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Cream of the West heads north
JAMES WOODCOCK/Gazette Staff Workers from Cereal West load equipment from the Cream of the West plant onto trucks to be moved to Harlowton.

Cream of the West, a cereal business that began operations in Billings in 1915, packed its last semi-trailer Monday to head 100 miles northwest to Harlowton.

The Bud Leuthold family, of Broadview, and Billings attorney Dave Veeder bought Cream of the West in 1987. Leuthold, his wife, Joanne, and their son, Matt, have run the business since then.

The mostly seven-day work weeks running at least 12 hours per day got old. On Dec. 13, the Leutholds sold to eight investors from Wheatland County.

"I'll be glad to see how the other half lives," Bud Leuthold said.

One of the eight new owners, Shawmut wheat farmer Dan DeBuff, said buying a small business to help out Harlowton kept his mind off a fifth-year of devastating drought.

"Instead of sitting around griping and moaning, we've been very excited all summer," DeBuff said. "It's given the whole community a positive attitude having a business come in rather than losing another one."

On Monday, the last forklift loads of a four-day move from 2795 Enterprise Ave. were piled into the semis and flatbed trailers.

DeBuff said big business doesn't work well in rural Montana because small towns lack enough housing and workers.

"The only way these small communities can hang on, I think, is to develop these small businesses," he said.

Setting up Cream of the West in Harlowton will take three or four people, he said. Once the equipment is installed, two full-time workers can run the operation.

The company is using a $38,315 "Growth through Agriculture" grant from the Montana Department of Agriculture to conduct some market research.

Bozeman-based Ripple Marketing will develop a customer profile.

"There's a lot of marketing tools out there that we want to use," DeBuff said.

When Leuthold bought the company, it had a mostly Montana customer base and only a couple of wholesalers.

Today, the cereal is sold nationwide through 25 distributors, including Sysco Food Services of Montana and Food Services of America. The cereal even sold in Paris for a while. Leuthold said revenues have increased six-fold since 1987.

DeBuff said there are 50 new marketing opportunities for the cereal.

"We're not in all the stores in America or even in the West," DeBuff said. "We're going to try to get product in all of the stores and increase sales east of the Mississippi."

Cream of the West history Over the years, Cream of the West has changed owners half a dozen times and its name several times, including the Montana Cereal Company and Western Cereal Company.When he bought the company in 1987, Bud Leuthold changed the name back to Cream of the West.Some folklore has suggested the cereal was manufactured at the Rocky Mountain College granary, now the Granary Restaurant, when it was a mill in the 1930s or 1940s. But that's not true, Leuthold said. The granary made a rival product called Green Gold Cereal.According to Huntley Project historian Charles Banderob, Cream of the West started on his parent's doorstep. When a salesman named Richard Savage delivered a part for a threshing machine, Banderob's mother fixed him some homemade cereal. Savage liked it so much, he developed a similar cereal with Russell Miller Milling Co. Savage stayed with the Billings company for a few years before moving on to Fargo and Minneapolis, where he started two or three other cereal companies.The original Cream of the West "used old boxing machines," Leuthold said. "It took them all day to do 40 cases and now we package about 60 cases (12 cereal boxes per case) every 30 minutes."

Some new products, which he wouldn't name for competitive reasons, also are in the planning stages. If they pan out, Cream of the West could increase its Harlowton workforce to five full-time employees.

DeBuff preferred to keep the sales price private.

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He said the new owners formed Cereal West LLC of Harlowton. They put up one-third of the money to buy the Billings company and raised the balance through the Basin State Bank in Lewiston.

The partners are DeBuff, Howard Robertson, of Judith Gap, Richard and Alicia Moe, Steve Moore of Two Dot and Keith Hill, Tom Horan and Tom Keating of Harlowton.

The business will sell products from a 30-day inventory until production resumes again by Feb. 1.

The Leutholds added some new lines with the distinctive colorful cowboy on the package: a Roasted 7-Grain cereal, Roasted Rolled Oats and its only snack food, Montana Crunch.

The family has somewhat different reactions to the sale. Joanne was more nostalgic.

"It's a good thing to do, but change is never easy especially when you've had a business for 15 years and it's a family operation," she said.

Bud was happy to get back to just one full-time job, raising wheat and cows.

"I have no regrets. I have taken it as far as I think I have to," Leuthold said. "I think it's time for new people to take over. It'll be a good business for those people."

Learn more about the company by logging onto its Web site: www.creamofthewest.com.

Jan Falstad can be contacted at (406) 657-1306 or at jfalstad@billingsgazette.com

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