Three Twins Ice Cream ceasing production in Petaluma in July

A Petaluma maker of organic ice cream sold nationwide in July plans to consolidate all production in Wisconsin, known as America’s Dairyland.

Although Sonoma County also has a long and storied history in the dairy industry, it’s less expensive for Three Twins Ice Cream to make its pints, sandwiches and sundae cones in Sheboygan, Wisconsin, where it has operated a second plant since 2014.

However, Three Twins will keep the company’s home office in Petaluma, where it moved in 2010 after getting its start five years earlier nearby in San Rafael.

Founder Neal Gottlieb said Tuesday closing the Petaluma ice cream plant was a difficult decision made several months ago that came down to the company’s high costs associated with making ice cream at the small local site.

“We couldn’t figure out a way to become profitable, while maintaining a second factory and all the associated costs in Petaluma,” Gottlieb said.

The last batch of ice cream will be made on July 12 at the 4,200-square-foot Petaluma plant where ?13 people work, including two delivery drivers. Ten production employees will lose their jobs and receive severance pay, company officials said. Three Twins has been leasing the 419 First St. local plant at a “hefty markup,” Gottlieb said. In addition, the Petaluma property sits in an area zoned for a mix of uses, so the company only can make ice cream there six days a week with limited daily hours.

The company owns the 25,000-square-foot plant in Sheboygan, a city on the western shore of Lake Michigan, and can produce ice cream there more efficiently and economically 24 hours a day, seven days a week.

“We’re producing more than a half-million gallons (of ice cream) a year. We can produce that all in Sheboygan,” Gottlieb said. “We have this plant we own and don’t have to pay rent on it. … It’s only one plant manager, one production manager.”

Then there’s the issue of wastewater, and making ice cream generates a lot of it. In Petaluma, Three Twins has to transport the wastewater to a “methane digester” for disposal, costing 11 cents per gallon.

That dumping fee quickly adds up over the course of a year, Gottlieb said.

Sheboygan has a “hefty” sewage treatment plant, he said, allowing the company’s ice cream plant to send the wastewater there.

Ingrid Alverde, economic development manager for Petaluma, said the city will continue to maintain a partnership with the company, since its headquarters will remain at ?625 Second St. with ?15 employees and two more working remotely.

Alverde wasn’t surprised that Three Twins outgrew its rented production operation on First Street.

“It’s been serving as incubator space,” she said, noting that Cowgirl Creamery started in the same spot and later expanded in the area. “Often times, Petaluma serves as an incubator for small innovative businesses and as they grow, they may or may not find sufficient space locally.”

Gottlieb started Three Twins at age 28 in San Rafael in 2005 with $70,000 he had saved. He had just gotten out of the Peace Corps. The name came from the time when he lived there with his twin brother, Carl, and his wife, Liz, also a twin.

The company moved its production to Petaluma in 2010, joining Clover Stornetta Farms, Straus Family Creamery and Cowgirl Creamery in the town where there’s been plenty of successful dairy enterprises.

At the time, Gottlieb told The Press Democrat he chose Petaluma because of the availability of skilled workers and its history as a dairy producer. In 2013, he found out about the Sheboygan site because dairy-processing equipment at the plant was set to be sold at auction. Before an auction took place, Three Twins bought all the equipment, the plant and about an acre surrounding it, Gottlieb said.

Since launching production in Sheboygan five years ago, the number of employees in Petaluma has grown, company officials said. Though successful in terms of product and distribution expansion along with annual revenue growth, Three Twins has yet to turn a profit since it started making ice cream in 2005, Gottlieb said. In addition to its sales on U.S. supermarket and specialty food store shelves, the company has eight ice cream scoop shops. It owns two of them in Larkspur and Napa, while licensing the Three Twins name to operators of six more shops at the San Francisco International Airport, in Berkeley, as well as two in Japan and two in Korea. Three Twins hasn’t disclosed annual revenue figures since it participated in Inc. 500 and 5000 national rankings some years ago, Gottlieb said. In a 2014 Press Democrat story about Sonoma County companies that made the Inc. 5000 list of the nation’s fastest-growing companies, Three Twins reported 2013 revenue of $6.7 million and was ranked No. 998 on the list.

As a sidelight, some outside the county’s dairy industry might recognize Gottlieb as the North Bay contestant on the competitive reality television show “Survivor 2016: Koah Rong.” He braved the wilds of the remote Southeast Asian island during the competition. A gritty adventurer, he’s also survived a climb up Mount Kilimanjaro in Africa and hiked the Inca Trail up to Machu Picchu in Peru.

Meanwhile, Alverde, Petaluma’s economic development manager, said there are no hard feelings that the city is losing the production site of a national ice cream brand.

“We really wish Three Twins the best and we’ll continue to enjoy their partnership,” she said. “Most likely, there will be another small company that will go into that existing space.”