While Northeast Dairy Supplier Member member Byrne Dairy isn’t celebrating a milestone anniversary this year, it is currently undergoing a major expansion at its Dewitt, New York, facility focusing on aseptic production. This is yet another step in the growth of the company that dates back to the 1930s. The following outlines the road to how it all began and how, today, it is on track to have the ability to distribute its products not only around the nation but eventually around the world.
The 1930s: The Founding of a Dairy Operation
In 1917, at the age of 32, Matthew V. Byrne started his first business as a tire distributor for the Miller Rubber Company. Three short years later, the United States experienced a period of unbridled economic prosperity, which allowed Matthew to build the Byrne Square Building in Downtown Syracuse, New York, which he used to conduct the business of the Miller Rubber Company.
During the roaring ‘20s, Matthew’s business thrived and became one of the finest automobile service operations in the nation. However, in October of 1929, it was all over. That month, the stock market crashed, which was the first sign of the Great Depression.
The Miller Rubber Company folded shortly thereafter, leaving Matthew unemployed and without work. Banks began mortgage foreclosures on his home and office buildings. Fortunately, the New York State Legislature stepped in and placed a moratorium on those foreclosures, which saved Matthew’s home and office buildings.
To provide for his family, Matthew tried selling traffic control devices to various town and village governments in and around Onondaga County, New York. On more than one occasion, he also tried to promote professional boxing matches to make money.
Considering his future, Matthew said he wanted to become involved in a business that had several basic elements. First, it must be a food product. Second, it must be a food product that is consumed on a regular, consistent basis, and, finally, payments must be made on a cash basis rather than by accounts receivable or over a period of time.
In 1932, at the age of 47 and amid a major economic downturn, Matthew borrowed money from family and friends to start a dairy bottling operation out of the Byrne Square Building. At that time, there was no shortage of dairy bottling operations. In fact, by some accounts, there were as many as 36 dairy bottling operations in the county alone, most of which were distinguished from one another either by the name of the farm or the surname of the processor.
Matthew’s company, of course, was no different. On Feb. 2, 1933, Matthew filed articles of incorporation for Byrne Dairy, Inc., a day which is now recognized and celebrated by the company and its employees as Founders Day.
The 1940s: When Byrne Became a Family-Owned and Operated Dairy Business
It wasn’t until 1946 that Byrne truly became a family-owned and operated business. That year, Matthew handed the keys of the operation over to his three sons: Jack, Bill and Vincent.
While Matthew remained the president, Jack became general manager, Bill was responsible for plant operations and Vincent handled sales and distribution.
By the end of the 1940s, the family business was thriving, and the decision was made in November 1948 to leave behind the Byrne Square Building in favor of a larger, more suitable location at 240 Oneida St. in downtown Syracuse.
The 1950S & 1960s: Byrne’s Successful Foray into the Retail Industry
In 1954, Byrne acquired the McMahon Dairy, which made Byrne the third-largest dairy business in Central New York at the time.
That year marked a watershed moment for the family business for a different reason, however. As the company began to understand the consequences of the movement of families from the city to the suburbs, it decided to build its first dairy store located in Central Square, New York, and the decision was made to move in the direction of marketing its dairy products through the ownership of those stores.
The early store locations were primarily known as “dairy stores” rather than “convenience stores” because they offered customers the opportunity to purchase a small number of Byrne branded dairy products rather than a large array of goods.
As the stores grew in number and popularity, Byrne began offering customers a greater variety of goods and services. Today, many of Byrne’s retail locations may be described as “expanded” or even “hyper” convenience stores in that they offer consumers the widest possible array of goods and services among convenience stores in the industry.
The 1960s & 1970s: The End of Home Milk Deliveries and Expansion of Retail Operation
Throughout the 1960s, Byrne operated four convenience stores, as management remained attentive to its manufacturing operation and home milk delivery services. But that all changed in the 1970s when many dairy processors discontinued home milk delivery services for a variety of reasons, including the increasingly mobile lifestyle of Americans, home refrigeration, extended shelf-life of dairy products and better merchandising at grocery stores.
