Kansas City’s Top Company 2014: Shatto Milk

These days, the only way for an old-fashioned, family-owned farm to succeed in the 21st century is to think innovatively as a business while staying true to its core values, and that is precisely why Shatto Milk Company is our Top Company for 2014.

Technically, Shatto celebrated its 10th anniversary last year, but the farm itself has been operating in Osborn, Mo., since the late 1800s. After witnessing countless dairy farmers go out of business due to the low milk prices being paid by large dairy cooperatives for bulk milk, Leroy Shatto and his wife, Barbara, knew it was a matter of time before they faced a similar fate, yet they refused to give up.

In 2003, the Shattos went back to the way things were done a long time ago: bottling their milk fresh and hand-delivering it to a small group of stores in the Kansas City and St. Joseph areas. Locals were intrigued by the handsome glass bottles emblazoned with bold statement words like “Pure,” “Local,” “Family” and “Moo!” and were hooked after the first taste.

“The secret is that we do very little to our milk,” says Matt Shatto, son of Leroy and Barbara. “We do not over-pasteurize the milk, which can burn the sugars in the milk and take away from the natural taste. The fact that our milk can be from cow to store in as little as 12 hours preserves its freshness. Fresh milk equates to better-tasting milk. In addition, we take really good care of our cows. A happy cow is truly a better milk-producing cow.”

Because the cows don’t receive artificial growth hormones to produce more milk than what’s naturally possible, and because the farm is vertically integrated (meaning the milk production, bottling and product development are all done in-house), the company’s production capacity is limited to just under 200 gallons of milk per day. Suffice it to say, Leroy and Barb’s main challenge now is keeping up with the demand.

Shatto’s chocolate milk—consistently rated among the best in the world—flies off supermarket shelves. Its more unique milk flavors, such as cotton candy, cookies & cream, banana (created at the behest of a 7-year-old on one of the farm’s public tours), and root beer have developed a cult following among children and adults alike. And to say the company’s butter, cheese and ice cream are “udderly” decadent would be putting it mildly.

Shatto is a nationally recognized leader in the dairy industry based upon its product freshness, quality and packaging as well as its simple yet memorable approach to marketing. The company’s sole commercial is of Leroy sitting on a milk bucket next to one of the cows while he answers a fan letter.

“‘Dear Leroy,’” he reads. “‘Shatto Milk is so great, why not share it with the whole country? You could franchise your business. Shatto Milk would be everywhere. You’d be rich and famous. What do you say?’ … Rich and famous? No thanks!”

“At this time, we are 100 percent focused on serving only the Kansas City and St. Joseph markets,” Matt explains. “We are much too small and our focus is much too narrow to ever consider national distribution.”

Although Shatto has received countless accolades for its product innovations, its environmental stewardship and community service are what earned the company the coveted Small Business of the Year for the State of Missouri and National Small Business of the Year Runner-Up awards in 2006.

In addition to offering incentives to shoppers who return empty Shatto bottles to local grocery stores and switching from paper towels to reusable washcloths during the milking process, the company partnered with Peculiar, Mo.-based Elmwood Reclaimed Timber to use its leftover sawdust as natural bedding for the cows. “It helps a local company get rid of their waste and allows us to repurpose a product vs. buying something new each time we need updated bedding,” Matt says.

L to R: Leroy Shatto, Roger Anderson, Barb Shatto, owners & operators of Shatto Milk Company, our Top Company of 2014.

Shatto has partnered with more than 50 local charities, from Harvesters and the Humane Society to the Special Olympics and Ronald McDonald House Charities, as a way to give back to the very community that helped it survive in hard times.

“Eleven years ago, we made the decision to bottle our own milk because we could not make it any longer selling in bulk like most dairies do,” Matt says. “The community has been very kind and supportive of us, thus we want to do all we can to give back and be supportive of them.”

Read about the rest of our Kansas City Top Companies winners!