Investing in Growth-oriented Companies in Agriculture

For more than 79 years, Maytag Blue Cheese has been an American tradition. Founded by the Maytag family, made famous by its appliance business, Maytag Dairy Farms formed its first wheels of handcrafted, artisan blue cheese in Newton, Iowa, in 1941. It was the first blue cheese produced with cow’s milk.

For generations, Maytag Blue was on menus all over the world and the family-owned company did well financially, but in recent years, its growth had stalled. Family members had moved out of the area, making it difficult for them to provide hands-on oversight of the business. A voluntary product recall in 2016 forced a closure of the cheese plant for more than 10 months, affecting wholesale and retail relationships built over generations. The family decided to sell the business, but were determined to do so only if they could identify a buyer that would honor the heritage of the company through continued investment and maintain its presence in rural Iowa.

John Mickelson, managing partner of Midwest Growth Partners (MGP), learned about the Maytag opportunity in 2018. MGP is a private equity fund investing in growth-oriented companies in the upper Midwest and its founders are all native Iowans. MGP operates two funds, both of which have received backing from CoBank as part of their efforts to create economic opportunity in rural communities.

We have found a natural partner in MGP and they have proven to be exemplary stewards of shareholder capital. MGP’s investment in Maytag Dairy Farms is a great example of our shared values.

“In addition to earning an attractive economic return, CoBank’s investment objectives include increasing rural prosperity through local investment and job creation,” said Dave Dornbirer, vice president, public/private partnerships. “We have found a natural partner in MGP and they have proven to be exemplary stewards of shareholder capital. MGP’s investment in Maytag Dairy Farms is a great example of our shared values.”

“Midwest Growth Partners looks for great little companies that are going through transition or looking for growth,” said Mickelson. “Other funds tend to invest in coastal or urban businesses, leaving the Midwest market significantly underserved. The businesses we invest in are typically the largest employers in their small communities, and we wanted to help perpetuate the vitality of those communities. Maytag’s history, and its importance to the town of Newton, made it a great fit for us.”

MGP completed the purchase of Maytag Dairy Farms in January 2019 and immediately began making investments in the operation: hiring an engineering firm to update and modernize the cheese plant and a marketing firm to refresh the company’s brand and build upon its reputation. They also made a number of strategic hires, including Maytag’s new CEO, Don Boelens.

I’ve always admired Maytag for their excellent products

“I’ve always admired Maytag for their excellent products,” said Boelens. “They have a great brand with a strong following and I think of them as a model for what an artisan cheese company should be. When the opportunity came up to be a part of this organization and to help take it to the next level, I jumped at the chance.”

Boelens and MGP are excited about the future of Maytag Dairy Farms. Revenue is up 17 percent year over year and the business is in the process of receiving its certification in the Safe Quality Food (SQF) program, widely considered the gold standard for food safety. The Maytag team is also hard at work expanding their line of products.

“We are famous for our blue cheese and will always be a blue-veined cheese manufacturer, but we are also expanding into ancillary products,” said Boelens. “We’re currently rolling out Maytag Farm Reserve, a new, rinded blue cheese. We’ve been able to recapture whey from our cheese production, something that used to be a waste product, and use it to make an excellent ricotta. And we’re exploring opportunities to work with other artisan cheese producers: finding the best of what’s out there and branding it with the powerful and trusted Maytag name.”

Mickelson and MGP are also enthusiastic about the opportunities a revitalized Maytag Dairy Farm will create for the town of Newton.

“A successful Maytag is an economic win for the entire community,” said Mickelson. “We use local resources and hire local people. Many of our current employees live in Newton and we’re excited to create more job opportunities as the business continues to grow. We’re also extremely proud to continue the tradition of fi ne artisan cheese made right here in Iowa.”