September 1, 2010

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Utah’s Own Executive Panel


Utah’s Own Executive Panel

Utah Business Staff

September 1, 2010

I think of a restaurant that we serve up in Jackson, Wyoming. They buy chickens from a farmer who hand feeds walnuts to the chickens. And that story is on the description of the menu item. The customer comes in and says, "I want that chicken, hormone free, that she feeds the walnuts."

The customer doesn't know this lady from anyone, but because that story is being told, she has a connection to it. And, therefore, she's buying those local products.

HOUGHTALEN: One of the problems I still see with the Utah's Own group is how do they get their stuff to that end consumer through the food service channel? A lot of folks who come to show us their product think that once I've got it into the warehouse, it's going to get sold. It's more complicated than that. We need to work more closely with these manufacturers on how to get their products sold in the marketplace.

Do you think it's worthwhile to pursue expanding Utah's Own out of the agricultural industry?
HOUGHTALEN: We have talked about trying to unify some of these things so that Utah's Own was more of an umbrella over all Utah. I think it's a good idea. I think it makes sense.

LAWES: We've moved our box production from a producer in the Midwest to a local box producer. Logistically, I'll pay a little bit extra to have a local trucker take it to Florida for us rather than pay a broker or someone else. I try to make sure that through everything we are doing as a manufacturer, we are trying to put as many Utah products and components into our box as we can.

We talked about the consumer not wanting to pay a little bit extra, but we might want to start with us as manufacturers being willing to pay that little bit extra to support our neighbor. We've been trying to do that this year a little bit more.

REICH: But we have to ask those packaging companies and others to trim their prices. Because it's no wonder that our Utah products are more expensive because we pay a little bit more all the way along. We've got to work with them to continue to get those costs down so they are competitive, but we are also supporting locals.

HOUGHTALEN: It would probably help if it was all under one umbrella. Now you are talking about supply chain versus just getting stuff out there.

LAWES: We have worked out different arrangements to help bring those costs down, but we told them ahead of time, "We are trying to support all local companies."

REICH: It's something you have to work at. A little while back we were going to buy some Utah's Own aprons, but we got this great price out of China on aprons. We started to think about it, "Hey, wait a minute here. What are we doing?" You have to continue to remind yourself.

HARMON: We have a strong passion for sustainable farming. We purchase from up to 40 different local family farms—some large, some very small, even community farms. We've established about 12 solid partnerships with local artisans or farmers, and we pay the difference so that their market doesn't shift, meaning that we have sustainable pricing that we agree to before they plant. We say, "This is what we are going to pay you this year." And the market could go dump or it might be a bumper crop. But they don't go through the sways and the swings of farming.

Farming is the craziest thing I've ever heard of because when they've got a bumper crop, they get less money for it. It's just the most insane thing I've ever heard. You produce a lot of great milk and you get paid less.

But we have an obligation to help bridge that—not entirely, but in some fashion. As soon as you educate the consumer on that, they are on it. We have a very educated consumer in this market. These people are not just out there swinging at the fences. They study; if they are buying for value, they've studied it.

When we are offering Utah's Own products, we don't care if it's also at Walmart. You have got to stay in business. Frankly, if you are selling in Walmart, you should be able to sell to us a little bit less expensively. There are economies of scale.

I was just thinking about the construction firms that build all of our facilities and stores, the architects, the decor people, the printers, the advertising agencies. All these people are here supporting all of this and it's a much bigger picture.

DEJOHN: I just wanted to say emphatically how important Utah's Own is to Utah Roller Mills. I don't even have a tenth of the resources that General Mills has against my company. I don't have the marketing resources or the temporary price reduction ability. I've tried it, and I'm killing myself reducing our margins to try to compete, when General Mills has “10 for $10” specials in the retail stores.

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