The first survey from the Department of Agriculture on home milk delivery services was conducted in 1963, when nearly 30% of Americans were still receiving such services. By 1975, the percentage of Americans receiving home milk deliveries dropped to just 6.9% of total sales.
It wasn’t until 1977 that Byrne discontinued its home milk delivery services, and it prided itself on being the last local dairy to do so. While Byrne was one of the last remaining holdouts, it was also well positioned to meet the challenges ahead because it had allocated significant resources to its retail division in the years prior.
By the end of the 1970s, Byrne had opened 13 new store locations, more than tripling the size of its retail division. To remain competitive in its core business, the company began offering milk in diverse flavors such as strawberry, banana, and (the now famous) Irish Mint Milk®. Finally, rather than selling off surplus cream generated at its Oneida Street plant, the company decided to use excess cream to manufacture its own line of ice cream and butter products, which were sold at its growing number of dairy stores.
The 1980s: Repeal of Restrictive Trade Barriers and Promotion of Competition
Throughout the 1980s, Byrne fought aggressively to increase its milk sales through the expansion of its dairy store locations, but this was no easy task for the historical reasons below.
For much of its history, New York State has had a public policy of assuring an abundant supply of milk to its residents. Acting under its policy purview, and, for more than 50 years, New York State was permitted to regulate the sale of milk on a county-by-county basis pursuant to a licensing scheme set forth in New York’s Agriculture and Markets Law.
Under this licensing scheme, any business seeking to sell milk in the state had to apply to the Department of Agriculture and Markets for a license to sell milk in a different county. The commissioner of agriculture and markets had the ability to deny any license if he or she found that its issuance would be a source of destructive competition in a market already adequately served, or, if it was deemed to not be in the interest of the public.
For the better part of 50 years, the “destructive competition” clause had the effect of preventing many milk dealers, such as Byrne, who sold milk in one county from selling milk in another county. The rationale for denying Byrne and others a license to sell milk in a different county was typically that a particular market was already adequately served.
The federal ruling in Farmland Dairies v. Com’r of N.Y. Dept. of Ag., 650 F.Supp. 939 (1987), found that the “destructive competition” clause violated the commerce clause of the United States Constitution. After this ruling, out-of-state companies were permitted to enter the New York market. However, the federal ruling did not address existing barriers faced by in-state companies that were still required to obtain licenses to operate across county lines.
Simply put, the in-state problem required a state solution. And it wasn’t until the passage of state legislation, which largely took effect on April 1, 1988, that the “destructive competition” clause would be repealed altogether, followed a year later by the repeal of a number of restrictive provisions found in the Dairy Trade Practices Act.
The repeal of this legislation bolstered Byrne’s growth strategy. In 1988, Byrne enlarged and updated its Oneida Street plant, which increased throughput by 25% in order to accommodate the expanding number of dairy stores, which totaled 46 by the end of the 1980s.
The 1990s: Large Retailers Dominate the Grocery Landscape
By the time 1990 rolled around, the American landscape had, once again, changed, which presented a whole new series of challenges for the Byrne family business.
In the early 1990s, it became clear that Walmart and other large retailers had redefined convenience and one-stop shopping. For instance, in the early 1990s, Walmart had become the number one retailer in the nation. By the end of the 1990s, Walmart had grown to not only be the largest private employer in the nation, but the entire world.
Throughout much of the 1990s, Byrne remained preoccupied with manufacturing its own brand of dairy products, the vast majority (80%) of which were still sold at its dairy stores.
But, by the end of the 1990s, the Byrne family could not avoid certain realities: fewer Americans than ever were consuming milk on a regular basis, and a growing number of Americans were no longer frequenting mom-and-pop establishments for food staples such as milk.
