Happy Cow Milk BIB
Happy Cow Milk BIB

PodcastsMay 10, 2018

Why Happy Cow Milk failed to bring change to the dairy industry

Happy Cow Milk BIB
Happy Cow Milk BIB

Business is Boring is a weekly podcast series presented by The Spinoff in association with Callaghan Innovation. Host Simon Pound speaks with innovators and commentators focused on the future of New Zealand, with the interview available as both audio and a transcribed excerpt. This week Simon talks to Glen Herud about sustainability in the dairy industry and why his company, Happy Cow Milk, failed.

This week marks 100 episodes of Business is Boring. Thanks so much for listening and having us along to make this happen! And appropriately, this week’s guest is a straight-to-the-poolroom classic with a chat that explores a whole lot of themes we’ve been a bit obsessed with over the last hundred.

Themes like – moving past primary industries, building IP into products, doing things differently, innovating and caring about a better world. Add in something about moving past investing in houses towards productive assets and you’d get Business is Boring bingo (and have a good idea what it’s like to be stuck next to me at a dinner party).

This week’s chat also takes us behind life in the dairy industry. It’s an industry that’s easy to malign as a polluter and all the rest, but the truth is more complicated than that. We hear from Glen Herud of Happy Cow Milk, who tried to make positive change to dairy but had to say he failed and call time on his business. (Read more from Glen, who tells his story in his own words, here.)

Even after talking to the people behind scores of multi-million dollar successes over the last few years, I have a feeling this is likely to one day be one of the best success stories in the whole series. Something about the way Glen sees problems everyone else is busy looking past tells me this isn’t the end of the story at all. Have a listen and add your voice to what he is doing if you’d like to help; I will be. There’s a wave of change coming to dairy, and wouldn’t it be wonderful if someone who cares so much for the industry could be embraced to help lead the way?

As ever, thanks to everyone who shares feedback, story ideas and the podcast to their mates. Here’s to another hundred.

Dairy farming is an area ripe for innovation. With some big questions about the sustainability of the industry around pollution, effluent, nitrates, greenhouse gas, animal welfare and growing past a strict put more cows on land model there is a lot to work on, and with billions at stake they are questions that are important for the whole country.

So you’d think the industry would take an innovator and support them.

Well, that wasn’t exactly the case for Glen Herud of Happy Cow Milk.

He set out to make two major changes in dairy practice: a sustainability change around packaging practice, with reusable glass bottles, and an ethical change, to try to address the practice of removing calves from cows at birth and sending them to the slaughterhouse at a few days old, which can be distressing for the calf, cow and farmer.

Along the way Glen had to build out every change, as the existing structures in our huge industry couldn’t fit the model. He built a mobile milking shed, a bottling plant, his own distribution. But it wasn’t enough. Labelled niche and made expensive, the volume didn’t come and he made the hard call to call time on a project that had taken his savings, years of his life and had him away from family.

And then an amazing thing happened. His Facebook post calling time went bananas. The story about it on The Spinoff travelled far and wide, and thousands of people signed up to hear more, liked and shared the posts, told their friends, and offered to invest in Happy Cow mk II. With dairy so important and the practices so ripe for scrutiny it’s important work and I’m very excited to have Glen in today to talk about the entrepreneur’s journey, the dairy industry and what’s next for Happy Cow Milk.

Either download this episode (right click and save), have a listen below or via Spotifysubscribe through iTunes (RSS feed) or read on for a transcribed excerpt.

You’d run traditional dairy farms in the past and wanted to come at it with a different approach. Why was that? 

I could see that people were really concerned about animal welfare and sustainability was the first thing. All the headlines around water quality and things like that. I wasn’t farming at the time and I saw a headline about water quality and thought what the heck is the deal with this?

I spent a bit of time researching and found the science there. We know what causes it and we know how to stop it, but the problem is it requires farmers to either de-intensify or come up with some magic science that would enable them to stay intensive.

Whatever mechanism you could find that would mean your cows weren’t affecting the environment effectively meant that your costs were going to be up. For the past 17 years farmers have on average been paid 50c a litre for their milk so any sort of mitigation or farming system that’s going to be sustainable has to be workable within that 50c price, and that’s where the problem is from.

It’s a zero-sum game. If the only game you have is putting more cows on the land then anything you do that means the land isn’t over-intensified is just money out of your pocket. 

If you say ‘we’re going to run cover crops’ which is where you put crops behind your cows in the winter, that essentially means you’re less intensive because you have less cows on those paddocks. It means you might have 2.5 cows per hectare rather than 3 cows per hectare, and that’s a direct cost.

If you were running a cafe, that’d be like employing staff that don’t do anything.

This has been the problem for years, this idea that dairy has to move past the strict primary play and start adding some value.

We’ve been hearing that for 20 odd years. We see reports, we see farmers galavanting around then coming back and telling us to tell our story better and this, that, and the next thing. 20 years of Fonterra and we’re still getting 50c a litre for our milk. Meanwhile we’re seeing A2 milk corporation come in, our largest company now.

And that started as a renegade splinter from the dairy board. People who’d been dairy board grandees saw that there was this protein story and then went and set up an idea. 

The science isn’t settled on that A2 either, it’s marginal science. Facts don’t matter.

Keep going!