>> THANKS FOR HOSTING US HERE AT THE HEADQUARTERS IN DEWITT.

ON PREVIOUS SHOWS WE HAVE DONE, WE TALK A LOT WITH SMALLER COMPANIES START-UPS, COMPANIES COMING OUT OF THE TECH GARDEN, YOU KNOW, THEY'RE BRAND NEW.

BYRNE DAIRY, I MEAN YOU ARE PUSHING 100 YEARS.

YOU HAVE BEEN AROUND.

THAT'S PRETTY IMPRESSIVE.

YOU STARTED OFF BASICALLY JUST IN DOWNTOWN SYRACUSE, CORRECT?

AND THEN KIND OF EXPANDED A LITTLE BIT FROM THERE BUT BACK IN THE DAY, IT WAS PRETTY MUCH JUST ALL BOTTLED MILK, RIGHT?

THAT WAS THE BUSINESS.

>> YES, IN THE, IN REALLY A SMALL PART OF THE CITY, MAYBE ONE MILE RADIUS OF THE PLANT.

>> YEAH I WAS THINKING THERE WAS NO PROBABLY GOOD REFRIGERATION TECHNOLOGY.

YOU COULDN'T GO VERY FAR WITH IT, RIGHT?

>> HORSE AND BUGGY.

>> EXACTLY.

I SAW OR READ AN INTERESTING SIDELINE THAT IT WAS MATTHEW WHO WAS YOUR GRANDFATHER, CORRECT?

>> YES.

>> STARTED OUT IN THE TIRE BUSINESS, WENT THROUGH THE CRASH OF 1929 AND ALL OF A SUDDEN NOW WE ARE IN MILK.

IS THAT WHAT HAPPENED REALLY?

>> YEAH, HE WAS IN THE TIRE BUSINESS AND IN THE BASEMENT OF THE BYRNE SQUARE BUILDING WHICH STILL SITS ON GENESEE STREET IN SYRACUSE, SOME GUYS RENTED OUT THE BASEMENT AND THEY WERE GOING TO BUILD A DAIRY IN 1928 AND THEY RAN OUT OF MONEY.

THE MARKET CRASHED.

AND HE STRUGGLED AS WELL IN THE TIRE BUSINESS, BUT IN '33, HE GOT SOME MONEY FROM TERRY BURELL AND FINISHED THE DAIRY PLANT HIMSELF AND THAT'S HOW WE GOT STARTED IN THE DAIRY BUSINESS.

>> THAT WAS A GOOD MOVE FOLLOWING THE CRASH OF '29.

IT WORKED OUT.

LET'S MOVE INTO CURRENT AND FUTURE DEVELOPMENTS.

IF I HAVE IT, 1970s RANGE, NOW BYRNE DAIRY IS GOING OUT AND GOING DIRECTLY TO THE FARMS TO PICK UP MILK, CORRECT?

>> STARTED PICKING UP MILK A LITTLE EARLIER THAN THAT, MAYBE AS LATE AS THE LATE 50s.

>> OKAY, YEAH AND WHAT WAS THE BENEFIT OF THAT?

HOW DID YOU BENEFIT FROM THAT?

>> WELL, WITH GOING TO THE FARM, YOU CUT OUT THE MIDDLE MAN AND YOU ARE NOT COUNTING ON SOMEONE ELSE TO BUY THE MILK, PROCURE THE MILK AND THE QUALITY OF THE MILK YOU CAN MANAGE IF YOU PICK IT UP DIRECTLY AND HAVE A RELATIONSHIP DIRECTLY WITH THE FARMERS.

SOME OF THE FARMS THAT STARTED IN THE 60sS AND THE EARLY 70s ARE STILL WITH US TODAY.

>> WHICH IS KIND OF NEAT.

>> AND IT'S A SPECIAL RELATIONSHIP.

YOU KNOW, WE ARE COMMITTED TO THEM.

THEY'RE COMMITTED TO US.

