Dean Foods employee David Skou talks with plant manager Joe Leedom while operating a machine that pours milk into gallon jugs. All 114 milk plant workers made the transition from Wells' Dairy ownership to Dean Foods. [Click to enlarge]

In an industry aiming for smooth and creamy, Dean Foods is sharpening up its competitive edge for the Le Mars dairy plant.

The nation's largest dairy producer purchased the local plant from Wells' Dairy in January. Now, with the transition complete, Dean Foods leaders are looking to grow the plant in a competitive market.

Dean Foods leaders are optimistic about the capability, location and employees at the fluid and culture dairy plant in Le Mars. This plant is the corporation's first in Iowa. [Click to enlarge]

"We have a lot of capacity right now and we're actively looking at what we can do to improve that," said Joe Leedom, plant manager. "The sales force is out identifying potential customers we would want to work with. We'll do that first, before we think about any kind of physical expansion."

The plant currently delivers to the Sioux Falls, Sioux City and Omaha areas, as well as northwest Iowa and southwest Minnesota. Now company leaders are looking to the east to establish some routes, Leedom said.

If buyers snap up the offer, production at the plant could be brought up a notch.

"We're at a four-day work week right now. We want to be up to that five-day, five-and-a-half day week on our production lines," Leedom said.

Dean Foods has not purchased any land around the plant for expansion at this point, he noted.

Dean Foods leaders, he added, are optimistic about what the Le Mars facility can add to their corporation, which already delivers to 43 states.

"They did not have a plant in Iowa and they did not have a plant of this caliber," Leedom said.

It's location -- in the middle of the U.S. -- is ideal both for receiving raw material and delivering product.

The plant is also close to Dean Foods' Sioux Falls plant, which produces some similar products.

"What we've been working with on Sioux Falls is to take a look at efficiencies on our lines. They're looking at theirs; we're looking at ours," Leedom said. "We're trying to team up to get the best efficiencies for specific products as we can."

Efficiency is especially valuable right now, when the dairy industry is a tight market.

Fluid milk consumption, Leedom said, is not growing.

"The price of raw milk doesn't help much," he added. "People are more likely to pick something else up -- pop, water, juice."

That means Dean Foods and other dairy companies are competing for a limited pool of customers.

"Dean Foods is very focused on fluid dairy and cultured operations," Leedom said. "When we were Wells' we were a fluid/culture operation and an ice cream company, and so while that worked, there's some more opportunity if you really focus on (fluid and cultured dairy)."

Leedom said Dean Foods leaders were excited not only about the quality and location of the facility, but also the employees at the Le Mars plant.

All 114 employees in the plant made the switch from Wells' to Dean Foods, plus drivers and salespeople.

"One day we were Wells' and the next we were Dean Foods," Leedom said.

The transition was a little more complex than just that.

Leedom said it was a "huge task" to move the whole group of employees to a new benefit structure. While it wasn't completely seamless, he thinks they're smoothing out the issues they did have.

"The mentality of the employees has really been very great," Leedom said. "We have a very good group of dedicated senior employees."

Hourly workers still are represented by a labor organization -- the United Dairy Workers of Le Mars.

"They're the same represented group that works at the ice cream plants -- they're just another chapter of the labor group," Leedom explained

A similar labor agreement is still intact for production workers, cooler workers and drivers, he added.

That contract, like the Wells' Dairy hourly workers' labor contract, expires at the end of this year.

"I think there's some things we really want to take a look at and see if we can make some improvements," Leedom said. "And obviously there might be some things we want to discuss with employees to see if it truly is a benefit to keep."

For the first 90 days after the purchase, Wells' Dairy offered support for the milk plant to help ease the transition.

"Since April 1, we've been on our own -- Dean Foods internal systems, policies, procedures," Leedom said. "It's really like starting up a new business. We had to get used to things we were not used to doing, like purchasing."

Wells' Dairy's corporate office used to handle that for the milk operation.

Blue Bunny milk and products will keep coming out of the plant, at least for a few years. Dean Foods has a trademark agreement with Wells' Dairy for two years.

The plant also produces for private labels like Fareway, Land O' Lakes and A&W.

"Last year at this time Old Home cottage cheese was voted the best cottage cheese in the United States," Leedom said.

Each label has a unique formula and recipe, he noted.

About half the raw milk for the Le Mars plant comes from independent farms, with about 40 percent of that local milk. Other raw product is drawn from independent farms in northeast Nebraska. The other half comes from area co-operatives like the AMPI based in the Sibley area.

Dean Foods leaders plan to continue the plant's community involvement.

"We're trying to keep as much of our purchasing local as we can," Leedom said.

Dean Foods also takes requests for donations. They may donate product or money to purchase product.

"We want to be a good corporate sponsor for the Le Mars community," Leedom said.