Horizon Selling Organic Milk Farms to Focus on Building Brand

BOULDER, Colo.--Horizon Organic Holding Corp. (NASDAQ:HCOW) announced Aug. 22 that it plans to sell its company-owned, organic milk-producing farms in Idaho and Maryland. Approximately 7,000 organically supported cows will be sold with the farms, including an estimated 6,000 cattle that reside in the nation's largest organic milk farm in Idaho. Next year, the company also plans to sell its undeveloped farmland in California and end its herd management agreement in Colorado. Products such as the company's organic eggs will not be affected by these plans as they are bought from contracted farmers.

This decision is in line with the company's endeavors to depend more on independent dairy producers for its future milk supply. "When the company was founded ... the only way it could ensure an adequate supply of organic milk was to own organic dairy farms," stated Chuck Marcy, president and chief executive officer of Horizon Organic. "[M]ore organic milk is being produced and supply and demand is now better balanced." He added that by finding a strategic alternative for these farms, the company can focus more on building the Horizon Organic brand. "By Horizon Organic concentrating on building its brand, it will get more consumers interested in becoming regular purchasers of organic dairy products, which will serve to expand organic milk production," he told Insider.

He also stated that the company (www.horizonorganic.com) plans to continue being supplied organic milk from these farms. "I don't feel we need to own the farms to acquire their assets," Marcy said. "I see this as an opportunity for someone to become an organic dairy producer."

As another means of promoting organic, the company has formed the Horizon Organic Agriculture Leadership Program. "The company-sponsored program will bring together experienced organic experts to support current and future organic dairy partners," Marcy added, stating that this initiative will support research and development in the science of organic foods. Kelly Shea has been named director of the program, and she can be reached at (303) 530-2711, ext. 183.