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Hollandia Dairy's multi-million dollar expansion under way

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When Hollandia Dairy began producing milk in 1950, upwards of 100 dairies in San Diego were doing the same, and 15 to 20 were processing and bottling it, according to General Manager Lee Hodge. Back then, the milkman was more than a mere icon of Americana.

Now, there are only four dairies in the county according to Eric Larson, executive director of the San Diego County Farm Bureau. While Hollandia is not counted among them -- since its 6,500 cattle are located in Riverside County -- it remains an important part of San Diego's economic landscape, especially since its San Marcos, Calif.-based creamery is in growth mode.

Hollandia is in the process of an estimated $10 million two-phase expansion to be followed by an estimated $3.5 million third phase next year.

Still owned and operated by the original family -- the deJongs, who immigrated from Holland to San Marcos during World War II -- the independently owned company was recently handed down to the third generation, a younger and more aggressive lot with a proverbial eye on growth.

"It's a large family that works close together and is very lucky and thankful for the opportunity they got out of America," said Hodge, whose 25-year tenure at Hollandia Dairy has given him a sharp perspective on the business.

Hollandia produces and processes milk for retailers, schools and prisons in San Diego and Orange counties and parts of Los Angeles, Riverside and San Bernardino counties.

Hollandia Dairy in San Marcos, one of the few remaining dairies and creameries in the region, is currently undergoing a $10 million expansion. Photo courtesy of Hollandia Dairy

Phase 1, slated for completion by early December, consists of two buildings: The first, at approximately 16,000 square feet, will house a new $1 million water treatment plant, which may loosen current restrictions on the types of dairy-derived products that can be produced, like sour cream and cream cheese. It will also contain refrigeration, storage and office space. The second building, at 40,000 square feet, will consist of 10,000 square feet of frozen refrigerated space, 20,000 square feet of medium temperature refrigerated space and 10,000 square feet of office space.

Phase 2, slated for completion in early 2012, will include 10,000 square feet of additional freezer space, 20,000 square feet for medium temperature items like milk and its byproducts, and a two-story, 10,000-square-foot administrative office structure.

Phase 3 will include an additional level near the existing plant facility -- a load and storage area for production and additional space for new products or future expansion – totaling an additional 15,000 square feet of refrigerated space replacing the current. Construction is anticipated to begin later this year or early next year.

Hodge cites precise production and distribution numbers as proprietary information, but indicates that the resulting new facilities will enable Hollandia to double its storage and distribution capacity.

"We're looking to increase our sales efforts and sell more milk and make sure we can grow and people in the county can grow with us by getting additional employment opportunities," he said.

Hollandia began to create more employment opportunities when enlisting TFW Construction in Poway for the expansion which, Hodge said, is on schedule.

"With the economy the way it is, it's a funny time to expand; at the same time it's a good time. ... as long as you have confidence in your business," he said. "So many people get into head games and all they do is look at the worst stuff. If you're going to be successful in leading an organization, you have to look at the positive side."

Those positives include lower costs and more aggressive contract bids.

The Hollandia team is currently scouting for two to three additional salespeople with a background in dairy and, as the expansion progresses, will employ additional salespeople, production workers and local drivers.

"When we do hire, they will all be local people," Hodge pledged.

With growth comes change but, according to Hodge, Hollandia will still operate, in many ways, like a family-run business. Until recently, the dairy offered a free milk program for all employees. With the loss of the retail facility out front, however, the program will cease in its current form, evolving to a more manageable system.

"We've given [employees] an increase in their salary to compensate for the value of the milk we give them," he said.

And they'll continue to source their milk from their San Jacinto farm.

In addition to producing milk, Hollandia packages, but does not produce, roughly half a dozen 100 percent juice products for schools and prisons, half pints and gallons of punch, ice cream, cottage cheese, sour cream, yogurt and more.

As the nation's debt-to-GDP ratio hovers at 350 percent -- 50 percent more than during the Great Depression -- the Hollandia team fully anticipates completing each phase of its collective long-term vision.

"It's like that old saying: when you're up to your tail in alligators, it's hard to remember your [initial] objective was to drain the swamp," Hodge said.

Larios is a San Diego-based freelance writer.

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