WE KNOW ALL ABOUT THEIR FARM.

THEY KNOW ALL ABOUT BYRNE.

AND WE HAVE A GROWTH PLAN FOR THEM AND FOR US THAT WORKS HAND IN HAND.

>> I WOULD THINK THAT ALL OF WHAT YOU ARE PRODUCING, ALL OF WHAT YOU ARE MAKING ON THE DAIRY SIDE IS ALL LOCAL, RIGHT?

ALL FROM FARMS AROUND THE REGION.

IS THERE SOME ADDED BENEFIT TO THAT, DO YOU THINK, OPPOSED TO WHAT WE MIGHT FIND ON A WIDER BASIS, NATIONAL CHAIN OR WHATEVER?

IS IS THERE A BENEFIT TO THE LOCAL FARMERS?

>> THE LOCAL FARMER DOESN'T HAVE TO PAY TRANSPORTATION COST.

TYPICALLY THE WAY THE GOVERNMENT SET UP MILK PRICING FOR THE FARMS, THE FARMER HAS TO PAY TO GET IT TO MARKET SO IF HE HAS A BUYER IN BOSTON OR PHILADELPHIA OR THE CAROLINAS, HE HAS TO PAY THAT FREIGHT.

IF HE HAS A BUYER HERE IN CENTRAL NEW YORK, YOU KNOW, FREIGHT MIGHT BE 10% OF WHAT IT IS.

SO MORE MONEY ENDS UP STAYING AT THE FARM.

>> AND YOU CONTRACT, RIGHT?

YOU ARE-- THE FARMS HAVE A CONTRACT WITH YOU OR VICE VERSE HAVE, TO PROVIDE THE PRODUCT.

>> AS MUCH MILK AS THEY MAKE EVERY MONTH, EVERY YEAR, I HAVE TO BUY IT ALL.

>> I WAS GETTING TO THE POINT THOUGH THAT I THINK SOME PEOPLE -- AND I'M ONE OF THEM-- YOU ALMOST WANT TO SUPPORT LOCAL SO YOU KNOW, YOUR PRODUCT COMES LOCALLY, YOU SELL IT LOCALLY.

YOU KNOW, I THINK THERE IS SOME ADVANTAGES TO THAT MAYBE, TOO.

I MEAN YOU ARE EMPLOYING PEOPLE OBVIOUSLY.

IT'S ALL A NICE CIRCLE, I THINK.

>> YEAH, ANY TIME YOU CAN BUY, YOU KNOW, GROW SOME CORN IN CAYUGA COUNTY OR ONONDAGA COUNTY AND HAVE FARMS THERE AND BRING IT IN AND PROCESS IT THROUGH THE MILK PLANT AND GO TO THE LOCAL GROCERY STORE AND BUY IT, I MEAN YOU ARE TALKING ABOUT A RIPPLE THROUGH THE ECONOMY.

>> SURE.

LET'S TALK ABOUT THE PROCESS BEFORE I TALK TO YOU ABOUT EXPANSION AND ALL OF THAT.

I REALLY DON'T KNOW A LOT OF WHAT HAPPENS.

BUT I MEAN I GET IT BASICALLY, YOUR TAKER SHOWS UP TAKES THE FRESH MILK FROM A LOCAL FARM BUT THEN WHAT HAPPENS?

WHAT IS THE PROCESS FROM THERE?

>> FROM THE FARM, THEY COME DIRECTLY TO THE PLANT.

WE OFF LOAD IT.

IT IS STORED IN A SILO BRIEFLY, MAYBE UP TO 24 HOURS, AND THEN WE RUN IT THROUGH THE PLANT.

WE PASTEURIZE IT.

>> THE BIG SILOS I SEE OUTSIDE?

THAT'S WHAT YOU ARE STORING MILK IN THOSE?

>> AND CREEP.

THERE IS A BIG CREAM FACILITY AS WELL.

