Stearns Electric secures $1.5M USDA loan to support the state’s first whey-based distillery

The U.S. Department of Agriculture (USDA) has awarded a $1.5 million loan to Stearns Electric Association through the Rural Economic Development Loan & Grant Program (REDLG) to support the owners of Redhead Creamery in their efforts to establish an innovative on-farm distillery that uses the leftover whey from their cheesemaking process to produce premium distilled spirits. 

Redhead Creamery Spirits was established by Alise and Lucas Sjostrom and Jerry and Linda Jennissen, who are collectively the owners of the popular Redhead Creamery as well as Jer-Lindy Farms. Redhead Creamery makes farmstead artisan cheeses from the milk produced by Jer-Lindy’s herd of registered Holstein and Brown Swiss cows.

Alise, the daughter of Jerry and Linda and the redhead behind the creamery’s name, fulfilled her lifelong dream of owning a creamery when the small cheese production facility was built on the family’s dairy farm outside of Brooten in 2014. Since then, the owners have continued to hone their craft and today have an impressive portfolio of award-winning cheeses and a loyal fan following.

“We’re so thankful for all of the support we’ve received thus far,” Lucas Sjostrom said. “We only hope our customers will embrace our new endeavor in a similar fashion.” 

The new endeavor, Redhead Creamery Spirits, is the brainchild of Lucas Sjostrom, Alise’s husband. He also grew up in the dairy industry and currently serves as the Minnesota Milk Producers Association’s executive director and managing director of Edge Dairy Farmer Cooperative, serving 10 Midwestern states.

“We saw the opportunity to take an underutilized byproduct of the cheesemaking process and turn it into a value-added product that’s sustainable and unique,” Sjostrom said. “We’re creating a new value stream for our cheese leftovers currently fed to the cows.”

To do this, the Sjostroms and Jennissens have to more than double the size of the creamery building; move and enlarge the septic system serving the facility; and purchase new furniture, fixtures and equipment. The project allows the family to not only establish Redhead Creamery Spirits but also double the cheese-making capacity of Redhead Creamery and provide Jer-Lindy Farms the ability to filter and bottle milk for retail sale — all on their family farm. The total capital investment for the project is nearly $2 million and will create six full-time equivalent positions.

“This project is a huge win for the area,” said John Pantzke, business development and energy services supervisor at Stearns Electric Association. “We’re thrilled to support the Jennissens and Sjostroms in their new business venture.”

The USDA loan facilitated through Stearns Electric Association, one of Great River Energy’s 27 member-owner cooperatives, will provide critical low-interest financing that will allow the company to realize its plans and invest more in the business in years to come. Stearns Electric Association’s involvement in the USDA REDLG program is a continuation of its multi-faceted support for the commercial and industrial member-businesses it serves.

First-of-its-kind distillery

The new distillery, the first of its kind in Minnesota, will be one of only a handful in the U.S. making spirits from whey but would be the first in the world located on a dairy farm that is both filtering and fermenting its own feedstock. The filtration system allows the company to recapture the "cow water" and use it for proofing the spirits to create the most sustainable product possible.

The distillery is expected to begin production later this year with bottled spirits available as early as this fall. Initial production will include a vodka-like whey spirit, aquavit, gin and eventually “wheysky.” The whey infuses the spirits with a slightly creamy flavor which will be crafted into cocktails in the on-site tasting room once finished and paired with hand-selected Redhead Creamery cheeses to enhance the flavor.

The owners plan to continue their practice of public engagement and education by holding distillery tours once the new operation is up and running. Visitors will be able to spend a day meeting the cows, observing the cheesemaking and distilling processes and then relaxing with a drink and a cheese-focused menu at the expanded restaurant, all made from the milk produced on the farm.  

Stearns Electric Association is a member-owned, community-focused electric distribution cooperative with offices in Melrose and St. Joseph. Stearns Electric works to efficiently deliver affordable, reliable and safe energy to nearly 27,000 members in six Central Minnesota counties including Stearns, Todd, Morrison, Kandiyohi, Pope and Douglas.

To learn more about Great River Energy’s member-owner cooperatives, or to find out how you can access USDA REDLG funds for your next project, please contact Erin Sparks at 763-445-6113 or esparks@grenergy.com.