California dreaming: winder dairy adds three million people to its customer base.

• Author: Johnson, Melanie
• Position: Lessons Learned - Winder Farms - Company overview

Fresh food without borders. That's a concept Winder Farms has tackled 1th great success.

The company has specialized in delivering fresh food to doorsteps for more than 120 years, and it expanded beyond Utah in 2008 when it entered the Las Vegas market. The success of this venture laid the groundwork for expansion into additional markets--including the "massive" Southern California market, which it entered earlier this summer.

West Valley-based Winder Farms now delivers farm-fresh food directly to customers' doorsteps in Orange County, Calif.

"The food industry is a $1 trillion per year industry in the U.S., and two-thirds of that is food that people buy for their homes," says Mike Dutton, Winder Farms CEO. While expansion brings challenges, it also presents the potential of enormous, untapped markets.

And growth offers its own rewards. "There are benefits to getting to scale," Dutton says. "When we're just in Utah, we have to spread our fixed cost over a smaller customer base. As we can get into Las Vegas and Southern California, and all throughout the West, our business model becomes better with scale."

Entering a new market is never easy, and Winder Farms has some key advice for companies looking to find success in new locales.

Research the Market

Deciding to expand was only the first step in a long process. Next, Winder Farms had to find the right market where target demographics would support fresh food home deliveries. Company leaders drew an 11-hour map around the radius of Salt Lake City. The Department of Transportation allows 11 driving hours per day, and the company wanted same-day deliveries of their products.

Through this research, Winder Farms pinpointed Orange County as an ideal entry point into California. Orange County boasts a population of three million people, so the potential for growth was there.

"We were looking for those who value fresh food and are willing to pay a premium for it," Dutton says. "In Southern California, you have a high propensity of all-natural grocery stores--there's a density of population."

Winder Farms sent a sales team into Orange County to scout the area. They talked with prospective customers and gauged their interest in fresh food deliveries. Feedback proved positive. Orange County seemed ripe with customers who craved fresh meat, produce, dairy products and bakery products arriving at their doorsteps each week.

One unexpected wrinkle emerged. The team quickly learned that to thrive in Orange...