If the economic downturn at Boeing in Seattle in the early 1960s hadn't occurred, Redmond's Eberhard Dairy may not even exist today. Bob Eberhard was selling Dictaphones in Puget Sound and was concerned he wouldn't weather the downturn. That was the catalyst for a young Eberhard to return home in August of 1964 to join the family business processing butter and dried milk products.
Much has changed since then. When he joined the family business, Bob, who majored in business at Oregon State, said he wanted to expand. "What I wanted to do was become a full line processor of dairy products," he now says.
It only took moments for his father to agree. Cottage cheese was the first new product introduction and there have been numerous since. To accommodate the manufacture of new products, the family began expanding the original creamery building in the fall of 1964.
Cottage cheese hit consumer shelves in May 1965, with fresh milk and ice cream coming in January 1967.
Growing Eberhard's Dairy
In 1969, Eberhard purchased a competing dairy in Bend, doubling production. "It was a big nut for us to crack," he said. Then, on Jan. 1, 1981, Eberhard purchased Kilgore's Dairy in Redmond. Timing wasn't perfect with the economy entering another tailspin. "Once again, this was an even bigger nut for us to crack."
Production doubled. Sales doubled. Accounts receivable and payable also doubled. "We knew we were on the hot seat. We had to make a lot of changes such as combining routes to generate income to make those payments."
After absorbing Kilgore's, Eberhard continued to manufacture products under two brand labels. But, by 1983, the company decided to join the Quality Checked Dairy Products Association and it began processing its products as "Eberhard's Quality Checked." The new association provided the company with a competitive advantage in packaging and branding.
Where the Milk Originates (besides the cow)
Milk comes from two dairies in Central Oregon, sending tanker trucks to the producing dairies to collect it. Other sources include the Oregon Milk Marketing Federation which contracts with large dairy producers in Southwest Washington. At midnight, tanker trucks are loaded and arrive at Eberhard's by 5 a.m. The milk is processed that day, keeping bacteria counts at a minimum. Eberhard is proud to feature products with no added growth hormones.
"My favorite milk is one percent," Eberhard says. "Cottage cheese is a favorite of mine. I've eaten butter all my life and ice cream." He says you can manufacture as many flavors of ice cream as you want, but vanilla will still be 35 percent of sales.
Bob guided the Source Weekly through the dairy's processing plant located on Evergreen Street—finishing the tour by taking us into his large freezer jammed with ice cream ready for shipment—a 70 x 70-foot room he described as "the largest and coldest spot in Central Oregon."
Eberhard is optimistic about the company's future. "We're really a very small dairy processing plant and the last dairy processing plant east of the Cascade Mountains." Eberhard says growth is critical to survival. "If you're not getting larger, then your cost of production becomes too high and you can't be competitive." He continued, "Our goal has been to always grow faster than the population."
At supermarkets, roughly 10 percent of all sales are dairy product related. "If supermarket sales are going up, our sales are going up accordingly. Another way we will grow is to expand our borders through distributors or wholesalers." Distribution centers offer him a cheaper way of transporting products to many locations.
Eberhard also has marketing agreements with stores such as Ray's supermarkets and Haggen's, supplying them with customized products. And the company supplies dry curd cottage cheese to Chez Gourmet in Portland to make vegetarian burgers. "There is still opportunity for us to expand," he says.