New Barn Turns Profit at Dakin Farm

Dakin Farm maple sausages and cob-smoked hams and turkeys aren’t sold in grocery stores anywhere.  Neither are their cheeses and maple syrups.  In fact, no Dakin product is sold off a retailer’s shelf unless it’s Dakin Farm, Ferrisburgh or a branch of Dakin Farm, S. Burlington.  So how can this small Vermont business be racking up an average sales increase, since 2003, of $500,000 a year?  For that matter, how did Dakin Farm eclipse its former status as a country store and become a nationally-known business grossing $6 million a year? 

Dakin’s owner, Sam Cutting IV, would tell you it’s all about efficiency, marketing, and the new building, a big, red barn sitting a few yards from the original Dakin Farm.  In fact, the red barn is a two-story, state-of-the-art distribution center, and it has been pivotal to Dakin’s transformation.  Prior to its construction in 2003, Cutting says a good year meant they could build an extra room or bring in another tractor trailer to handle the need for increased space. 

At that time, Cutting believed a national mail order business would be the key to Dakin’s future, and he was attempting to move in that direction.  By the time he had 14 tractor trailers sitting on the property, Cutting was feeling the squeeze.  “We were totally hitting our heads on the ceiling of capacity, and we couldn’t continue to grow,” Cutting recalled.  Consolidation was paramount, and it clearly needed to happen under one roof. 
 
“When I realized we couldn’t handle continued mail order growth, I started talking to different consultants about what it would take to build a distribution center,” Cutting said.  “They told me $2 – 2 ½ million, and it just blew me away.  I actually looked at abandoning the direct marketing business, even though it was my life’s dream, because I didn’t think I could ever borrow that kind of money.” 

Cutting opened several temporary stores and even considered building a second store in Manchester, Vt.  But neither option supported his goal of getting products out the door in mass volume.  To establish  Dakin Farm as a national mail order business, Cutting needed that new building. 

Finally, he talked to a lender who suggested it might be a go if the loan could be guaranteed by the U.S. Small Business Administration (SBA).  Cutting ran the numbers with his CPA and found that a $2 ½ million loan translated into a daunting mortgage payment of $150,000 a year. 

“The mortgage payment was intimidating, but my CPA convinced me $150,000 a year isn’t that big a deal if you’re growing your business by millions of dollars,” Cutting said.  “Which the new building gave us the capacity to do,” he added with a smile. 

With an entrepreneurial nudge from his CPA, he applied for the loan.  “The whole financial model was beginning to make sense to me,” Cutting said, “and most importantly, it made sense to the SBA.”

In April, 2003, Sam Cutting received 504 loan approval from the SBA and during that same month, began excavation for the new building.  Three months later, Dakin Farm held a grand opening for its 14,000 sq. foot distribution center. 

In terms of efficiency and growth, 2003 was a watershed year for the company.  Prior to that year, Dakin’s gross annual sales were around $3 ½ million.  After 2003, sales took off and today they’re nearly double that at a cool $6 million a year.

No longer do Dakin Farm employees need to fill orders by chasing them down in small totes and stacking boxes in dark alleyways for packing.  “I remember one company order for eleven items in a picnic basket,” Cutting said.  “We had to bend over 11 times for each basket, and they ordered 1,200 baskets.” 

Innovative interior design not only made a difference in the work lives of  Dakin employees, it saved money and provided a means for growth.  The distribution center’s most prominent features are 14 well-lit packing stations on the 2nd floor, each equipped with a butcher block table and packing supplies.  Arranged along a stainless steel conveyor belt, the packing stations connect with a product selection unit where employees can easily pull Dakin products from flow-through racks, place them in boxes and send them on.  Specialties like Pure Vermont Maple Syrup, cheese and smoked meats plus freezer products like sausages, cob-smoked turkeys and spiral-sliced hams are located a few feet from the packing stations. 

According to Cutting, his employees can process up to 5,000 packages a day during Christmas season.  Following a pass through packing and shipping, each package travels by conveyor belt to a ground floor cooler to await transportation and delivery.  The ground floor is also the receiving area for incoming supplies, which are lifted to the 2nd floor on an elevator with a load capacity of 4,500 pounds.  Also located on the ground floor is a 1,500 sq. foot, walk-in freezer. 

Commenting on the building’s two-story design, Cutting said, “Most distribution centers are built on one level, but because we’re on a scenic corridor here, we built a barn structure to fit into the landscape.  We’re also on a narrow piece of land, so we had to be compact in our design.”

With room to grow, Cutting immediately took measures to expand the mail order portion of his business.  He initiated the use of a cooperative database to match profiles of existing buyers with those of new customers.  It paid off, and Cutting now uses 3-4 cooperative databases a year.  “Even though there was a postal increase last year, I increased catalog circulation dramatically because I had faith in them,” Cutting said. 

Cutting also tried “pay per click” advertisement on the internet.  By purchasing certain keywords, he ensured their appearance, complete with a link to Dakin Farm, at the top of internet search lists.  “The web has been a huge part of our growth because there’s not only organic search where people find us just by typing in “Dakin Farm” or “smoked ham” or something, but also generic words like ‘gift basket,’” Cutting explained.  “We buy certain search terms where we might pay $500-$600 a day during peak season, but we get our money back 20 times over.” 

Not bad for a kid who used to sell apples off the front porch when he was six years old.  Cutting says his father, who bought Dakin Farm in 1960, used to loan him $40, take him to an apple orchard where he’d buy 14 bushels of apples, and bring him back to the front porch of Dakin Farm.  Cutting sat there all day, polishing, bagging and selling apples.  “By the end of the week I’d have $80 and I could pay him back and keep $40, so my father got me hooked on retail at a very young age,” Cutting explained with a laugh. 

Cutting also cultivated a love for “sugar on snow” when he was a boy.  In the tradition started by his father, who still works at Dakin Farm, Cutting holds annual Sugar on Snow parties, which are coming up on March 22nd, 29th, and 30th at both retail locations in Ferrisburgh and S. Burlington.  Like other things at Dakin Farm, the tradition has expanded to include a pancake breakfast served with bacon and fresh maple sausage or sausage hoagies cooked in sap for lunch.  For more information, visit dakinfarm.com.