Babcock Dairy is famous for ice cream, but it’s the cheese that may just be the store’s best-kept secret.
Casey Whyte and Kari Backes, managers of the Babcock Dairy Plant and Store at the University of Wisconsin–Madison, went through a year-long process with an out-of-state firm to create a comprehensive business plan to take a fresh look at different segments of their business. It was successful, but overwhelming.
Feeling like they needed assistance with deciding which parts of the business plan to pursue and where to start, they reached out to Michelle Somes-Booher, director of the Wisconsin Small Business Development Center (SBDC) at the Wisconsin School of Business.
After reviewing the research and talking with the Babcock team, Somes-Booher recommended they focus on growing Babcock’s line of mail-order cheese gift boxes.
Her suggestion felt right on target.
After all, the Babcock ice cream brand didn’t need help. It pretty much sold itself—so much so that few people seemed to know that Babcock offered anything else, including their delicious cheeses.
The state consistently leads the nation in cheese production, and Babcock was already carrying a wide array of award-winning cheeses in its gift boxes. It was the perfect gift, especially for Wisconsinites.
All that was missing was better marketing.
“We aren’t even capturing 5% of that audience” that loves cheese, says Backes.
A unique mission
A campus entity since 1951, one of the aspects that sets Babcock Dairy apart from a typical small business is its mission. As a not-for-profit under the umbrella of UW–Madison’s Department of Food Science in the College of Agricultural and Life Sciences, both the plant and the store support the department’s research, teaching, and outreach mandate.
“Our main mission is to support the department and to aid in the education of food science students going out into industry,” Whyte says. “We manufacture products to be sold to the consumer, which helps offset our costs as well as some of the departmental costs of teaching students. So, the goal is to become more financially stable to where we can provide greater assistance to the department.”
Whyte says it’s critical that the plant and the store maintain a financial reservoir for large production equipment: A single replacement piece, such as a separator that divides milk and cream, can run in the hundreds of thousands of dollars. It also helps the plant and store prevail during unforeseen circumstances such as being shut down during much of the COVID-19 pandemic, as well as planned changes like the ongoing renovation of Babcock Hall, their building located on Linden Drive.
“We need to be able to cover our operating costs without creating an undue burden to the rest of the college when something does happen,” says Whyte. “That’s why it was really important for us to develop a solid business plan that puts us in strong financial standing.”
To come up with an action plan, Somes-Booher connected Backes and Whyte with Badger Consulting, an all-student undergraduate consulting organization that offers pro bono consulting services to small businesses in Madison, and the organization’s president, Mitchell Carroll (BBA ’25).
“The Small Business Development Center has been working with the Badger Consulting club for several years,” says Somes-Booher. “It’s wonderful to see the students connect with our clients. The work they produce is extremely helpful and clients really appreciate the insights.”
SBDC is scheduled to do four projects with Badger Consulting this semester, and students check in regularly with Somes-Booher and SBDC staff on each project’s progress and scope.
Carroll, who is majoring in finance, real estate, and risk management and insurance, while also pursuing a consulting certificate, says the club just finished fall recruiting and had a record number of applicants. The club sits at around 70 members, comprised of analysts, project managers, and several board members. Housed in WSB, the group is open to all majors on campus, not just business.
“We love having people from all different majors,” Carroll says. “Consulting as an industry looks for individuals across engineering, computer science, STEM fields, and more. Because consulting is not just about business; it’s basically how you think, analyze data, and work on a problem to solve it.”
Carroll completed a real estate development internship with RBH Group, LLC in the New York City metropolitan area over the summer and will be working for J.P. Morgan this summer as a real estate corporate banking analyst. He is confident that the skills he’s gained with Badger Consulting through working with clients and leading projects, will translate well to his internship and throughout his career.
Boosting the gift box business
With Babcock Dairy, Carroll and fellow project manager Ethan Kofman (BBA ‘23) and four Badger Consulting student analysts, spent six to seven weeks meeting regularly with Whyte and Backes and researching the feasibility of growing the mail-order cheese gift boxes.
Babcock’s cheese box options encompassed everything from a simple summer sausage and cheese box to a higher-end charcuterie box with items like Gouda, smoked cheddar, honey toasted pecans, and Wisconsin-based Potter’s Crackers. They had an established e-commerce presence, but needed to better define the target customer who was going to buy these products, says Carroll.
Next, Carroll and Kofman looked at raising the visibility of the Babcock store within the campus community, particularly among students. They explored how Babcock might expand its gift box business into different geographic areas beyond Madison and conducted a pricing analysis and review of the competitive landscape. Carroll and Kofman also researched the lasting effects of COVID-19 and inflation on e-commerce, since small e-commerce businesses were hit hard by the pandemic. Their industry analysis unearthed some good news on that front: a projected $54 billion increase in corporate gift box spending through 2025.
“The main thing was they have a great product and there’s a market for it,” says Carroll. “So, they can bridge that together and broadcast it.”
Carroll and Kofman presented and delivered final recommendations to Babcock Dairy.
The gift boxes had growth potential with students, parents, and alumni, but their takeaways primarily focused on targeting alumni and possibly their businesses. Alumni had a familiarity with the brand and a built-in nostalgia for their Badger years, which made them ideal customers. Plus, many were business owners and could potentially gift the boxes to their employees. The research also showed alumni were heavily clustered in Madison, making it a promising target market. Milwaukee came out as an important secondary market, and Minneapolis and Chicago as a third.
Carroll and Kofman recommended increasing Babcock’s social media presence through Facebook, a prime avenue to connect with parents and alumni. They also saw value in the creation of a LinkedIn page for corporate alumni connections since much of Babcock’s interaction was with business students who tend to be very active on the social platform.
Carroll and Kofman also gave pricing recommendations they had researched, comparing different cheese companies with similar product offerings, and gauging their pricing per ounce.
They recommended Whyte and Backes think about ramping up the “storytelling” with their cheeses. As a custom box with Badger memories and associations for many, customers want to feel like there’s a story behind it to tell their guests, a tradition or feature that makes it special.
“In the business world today, a lot of times consumers are looking to buy products, not for the actual product, but for the mission and ‘why’ behind it,” says Carroll. “We thought that if Babcock Dairy could really find their ’why,’ it would attract a lot more consumers.”
“People look at cheese and say, ‘How could I ever incorporate that [at my table]?’” Backes says. “But in Wisconsin, we take it as, who doesn’t put cheese out at every gathering you have, right? So, making it a part of your family Thanksgiving, telling an ‘experience’ story—we are working on that piece.”
For Badger Consulting, the experience with Babcock was a positive one, Carroll says.
“Helping out a UW–Madison business was really exciting for us,” says Carroll. “We all felt very passionate about it because we tried the product—it’s great—and we just wanted to give back, to help them in any way we can. As we went along, we realized that these clients are very busy, just with their day-to-day operations alone. They have a lot on their plate. So we were honored that they were willing to have us come to give them help.”
For the Babcock team, seeing the students’ excitement and enthusiasm was fun because it brought a fresh perspective. “They just brought a light to it. It was wonderful,” Backes says.
Backes and Whyte are reviewing the students’ findings and planning their next steps for implementation.
“We are very grateful for Michelle’s help, the SBDC, and the students who helped us. We were extremely pleased with it, from beginning to end.”