Minnesota’s Old Home Foods says it is “out of options and time” in suing cross-town dairy competitor Kemps over the soon-to-end use of a plant in Le Mars, Iowa, to make cottage cheese.
MN dairy fight: Old Home takes Kemps to court over fate of Iowa cottage cheese plant
Old Home’s federal lawsuit alleges breach of contract with its crosstown competitor Kemps over a packing-plant deal.
The Minnesota Star Tribune
October 14, 2024 at 8:41PM
According to documents filed Friday in the U.S. District Court for Minnesota, Old Home, a woman-owned, Bloomington-based maker of cottage cheese, sour cream and chip dips, says representatives from the St. Louis Park-headquartered Kemps revealed this summer that the facility would stop making Old Home products from the Iowa facility by Jan. 1, five months before the end of a May co-packing agreement.
Noting they’ve found another site to make the perishable dips and sour cream, but not the cottage cheese, which represents 60% of sales, Old Home is suing over breach of contract. To do otherwise spells the end of the 99-year-old company, the lawsuit says.
“If Kemps will not honor the parties’ relationship just five months longer than its current plans, it will force Old Home out of business,” it says.
Kemps’ parent company, Kansas City-based dairy conglomerate DFA, declined to comment, citing pending litigation. Kemps makes a number of products that are direct competitors with Old Home, including cottage cheese.
The allegations in the federal court docket lay out a quick dissolution of a partnership between Old Home and Kemps. Since 2020, when Kemps took over the Le Mars facility from failed dairy manufacturer Dean Foods, the Twin Cities dairy company had produced Old Home’s products. However, after an abbreviated visit to the Le Mars plant by Old Home officials in June, the Kemps team told Old Home the relationship was over by year’s end.
Over the next two months, according to the complaint, Old Home says Kemps has seeded anxieties within Old Home’s biggest customer — grocery chain Cub Foods — that the cottage-cheese maker was experiencing “supply chain issues.”
Cub Foods’ parent company, UNFI, did not respond to a request for comment.
According to the lawsuit, Old Home has produced cottage cheese through a co-packing agreement since 2012 at a plant in Le Mars, a dairy and ice cream hub in northwest Iowa.
The lawsuit asks for a judge to award Old Home at least $50,000 in damages and enforce the co-packing agreement through the end of May.
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