Grassland Dairy Acquires Medlee Foods to Build Out Branded Assortment

Grassland Dairy Products has acquired seasoned butter brand Medlee Foods, which will operate under a new division called Grassland Specialty Brands (GSB), the company announced on Monday. Terms of the deal were not disclosed.

Former Frontera Foods COO and Medlee founder Albert Valdes will assume the role of President and CEO of GSB while Medlee VP of sales Joseph Valdes will head sales for the newly formed division.

“With the creation of GSB, the brand and team will bring a dedicated focus to the company’s strategic initiative started two years ago.” Trevor Wuethrich, Grassland president, said in a statement, “I am excited to see the product innovation, go to market strategies and marketing efforts from GSB for the advancement of the brands.”

Founded by former Frontera Foods COO Albert Valdes, Medlee launched in 2017 with pre-portioned seasoned butters aimed at making it easier for consumers to prepare gourmet meals at home.

The company has since expanded into vegan seasoned butters, sweet butters, and, most recently, butter sticks made with upcycled whey. Medlee products are sold in over 2,500 stores including Whole Foods, Albertson-Safeway, Meijer, The Fresh Market, Target, Harris Teeter, Save Mart and Rouses.

Central Wisconsin-based Grassland, the oldest privately held butter company in the U.S., supplies fluid milk, butter, dried milk products, milk protein isolate and specialty dairy products to industrial customers, other producers and foodservice providers. In addition to private label, Grassland has its own portfolio of branded non-GMO butter sticks, spreadable butter, grass fed butter and European style butter sold in retailers.

Grassland has been Medlee’s ingredient supplier for its butter sticks and Albert Valdes said the brand will now be transitioning all bulk butter purchases to the dairy company.

Grassland will help Medlee further expand its lines across all retail channels as well as support its move into meal kits, he added. The company will also launch a foodservice line of Medlee products.

The deal comes as retailers and consumers alike have begun to look for more branded, premium items in the dairy case. While consumers are seeking more sustainable and humanely raised animal products, they also are cooking at home more and willing to “upgrade” to products that they believe will make meals easier or taste better.

Though there are plenty of private label or lower priced butter options, increasingly retailers have found that premium products can add incremental value to the dairy set. That trend has been evident in other parts of the set, which has seen consumers willing to pay more for grass-fed, organic or plant-based premium fluid milk.

As a result of rising retailer and consumer interest, investors and large corporations are looking to early stage premium brands as investment opportunities. These deals can help emerging dairy brands who don’t yet have scale and struggle with the highs and lows in milk prices. The company faced competition from several brands who were backed by bigger pocketbooks; HC Private Investments acquired seasoned butter brand Epicurean in 2019 and just rebranded the line last year, egg and butter producer Vital Farms went public in 2020 and Land O’Lakes acquired Vermont Creamery in 2017.

“The lack of innovation in the category has created opportunities for consumers eager to have more choices other than salt and unsalted,” Valdes said. “We felt that with all the opportunities on the horizon we needed the support and resources from either a financial sponsor or a strategic partner that shared our vision and committed to helping us get there.”