Accordingly, the Byrne family decided the only way to boost its sales was to expand its territory and get into the larger retail locations, such as Walmart, that were beginning to dot the American landscape. But, there was one glaring problem: Byrne’s Oneida Street plant lacked the technological capability to ship finished good inventory outside a 50 to 100 mile radius because its dairy products only remained fresh for an 18 to 20 day period.
THE 2000s: Byrne’s Foray into Extended Shelf Life Milk Production
In 2003, after years of careful planning and consideration, the Byrne family invested $13 million to build a 40,000-square-foot Ultra High Temperature pasteurization facility in DeWitt, New York, which the company aptly named “Ultra Dairy.”
At the time of construction, it was one of the first family-owned and operated UHT facilities in the country. The bricks and mortar construction was fairly routine, but outfitting the plant with new equipment was an entirely new venture. It required highly technical equipment, including UHT sterilizers, aseptically design tanks and process piping, Extended Shelf Life filling equipment designed to commercially sterilize and fill containers, specially designed production environments to satisfy “clean room” requirements, and — to top it all off — a highly sophisticated staff of exempt and non-exempt employees to make the whole thing work.
In most simple of terms, the UHT process involves exposing raw product, such as milk, to powerful heat treatment (>280 F) so that all microorganisms and heat-resistant enzymes are inactivated. As a result of the raw product undergoing such heat treatment, and the processed product being filled into commercially sterile containers, the finished product may be stored for longer periods of time (70 to 180 days) when compared to more antiquated heat treatment and packaging technologies, such as those used at Byrne’s Oneida Street plant (18 to 20 days).
The investment in UHT technology opened up the entire country to Byrne, as it now had the ability to ship and distribute its products over longer distances and wider geographic areas. This allowed Byrne to enter new markets and engage with new customers. Indeed, within the first few years of operation, Byrne transitioned from a small regional dairy that largely made products for its own dairy stores, to stocking hundreds of major retailers throughout the nation.
Over the following years, Byrne continued to make substantial investments in its DeWitt facility. For instance, in 2008, Byrne invested $9.5 million to more than double the size of its DeWitt facility from 40,000-square-feet to 86,000-square-feet. And, from 2009 to 2013, Byrne invested another $20 million to outfit the newly acquired space with state-of-the-art processing and packaging equipment, which allowed the facility to nearly triple its productivity and output.
In 2018, the company began its third major expansion of the DeWitt facility, which included a $28 million investment to build a 38,400-square-foot expansion of the building, allowing the extension of existing production lines for enhanced efficiencies, the addition of new processing and packaging equipment and a larger cooler space to store and move finished good inventory.
In December of 2019, the company sold its Oneida Street plant, which had a proud history spanning 71 years of successful operation. The proceeds from this sale, however, allowed the Byrne family to further invest in its future as a manufacturer of long life beverages.
Present Day Expansion into Aseptic Production
In 2020, as the Byrne family business once again enters a new decade, the world is facing unprecedented challenges in the form of the COVID-19 pandemic, which by most accounts has caused the largest social disruption and economic downturn since the Great Depression.
During this period, Byrne is undergoing its fourth expansion of its DeWitt facility, with the aim of entering an entirely new market within the dairy industry: aseptic production.
The aseptic project, as it is referred to internally, involves a $28.5 million investment to construct a 22,000- square-foot expansion of the DeWitt facility to accommodate new, state-of-the-art aseptic processing and packaging equipment; a 3,600-square-foot expansion for additional office space; 1,165-square-foot expansion for bulk chemical storage; and the addition of three new 60,000 gallon silos for storage of raw milk and cream.
The project will provide Byrne with the ability to make a variety of beverages that can be stored up to 13 months without refrigeration, and it will increase the footprint of the DeWitt facility to nearly 160,000-square- feet, which is quadruple the size of the original 2004 layout.
Carl Byrne, who is a third-generation family member and has served as the company’s president and CEO for the past 14 years, anticipates that the ongoing project will allow the company to not only ship and distribute its products throughout the United States, as it already does, but around the world. “We’re getting into aseptic production because that market is growing, not only in the United States but globally,” he noted.