Recipient of 2004 USDA Value Added Producer grant.
The Kilby family turned a commitment to dairying, community and quality into a delicious value-added business. Kilby Cream opened for business in 2005 on a Kilby farm near Rising Sun, Maryland. Their focus is premium ice cream, “From cow to cone in two days.” The ice cream is very creamy, natural, great tasting – just like homemade, because it is! They use no BST hormones with their cows and no preservatives in the ice cream. It is an indulgent treat.
The Kilby family had been dairying in the region for over 100 years, settling on the present farm in the 1960s. They milk 500 cows and produce 38,000 pounds of milk per day. The family owns two businesses. Kilby, Inc. is the milk production business and Kilby Cream is the retail ice cream business. Kilby Cream is run by a team of Kilby women: Phyllis keeps the books and continues her tradition of being on many boards and committees in the community, daughter-in-law Lisa makes the ice cream and runs the shops, and her daughter Megan does marketing and organizes events. Five part-time employees help in the shops.
The on-farm store was built as a production facility and retail outlet. High butterfat milk comes in from the dairy next door and cream, sugar and their own ice cream powder is added. It is then pasteurized and chilled overnight. Flavors are added the next day and it’s ready to go. Kilby Cream buys fresh fruit from local orchards for local flavor and variety. Some of their ingenious flavors are “Fear the Turtle,” “Moo-licious,” “Udderly Chocolate” and “Cow Dough.” At any given time, they have about twenty flavors, some that change with the seasons.
The entire store uses the cow and barn motif, from the ceiling tiles to the barn door serving area. A local carpenter crafted the order counter to their specifications.
Outside, a tall silo sports a giant ice cream cone, guiding the way to the farm. A small group of animals is housed 100 foot from the retail store, for customers to pet and observe. The 500 cows that produce the milk for the ice cream are housed on another family farm several miles away, lessening the smell and liability.
A children’s garden, whimsical play area and picnic spot invite local families to come and spend time at the farm. Mothers with young children and home-schooling families come to the farm to spend the morning and have lunch at the store. Local school children come to the farm for field trips, and Kilby Cream supplies the school with incentive coupons for good grades and attendance prizes. Local 4-H groups meet at the store and have functions there, such as displaying their projects before fair time. Birthday parties for young and old are held at Kilby’s. In the fall, they have a pumpkin patch and corn maze, and they host bonfires and hay rack rides.
Their target audience is families in a 50-mile radius of their shops (They have two shops: the on-farm one near Rising Sun and another in Chesapeake City.), but they specialize in school age children. They are part of many community celebrations with the presence of their Moo Mobile, which doubles as a distribution and serving vehicle. The Moo Mobile provides an additional service to their customers, as they can be hired to attend parties, weddings and other events to serve ice cream.
They also distribute ice cream to eight other retail restaurants, cafes and ice cream shops. Hand-packed pints and quarts are sold out of the on-farm shop and at the farmers' market, but not wholesale.
Says Phyllis, “As far as our customers go, we will do anything they want. We are very customer friendly and especially family friendly, but really the most important thing we have going is the quality product.”
Phyllis said her favorite part of the ice cream business is simply meeting with customers. “I don’t make the ice cream, but oftentimes I’m out front dipping it,” she said. “There’s something about standing behind that ice cream cabinet … it’s a very positive experience. It recreates memories for everyone.” Building on those positive experiences is the key for this family business. Says Lisa, “We work really hard, but we also have the benefit of seeing the customers enjoying our product. That keeps us motivated to create new flavors and fun events.”
The Kilby’s collect e-mails from their customers and send periodic e-mails to keep customers updated on current flavors, contests and events at the farm. They have a monthly contest for customers to make up new flavors and name them. Relationship marketing works in their favor, because customers like to try out the new flavor that their neighbor or friend invented. They have a resident milk cow, Mini-Moo, who had twins this spring. It became a community event, with many customers coming out to see the twin calves and follow their progress.
Value Added Grant
The Value Added Ag grant went very smoothly for them. It paid for advertising, start-up salary and the computer system. The grant gave them the edge they needed, not only financially but also with support and opportunities. Marlene Elliot Brown, their regional USDA director, was supportive and helpful during the process. “They were as excited about the grant as we were,” said Phyllis. The Kilby’s already kept good records, which helped when reports were due. They had a solid business plan, but also believe a business plan should be rewritten every five years. As the business changes and grows, the business plan maintains focus and helps the team to make good decisions.
Premium products may face a challenge in a slowing economy, but it hasn’t hurt Kilby Cream sales. They believe the slowing economy has even helped them, because it’s a treat a family can have without spending very much and they don’t have to drive far. It is cheaper than a movie!
Dairy farms have their own set of challenges. New EPA regulations will require an upgrade in their lagoon system. The Kilby’ see that as an opportunity to install a methane digester. They received a USDA grant for the digester. A consultant was used to apply for the digester grant because of the technical nature.
The next step for the business is to start their own bottling line. They plan to bottle milk in glass jars and distribute to the door. They plan to add enough value that they can cut the size of their milking herd to 250 cows and still sustain the family members in the business.
To do this, they will have to increase the amount of money that each of their customers now spends on their products. With the addition of home-delivered milk, they will have many more contacts per week with each customer in their community, resulting in additional ice cream sales.
Kilby Cream ice cream is quickly becoming an institution in Maryland. Their premium ice cream was recently featured in the July/August issue of “Maryland Life” with several other small creameries. The title of the article was “Good Chill Hunting – Your Search for the Perfect Scoop Ends Here.”
About USDA VAPG
VAPG funding has been offered by the USDA periodically since the early 2000s. A new round of funding is anticipated to be announced in the coming months. To be considered value added, projects must show how products are differentiated in specific ways from commodity crops. Typically, projects must also show how they may deliver greater returns to producers.
Independent producers, farmer or rancher cooperatives, agricultural producer groups, and producer-owned business ventures, including non-profit organizations, may apply. In previous cycles, applicants were required to be producers of the raw commodity who will maintain ownership of that commodity through the process of creating a value-added product. Grants have been available for planning projects (such as marketing and business plans and feasibility studies) and working capital projects (which might include wages or packaging supplies). (http://www.rd.usda.gov/)