WE PROCESS A LOT OF HEAVY CREAM AND MAKE A LOT OF HALF & HALF HERE.

>> ONE THING I WAS THINKING ABOUT.

I DON'T KNOW IF IT'S A CHALLENGE FOR YOU OR WHAT, BUT I DON'T KNOW HOW YOU CONTROL THE SUPPLY-DEMAND EQUATION.

BECAUSE ON THE ONE HAND I'M THINKING MAYBE THERE IS TIMES WHEN THERE IS MORE MILK IN CONSUMPTION, IT OCCURS TO ME THAT WE EAT MORE ICE CREAM IN JULY THAN IN FEBRUARY.

BUT NO ONE TELLS THE COWS THAT.

I MEAN THEY'RE STILL PRODUCING MILK.

SO HOW DO YOU CONTROL WHAT I THINK MIGHT BE A SUPPLY-DEMAND ISSUE?

>> WE EXCLUSIVELY BUY FROM THE FARMS THAT CONTRACT WITH US BUT WE ALSO CONTRACT WITH MILK COOPERATIVES IN THE AREA AND THEY WILL FLOAT WITH US AND MEET THOSE EBB AND FLOWS OF SUPPLY AND DEMAND.

IF YOU LOOK AT THE FOURTH QUARTER, FOR EXAMPLE, PEOPLE EAT MORE FOOD IN THE FOURTH QUARTER THAN ANY OTHER TIME AND THAT'S WHEN THIS PLANT IS THE BUSIEST.

>> THANKSGIVING AND CHRISTMAS.

>> RIGHT.

>> SO SOME WEEKS I WILL BE BRINGING IN, YOU KNOW, 50 TO 100 TRACTOR-TRAILER LOADS OF MILK IN THE FACILITY IN ADDITION TO WHAT WE NORMALLY RUN.

THAT IS SUPPLIED BY LOCAL MILK COOPERATIVES.

>> AS YOU HAVE BRANCHED OUT, IS MILK STILL THE CORE PRODUCT?

WE TALK MONEY A LOT ON THIS SHOW.

WHERE IS THE PROFIT MARGIN THE GREATEST FOR YOU?

IS IT MILK OR IN THE STORES OR, YOU KNOW, WHERE IS YOUR EMPHASIS THESE DAYS.

>> THERE ARE TWO SEPARATE BUSINESSES.

WE PROCESS THE MILK.

HALF ABD HALF HEAVY CREAM, ORGANIC MILK AND THE STORES OBVIOUSLY ARE BASICALLY A CONVENIENT STORE WITH A FOOD OFFERING.

THE STORES ARE BIGGER IN SALES RIGHT NOW.

THEY'RE ALSO BIGGER IN PROFITS.

THAT HASN'T ALWAYS BEEN THE CASE BUT THAT'S BEEN MORE THE CASE THE LAST FIVE YEARS.

>> THERE WAS A BIG MOVE.

JUST FROM ME LOOKING AT IT, IT SEALS LIKE THEY STARTED OUT WITH SMALLER STORES AND YOU ARE UP TO 70 OR 90 STORES OR SOMETHING LIKE THAT.

>> 74 STORES.

>> 74 STORES AND NOT ONLY THAT, I HAVE BEEN IN A COUPLE THAT ARE BIG.

>> SO MY BROTHER, MARK, STARTED HERE THE SAME YEAR I STARTED RIGHT OUT OF COLLEGE IN 197.

HE RAN THE STORE DIVISION AND I RAN THE DAIRY PROCESSING DIVISION AND HE HAD TO REBUILD ALL THOSE STORES.

AT ONE TIME THEY JUST SOLD MILK, ICE CREAM, MAYBE A FEW CONVENIENT ITEMS.

NONE OF THEM HAD GAS, NONE OF THEM OFFERED FAST FOOD OR FOOD AND PIZZA AND SANDWICHES AND STUFF.

AND THAT DIVISION IS OPERATED SEPARATELY FROM THIS.

