STATE COLLEGE, Pa. — Fairlife milk has been on a roller coaster the past few years.
At its launch, the brand of ultrafiltered milk was heralded as a long-needed innovation in dairy products and packaging, but undercover videos apparently showing farm animal abuse tarnished its reputation last year.
Steering the brand through it all have been founders Mike and Sue McCloskey.
Sue told her story at the Pennsylvania Dairy Summit on Feb. 5 at The Penn Stater.
McCloskey grew up in a small town in northern New Jersey near milk distributor Van Peenen’s Dairy.
“The Van Peenen brothers were kind of like Brad Pitt hot, so I had a very early love of dairy,” she joked.
McCloskey did end up marrying a veterinarian turned dairy farmer. She and Mike met in California and moved to New Mexico to take over a dairy. Mike helped found the Select Milk Producers cooperative in 1994.
The idea for Fairlife, like many innovations, grew from an accident.
The McCloskeys noticed that milk production had dropped after the farm’s well collapsed and was repaired.
Mike discovered that the rebuilt well had been outfitted with the wrong filter.
That mishap prompted Mike to experiment with the filtration of milk. He mixed different amounts of fat and proteins and came up with a lactose-free, reduced-sugar product that tasted good.
Sue saw a golden opportunity to market the drink to health-conscious parents.
“If you could put this in a bottle, I guarantee you I can sell this to every woman in America,” she told Mike one night at the kitchen table.
Fairlife was launched as a joint venture between Select Milk Producers and The Coca-Cola Co.
Coke launched the product with a splashy marketing campaign — literally, ads featured women wearing little but milk splashes — and modern-looking bottles that departed from the staid jug mold.
Retail sales topped $500 million last year, according to Nielsen AMC.
Coke became the full owner of the brand in January, though Fairlife continues to operate as a standalone business.
The revamped milk is finding success in a fiercely competitive beverage market where coffee and bottled water options are proliferating.
Fairlife is targeted at health-conscious consumers, but it also has to taste good and make the consumer feel good, Sue said.
Those good feelings were challenged last summer when an animal welfare group released undercover videos seeming to show animal abuse at Fair Oaks Farms, Fairlife’s flagship farm in Indiana that the McCloskeys founded in 2004.
Three former employees were charged, and one was sentenced to a year of probation.
In a statement last summer, Mike McCloskey said the three workers responsible for most of the abuse had been terminated after co-workers reported them, and the fourth employee was canned in response to the videos.
Mike also announced several measures to ensure animal welfare on the farm.
At the Dairy Summit, Sue apologized for the Fair Oaks abuse, saying it put a black mark on the entire dairy industry.
“When something like this happens to one of us, it happens to all of us,” she said.
The farm has created an animal welfare advisory board and within six months, 21 of the farms that work with Fair Oaks have been audited, she said.
The McCloskeys have also taken steps to show they share consumers’ environmental values.
Each farm under the Fair Oaks umbrella has a manure digester and uses the methane to generate electricity. The farm also has 42 tractor-trailers running on biofuel created by the digester.
“Carbon footprint is the next big thing,” Sue said.
Over its brief existence, Fairlife has bucked the decadeslong trend of declining fluid milk sales.
The company’s customer satisfaction rate is 90%, and 69% will buy the product again, Sue said.
“Real business people understand that there is still room for growth in milk and for innovation in milk,” she said.