggest seller," said Hayes, noting that Turner gets a lot of consumer recognition from the yellow jugs that it uses to package its milk. Dairy products generate about 11% of total-store sales, "so it's a healthy section for us."

EW James & Sons, a 23-unit chain operating in Tennessee and Kentucky, conducts frequent dairy promotions with Turner. "Turner chocolate milk is really a high-quality flavored milk," said David James, Sr., company president. "We just completed a chocolate milk promotion in 20 of our 23 units that propelled sales up by 110% for the month."

A giveaway for "chocolate mountain bikes," children's bicycles imprinted with a chocolate-milk script logo, helped generate consumer traffic. "Turner and Quality Chekd supported the promotion with all kinds of POP materials, posters, and even the giveaways," said James, adding that Turner's is helping set up the whole dairy section in the chain's new 50,000-square-foot store.