Dairy business changes hands

Foster Farms Dairy announced Monday that it is buying Crystal Cream & Butter Co.'s dairy business, increasing the Modesto-based firm's milk processing by about 20 percent and extending its reach in California.

Foster Farms Dairy soon will begin making Crystal milk products, such as cottage cheese and sour cream, at its processing plant on Kansas Avenue. It purchased Crystal from HP Hood LLC of Massachusetts, one of the nation's largest dairy product companies.

As a result, the Modesto production center will add 35 jobs and process an additional 500,000 gallons of milk per week. Foster Farms will maintain Crystal's producer relationships.

The deal will allow Foster Farms to expand to hundreds of new retail outlets in California, particularly around Sacramento.

It includes 55 drivers from Crystal's Sacramento operation and 30 employees at Crystal distribution centers. The deal will add 70 Crystal trucks to Foster Farms' distribution fleet. The transaction doesn't include Crystal's production facilities or other assets.

Foster Farms would not disclose the purchase price or other financial details. The acquisition is scheduled to be completed in 30 days.

"It's very exciting for us, and for our family, to be able to acquire another family-owned business with a name like Crystal," said Jeff Foster, president and chief executive officer of Foster Farms Dairy. "It's a very exciting time."

Foster said the Modesto plant will process milk, cottage cheese and sour cream to start, eventually adding ice cream and possibly butter.

Founded in 1939, Foster Farms Dairy originally was a spin-off of the Foster Farms Poultry operation in Livingston. It began as a dairy and milk-delivery company for Modesto residents.

The company is the largest privately owned dairy in California, and the Foster family still owns it. The company processes about 2.5 million gallons of milk a week and employs 650 people.

Crystal, which began in 1901 in Sacramento, had a milk processing plant there for decades.

According to the company's Web site, Carl Hansen bought the company in 1921 and expanded from cream to bottled milk and ice cream, making it one of the largest private employers in Sacramento before he died in 1957.

The company sold its home delivery routes in 1974, and went through expansion and modernization in the 1980s.

Crystal remained family-owned until Hansen's descendants sold the company to HP Hood in May.

Both companies tout the fact that their milk is free of the synthetic growth hormone rBST.

The Sacramento Bee contributed to this report.

Bee staff writer Ben van der Meer can be reached at bvandermeer@modbee.com or 578-2331.