DAIRY INDUSTRY The milkman returns, and customers follow

Nostalgia, convenience and taste are fueling the comeback.
CONCORD, N.H. (AP) -- When he became a milkman in 2002, Ron Panneton knew the numbers weren't good.
Everything indicated he was jumping into a dying industry. Home delivery once accounted for most milk sales. By 1963 it was about a third. By 2001 it represented a paltry 0.4 percent. Two years later Panneton is indeed struggling -- to keep pace with demand.
Interest in his glass bottled milk is so strong that his Barnstead-based Catamount Farm is turning away customers until he and his wife add a second truck and hire their first employee later this summer. His customer list has doubled to 200 from a year ago.
It's a story repeated nationwide as dairy delivery bucks the supercenter trend and grapples with an unexpected demand that industry officials attribute to a combination of nostalgia, convenience and taste.
"I don't know why, but in the glass bottle, it just tastes so good," said Robin Hempel, a Gilmanton woman who stopped Panneton on the street recently to arrange home delivery after seeing the sign on his truck.
The fall and rise
The U.S. Department of Agriculture has tracked the steady -- and sometimes speedy -- decline of home-delivered milk since the 1960s, a fate dairy officials blame on the rise of the supermarket, better home refrigeration and longer-lasting milk.
But John Rourke, a dairy marketing specialist at the USDA, said the market has changed recently, albeit slightly. Though new data won't be available until fall, he expects to see home-delivered milk sales plateau or even increase slightly.
He said it likely is due to greater consumer interest in local and organic products, not to changes in milk consumption, which fell half a gallon to about 21 1/2 gallons per person last year, part of a decline that began in the 1970s.
Most dairy delivery companies don't raise cows or produce their own milk. Like Panneton, they often tout milk from local farms, much of it produced organically or without the use of added hormones. Such products are part of a growing natural foods market.
Branching out
This isn't the milkman (or woman) of yesteryear, and part of their success may be a willingness to branch out. In addition to cheeses, eggs and ice cream, many also offer specialty meats, breads, jams and even frozen pizza and cut flowers.
Warren Shaw owns Shaw Farm in Dracut, Mass. About 20 percent of his milk is sold by home delivery to roughly 300 customers, a service he said was kept afloat for years in part by sales of frozen meat pies.
"Over the years I've struggled with eliminating the service, but I always come up with the answer that I shouldn't do that," the fourth-generation dairy farmer said. His home delivery sales have been up 15 percent in recent years.
"As it turns out, with this new interest in this type of service, it's good that we didn't," he said. "There isn't a week where we don't have interest from some new customer."
Convenience also plays a role in the milk's appeal. Though the cost of delivery and the higher price of the milk make it too expensive for many families, more people are willing to trade money for time, said Katie Koppenhoefer, spokeswoman for the International Dairy Foods Association.
And most home milk delivery customers apparently have the money. For example, a half-gallon of whole milk from Catamount Farm is $3.85, which includes $1.50 deposit on the bottle. Delivery costs $2 per trip. Companies said most of their customers are middle- to upper-class families.
Growth industry
The bottled milk boom is benefiting big companies, too. H.P. Hood, a national dairy company based in Chelsea, Mass., has been delivering milk in New England since 1846. Today it has 12,000 home delivery customers.
"There's a lot of interest, a huge amount of interest, and we don't even advertise," said Stephen Vigneau with Hood's home delivery division.
The industry's growth also has meant more business for some dairies. Howard Hatch, owner of Hatchland Farm in Haverhill, N.H., provides milk to Massachusetts delivery companies.