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Ryan Foods Becomes a Major Player in the Grocery Business
While Boosting the Local Dairy Industry

by Aaron W. Hughey

The future of the dairy industry is in plastics.

Ryan Foods began producing milk drinks in plastic bottles in March 1999. It now supplies grocery stores and supermarkets in 35 states.

In fact, Dean Foods, Ryan Foods’ parent company, is spending over fifty million dollars on the plastic container production facilities in Murray, Kentucky.

The market for milk products in plastic containers has grown tremendously in the last three years.

Lori Scott, packing superintendent, has seen many changes since she started with the company in December of 1997.
“When I came here, we had five paper lines,” Scott recalls. “We didn’t have any plastic lines.”

This growth has been good for Ryan Foods, which more than doubled its workforce at its Murray facility. Ryan Foods now has over 300 employees.

It has also been good for local dairy farmers, who now supply most of the milk for the products that go into those plastic containers.

“It’s made available a local outlet for milk,” says Jimmie Hale, a local dairy farmer. “I used to haul milk as far as 90 miles away. It’s a class plant with good prices and it’s 12 miles from home.”

Hale is one of Ryan’s largest milk suppliers; he has 600 cows that produce an average of 48,000 pounds of milk every other day. The arrangement with Ryan Foods has helped add financial stability to his business.

Ryan Foods purchases over 415,000 gallons of milk weekly from dairy farmers in the region. Customers even include smaller Amish and Mennonite producers in Christian County.

Ryan primarily uses Class 1 milk, which costs quite a bit more than Class 2 milk. Class 1 milk is used for products such as NesQuik drinks, while Class 2 milk is used in other products, including cheese.

“We’re really excited about our success with our producers,” David Garrison, operations manager for the Ryan facility, notes. “I see tremendous advantages with our current arrangement with dairy farmers in the area.”

Ryan Foods is an outgrowth of the Ryan Milk Company, which was formed 72 years ago by Joe Ryan. In 1986, Ryan Foods was acquired by Dean Foods, which is the second largest dairy foods company in the nation.

Garrison’s father became a manager for Ryan Foods in 1956; he subsequently moved up the corporate ladder to become president and CEO. During his tenure at the company, he made several innovations, including the implementation of more efficient equipment and a more aggressive marketing strategy - a strategy that accentuated the quality of the company’s dairy products.

That strategy continues today with the arrangement that Ryan Foods has with local dairy farmers.

With the rapid increase in the plastic bottle market for milk and other dairy products, Ryan has added more than a hundred independent suppliers since 1997. Prior to that time, Ryan was buying only from large cooperatives, often as far away as Mexico.

“You have to have the systems, the technology and skilled people at the level where you can service a Kroger or a Walmart,” Garrison continues.

Ryan Foods is also on the leading edge of technology in the industry. Recently, for example, they upgraded to a bar-code system which allows them to track sales more accurately.

“We can now re-stock stores before they sell out,” Garrison notes.

Moreover, it has created a demand for more educated workers. None of the older, paper container lines are computerized; all of the plastic lines are.

Garrison adds that this shift has caused a fundamental change in the way Ryan Foods looks at employees.

“With the way technology is changing, you’re going to be retraining until you retire,” Garrison explains.

As has been the case with many industries, Ryan Foods has moved from having a small customer base to having fewer but larger customers to serve.

“Walmart didn’t used to be in the grocery business at all,” Garrison observes. “Now they are one of the top customers of Dean Foods.”
As for the future, Garrison is very optimistic.

“We are the right company in the right location at the right time,” Garrison concludes. “With the strong support of the community and our local suppliers, I think we’ll continue to grow and expand.”