WE SHARE A COMMON BOARD, BUT THEY HAVE DONE VERY WELL.

>> NICE.

PULLING IN AGAIN, WHAT STRIKES ME AS IS THE SIZE OF THE PLACE.

HOW MANY EMPLOYEES?

>> AT THIS SITE THERE ARE 250 EMPLOYEES AND THE DAIRY GROUP 550 EMPLOYEES.

WE HAVE A SISTER PLANT IN CORTLAND, A WAREHOUSE HERE IN MAGNA UNDERSTAND A BIG WAREHOUSE BY THE BALL PARK AND REGIONAL MARKET.

>> HOW DIFFICULT IS IT FOR YOU IN THIS INDUSTRY, IN THIS BUSINESS, AT BYRNE SPECIFICALLY, TO RETAIN EMPLOYEES AND OR HIRE THEM BECAUSE YOU ARE GROWING?

ARE YOU FIND THAT A CHALLENGE?

>> WELL, IF IT IS A CHALLENGE, WE ARE NOT REALLY DOING OUR JOB.

I DON'T EMPLOY TENS OF THOUSANDS OR HUNDREDS OF THOUSANDS.

I NEED 550 PEOPLE TO KEEP IT RUN RUNNING.

>> THAT'S A LOT.

>> THAT'S A LOT BUT WE HAVE A LOT OF SKILL SET.

WE PAY PEOPLE VERY WELL.

WE ARE CONSTANTLY REVIEWING BENEFITS.

WE ARE ADDING PAID TIME OFF, WE ARE MAKING SURE THAT WE ARE TREATING OUR PEOPLE RIGHT.

IT'S A CHALLENGE PLACE TO WORK.

IT'S A GOOD PLACE TO COME IF YOU WANT TO GROW.

BUT THERE IS ALSO ROOM HERE FOR PEOPLE THAT HAVE A SKILL SET THAT WANT TO COME INTO A JOB.

>> I LIKE THE CONVERSATION BUT WE ARE RUNNING LONG.

AS WE LOOK TO THE FUTURE MAYBE SOME CONCERNS AND WHAT NOT, AGAIN EARLIER YOU MADE A COMMENT ABOUT PEOPLE DRINKING HABITS, IF YOU WILL.

AND I WONDER AS DEMOGRAPHICS HAVE CHANGED, ARE WE DRINKING LESS MILK NOW?

HAVE YOU HAD TO SCALE BACK A LITTLE BIT FOR THE DEMAND OF THE PRODUCT?

>> WE HAVEN'T.

PEOPLE ARE DRINKING LESS MILK, BUT THEY'RE USING MORE CREAM AND MORE HALF & HALF, MORE ORGANIC MILK.

WHEN WE STARTED THE SEGMENT, WE TALKED ABOUT ONLY GOING A MILE FROM THE PLANT.

WELL NOW WE EASILY COVER FROM MAINE TO SOUTH CAROLINA.

SO MY MARKET IS A LOT BIGGER.

SOME OF THE PRODUCT IS SHIPPED OVERSEAS AS FAR AWAY AS GUAM, FOR EXAMPLE.

SO OUR MARKET IS ALSO AROUND THE GLOBE.

>> YOU ARE TELLING ME THAT OVERSEAS I WOULD FIND A BYRNE DAIRY PRODUCT?

>> EITHER A BYRNE DAIRY PRODUCT OR A PRODUCT THAT WE MAKE THAT IS SOME SOMEONE ELSE'S NAME ON IT.

>> I WASN'T AWARE OF THAT.

VERY INTERESTING.

I APPRECIATE YOUR TIME TODAY.

IT IS A LOT MORE GOING ON HERE OBVIOUSLY THAN JUST MILK.

SO WE ARE HAPPY TO REPORT ON THAT.

WE MIGHT CHECK BACK WITH YOU.

BUT CARL, THANK YOU VERY MUCH FOR YOUR TIME TODAY.