Colorado Springs, Colorado

Co-owners Jennifer and Tim Gomez are shaking up the dairy aisle with a focus on sustainable manufacturing and premium products.

A veteran of the dairy industry, Tim worked at Leprino Foods and several co-ops before launching Kansas Dairy Ingredients with investment partners in 2012.

“That business is focused on mid-manufacturing,” says Jennifer. “We make custom ingredients for larger customers. We make ice cream blends and custom ultra-filtered milk blends for different uses.”

Photos courtesy Sawatch Artisan Foods

Now 55 employees, the operation in Hugoton, Kansas, has pioneered ultrafiltration in the production of concentrated milk products.The benefits are both fiscal and sustainable. “You’re primarily hauling water across the country,” says Jennifer. “All of that water that’s also in the milk leaves the state. With the aquifer under Kansas, there’s only so much water, and the aquifer’s drying up pretty quickly.”

She adds, “Several years ago, we invested heavily into a wastewater treatment facility. We are actually able to pull the water from the milk during the manufacturing process. We clean and treat all of the water, and we use that water to clean the facility and we built a pipeline system that sends that water out to the farmer neighboring us to grow crops. Those same crops go to the farmer we’re getting our dairy from, so we’re able to keep that water in Kansas and we’re able to reuse that water.”

The operation saves more than 40 million gallons of water a year, and reduces emissions “just from having the trucks not have to drive out of state to transport milk that was going to all these other places,” says Jennifer, who notes that it adds up to 800 fewer truckloads of milk leaving Hugoton every month.

“There aren’t a lot of [private dairy manufacturers] in this part of the country,” says Jennifer. “It’s really important for all of the dairy farmers and all of the milk around us to have a home.”

As Kansas Dairy Ingredients gained traction, a partnership with a large customer required an increasing amount of the company’s manufacturing capacity.

“In 2018, we were at a crossroads,” says Jennifer. “We realized that was not a direction we as a company wanted to take. We wanted the flexibility and freedom to create for ourselves. . . . When we pivoted away from that, Sawatch Artisan Foods made a lot of sense. We already had the capacity from a manufacturing standpoint to receive the milk into our facility. We have the silos, we have the separators, so we’re already able to take the raw milk through that first part of the process, which makes it really affordable in that sense to add some additional investment to create a final product.”

Tim and Jennifer relocated from Kansas City to Colorado Springs to start the new company. Colorado Springs was chosen due to both its proximity to the mountain towns the Gomezes see as fertile markets for their products, as well as Kansas Dairy Ingredients in southwestern Kansas.

“Colorado was where we wanted to be, and more importantly, it’s closer to our facility,” says Jennifer. “We are now just about 4.5 hours away from our main manufacturing facility in Hugoton, Kansas.”

Leveraging Kansas Dairy Ingredients as its exclusive manufacturing partner, Sawatch Artisan Foods catalog includes European-style butter — with more butterfat and a creamier texture — and artisan cheese.

The artisan butter “has definitely been our bread and butter,” laughs Jennifer. “All of it is batch-churned — we don’t have any industrial, continuous churns, which is how most of the butter here in America is made today. We wanted to take it a step back and bring back some of the art and technique to everything we make.”

The finished product is “always over 82 percent butterfat,” she notes. “Sometimes, it’s between 84 and 85 percent, which is just amazing. A lot of the wholesale customers we’ve been selling to are in love with it.”

The same craft ethos covers the cheese side of the catalog. “All of our cheeses are produced by hand,” says Jennifer. “We make fresh cheese curds every single week, and there’s been a big demand for that. There’s not a lot of fresh cheese curds coming out of this part of the country.”

After starting out in an office and separate cold storage space for products manufactured in Kansas, the company is readying a new 7,400-square-foot facility in central Colorado Springs to handle retail and some production, with a target opening in spring or summer 2021.

“We’re going to do our smaller-scale manufacturing here in the Springs,” says Jennifer. “We’ll do some of our butters on a smaller scale, we’re going to do packaging, and we’ll also do cheesemaking here, cheese curds and different variations of cheeses.”

Challenges: Wrapping up construction and moving into the new facility. “It’s taken a little longer to get through the city with COVID and everything else,” says Jennifer. “The other challenge we face is just bringing on the right folks to really hit on that message and get distribution out and really push volumes.”

Opportunities: New products, including artisan ice cream with more protein and less sugar. “We’re having a lot of fun creating some new things here and innovating some new products, so we’re excited about that,” says Jennifer.

She also sees potential to engage the local community with tours, classes, and other events “and really just have people be part of the creation of their food, something which is now much more important than ever.”

The new facility will be a platform for engagement. She adds. “We’re bringing something new and different to the community and help them really see and understand the process, and where the milk comes from, and that hands-on piece of transforming it to butter or to cheese.”

Wholesale launched in April 2020, and the Gomezes expected it to account for as much as 60 percent of sales. The pandemic put a damper on that, but direct-to-consumer sales helped fill the void, accounting for about 50 percent of sales in late 2020. “People wanted to buy local, they wanted to know where their food was coming from, they wanted to buy it fresh, and they wanted to avoid the grocery store,” says Jennifer.

Moving forward, Colorado’s ski towns are big wholesale targets. “I want to expand and permeate the state of Colorado,” she says. “It’s so hard to find European-style butter here locally, and we’ve actually had some wholesale customers all the way up into New York and Pennsylvania reach out and purchase pretty large quantities of our butter as well.”

There’s also an opportunity to grow in tandem with Kansas Dairy Ingredients, she adds. “There’s a lot of dairy farmers in the area with a lot of milk, but there’s not a lot of manufacturing.”

Needs: “New employees to help support our growth and distribution channels to drive our volume,” says Jennifer. “In order to attract some of the best talent and some of the resources we needed, we couldn’t necessarily locate all of our resources in Hugoton, Kansas. We needed to pull from a bigger city with more technical resources and talent as we grow. Colorado Springs was the perfect location for that.”

She points to “continued innovation” as another need, citing the benefits of “the ability to think a little bit differently.”