For most of the past year, people and organizations have been faced with extreme challenges and forced to adapt. For many, leaning on communities has helped them navigate the difficult times, including Cabot Creamery. Cabot is a dairy co-operative based in Vermont with 800 farms throughout New England and in New York. It’s diversified ownership structure ensures it operates with a stakeholder focus and creates an interdependent community within the company, which has also proven to increase the company’s resilience throughout the continuing global pandemic.
As the pandemic broke out, the dairy industry faced an unprecedented challenge: Distribution was upended, with farmers and their cows producing milk but the processing plants, distribution outlets, and customers (grocery stores and restaurants) were facing closures and limited activity. Without people able to go to work or shop, what could farmers do with a perishable product like milk? By leaning into its cooperative structure, Cabot was able to stay open, keep employees healthy and keep farmers in business.
“There’s definitely an interdependent relationship that’s very positive,” said Bill Beaton, the recently appointed CEO of Cabot. “One group is looking out for the other. The employees realize the farmers need them to be in there working their hardest, and the farmers understand that these employees are really putting in the extra effort on their behalf as well. Good symbiosis there.”
Cabot is also a Certified B Corporation, a company that has met certain environmental and social standards, which are verified by the nonprofit B Lab. Recently, I interviewed Beaton as part of my research on businesses with a social mission and learned how the cooperative model helped Cabot weather the onset of COVID and the distribution struggles all dairy companies faced and continue to grapple with today.
When the coronavirus came to the U.S., how did you adapt your operations?
Bill Beaton: We’ve been so lucky here, and it wasn’t all luck, but we were fortunate here to not have any COVID cases in any of our plants. And that is really because we got ahead of it so early. We jumped on it in February and early March when no one was even thinking about it.
Early on in the pandemic, when the right thing to do with PPE was to send it to the folks that were caring for people in the hospitals, we still needed masks to keep our employees in the plants safe. So we had large groups of farmers that were making masks in their kitchens at night and then sending them in. It was just incredible. There were a couple groups in upstate New York, where we’d place an order one day, and we’d get 100 masks the next morning. That’s a co-op right there.
We have also obviously completely changed our workflow habits. From the way employees are changing clothes before and after shifts within the plants, and the coordinated flow of employees moving within the facility, we have adjusted hours of operation and staggered their arrival and departure times, we screen people on the way in and wear masks while inside any facility, and we’ve brought in groups to sanitize throughout every shift every day. We also didn’t want to give anyone the feeling that they weren’t going to get paid if they didn’t come to work. If you’ve been exposed, or you think you have, it’d be pretty easy in this pandemic not to tell anyone because you might miss out on a paycheck. But we made it clear to our employees they should do the safe thing and quarantine, and we would support them. During the pandemic, we, if anything, increased production because we had more milk coming in. We never laid anyone off. We hired even more people to cover everything.
Because of those procedures and our commitment to our employees, even when we saw some high levels of the virus within communities, especially the West Springfield area in Massachusetts and upstate Vermont, we did not see any cases in our plants. We’ve had the support of the employees throughout the entire pandemic. Employees have been right there, doing the right thing, wearing their masks. We’ve had no pushback because they knew what we were trying to achieve.
How has your co-operative structure affected your ability to navigate the pandemic?
Beaton: When you’re looking out for the best interests of your employees to keep them healthy and to keep them safe, to reward them as they are trying to feed the world here and at a time when it’s a very scary time to be going into plants, when you’re keeping your focus on them, it has an impact on both sides of the equation, both back to the farms and back to the consumer as well.
One group of farmers put together a video thanking all of the employees, and we had it running up at our Cabot location. It was a whole series of the farmers thanking the employees because we were running round the clock every day of the week, and the farmers really appreciated that because they realized without that, they could be in a real bind.
There’s an interdependent relationship there that’s very positive. One group is looking out for the other. The employees realize the farmers need them to be in there working their hardest, and the farmers understand that these employees are really putting in the extra effort on their behalf as well.
In April, milk dumping was really a national issue, and it happened across the entire United States. We had a really tough month, but we still did not penalize any farmers. We accepted their milk, some of it did have to get dumped like every other company in the nation, but we didn’t have to dump as much because so much of our product is going to make cheese and other dairy products.
The farmers stepped up at the end of April and helped us with a management plan to curb the amount of milk we were receiving, which is still in place now. It’s hugely helpful, and difficult for them. With cows, you have to start to change their feed to try to slow the production down a bit. But they’ve done a great job, and it’s been very helpful to the whole organization.
From our side of things, we consider the co-operative structure a positive. The farmers, the membership, the board of directors—they understand what’s going on. If we were just a stand-alone company, we could’ve told our milk supplier, “Nope. We’re full. We don’t need anymore.” But the whole nature of this business is, “How are we going to make this work?” Because we can’t just stop taking in milk immediately and walk away like a more typical company could. We really need to find a productive way to do it and continue to support the relationships we’ve built.