90 years of Washtenaw Dairy
Owner Mary Raab on the secret of the local ice cream shop’s success
—By Kate Levy
“I feel like I am walking into an authentic, old-school ice cream parlor that takes me back in time. I always leave with a smile on my face,” Maddie, a sophomore at U of M, says about Washtenaw Dairy.
Washtenaw Dairy has run a steady, successful business since 1934, delivering dairy to local Ann Arbor communities, serving their delicious donuts, and offering large scoops of unique, creamy ice cream flavors. What’s their secret? Here, Mary Raab, owner of the Dairy since 2016, shares her experience running her family-owned business.
The history
The long running business began in 1934 with the Laubengayer’s, a German family who arrived in Ann Arbor with the mission to sell and make dairy products. Mary’s uncle, Doug Raab, worked at the ice cream parlor beginning at age 14 for the Laubengayer’s. In 1973, when the Laubengayer family decided to retire from the shop, Doug Raab and Jim Smith II, both longtime employees, took over the business. In 1994, Jim Smith II passed away, leaving Doug with full ownership. However, in 2001, Jim Smith III, Jim Smith II’s son, bought 50% of the Dairy.
Years later, in 2016, Jim Smith III died, leaving Doug with 100% ownership once again. Being that Doug was at an advanced age, Mary purchased 50% of the business in order to help her uncle out, but after Raab passed away, Mary was left with sole ownership. Mary explained that, though she had never worked at the Dairy, she was ready to fill her uncle’s shoes as she had gathered expertise from experience in different businesses.
Through years of hard work and loyalty from customers, Washtenaw Dairy remains a staple in the small town of Ann Arbor, with long-time residents who have visited since they were children. For years, there has always been a table filled with retired men who would call this place “the waiting room for Muehligs funeral home,” Mary said, referencing a long-running nearby funeral home nearby.
Past hardships as a small business
Running a small business, especially one that relies primarily on a warm season to serve ice cream, can be difficult. However, Washtenaw Dairy has stood out as a continuing presence in Ann Arbor. They have been through many difficult challenges, including the threat of Covid to small businesses in 2020 and 2021, when 60% of small businesses in Washtenaw Country lost half of their revenue. How did Washtenaw Dairy manage to survive this difficult time?
“There was no road map to Covid. It was really, really tough,” Raab said. She had no idea what to expect or how to prepare for what was happening.
With people rarely leaving their homes to get ice cream or donuts, schools and local restaurants, and coffee shops closing, Raab feared for the future of the businesses. There were no more big events for the donuts to be catered to. Delivering dairy products is one of their main sources of income, and all of the local buyers shut down their businesses.
The once-popular local coffee chain, Espresso Royale, was one of the Dairy’s biggest customers, with 8-10 stores nearby needing their dairy products. However, they unfortunately closed at the beginning of Covid, leaving the Dairy without their biggest delivery customer. Nonetheless, a local Ann Arbor bank aided with Payroll Protection Program loans, and with cash reserves to fall back on, Raab explained that she never saw their business shutting down, only navigating through the unknown that Covid presented.
Moreover, they were still able to carry through with their deliveries to local senior living facilities, which was very successful. They also decided to stock more supplies needed for a home kitchen in the front of the store for curbside pickup, expanding the business. They stocked up on more eggs, butter, and cheese for customers to buy.
Above all the hardships, Raab never thought once to lay off a single employee. Everyone remained on their team, reiterating the value of community Washtenaw Dairy shares.
The secret
“The Dairy is always about the constant community aspect. Being the constant community partner and community resource,“ Raab proudly said. Through all 90 years and every up and down, nothing would have helped them make it through this strong if it wasn’t for the Ann Arbor community.
There is a unique social atmosphere present here. Customers are hit with a wave of nostalgia upon entering the old-school ice cream parlor, whose friendly and welcoming staff are genuinely happy to serve them. With a red lit-up “soda” sign and vintage images of past employees and awards in newspapers from years ago, this place truly takes one back.The air is permeated with the unmistakable scent of sugar and vanilla, welcoming customers to indulge. Raab iterated that the customers she serves both come from a pool of kids and college students, and also long-time customers that have been coming in for years. She even told me that a couple got engaged in the Dairy, showing the true meaning it has in this community.
Giving back to the community
Why does the surrounding community care for Washtenaw Dairy so much? Well, it’s because of the effort the Dairy community gives to their customers. “We will do everything we can possibly do to continue to deliver on the promises we’ve made to the community,” Raab said. This is a business that delivers on their promises to those that need their help. Here’s a great example of this selflessness: After power outages last year due to a winter storm, Washtenaw Dairy stepped up to deliver dry ice to surrounding community members. According to a recent article published by the Michigan Retailers Association, people congregated in front of the store to get ice for their homes. Even with this high demand and added labor for the employees, who sometimes drove over 100 miles to outer parts of Michigan or Ohio and back to retrieve the ice, Washtenaw Dairy never raised their prices. They solely cared about getting the community back in good shape.
Washtenaw Dairy’s future
Another feature of the Washtenaw Dairy is their ability to adapt to new cultural changes throughout the years. Even with a nostalgic atmosphere, there are still features that appeal to new generations.
Whether it was adding homemade donuts to their menu, frozen yogurt when it was popularized, adding vegan or non-dairy products, or even a selection of wine, they always make it out on top. They are most proud of the fact that they made it through all supply chain challenges in the 90 years since they have been open because they kept adding new innovations. “We always need to keep revising and updating, and trying new things,” said Raab.
One of the challenges Raab notices now is the lack of business they receive in the hours between 10 AM and 12 PM. Raab and her fellow workers’ goal for the future is to figure out a way for customers to be interested in coming into the Dairy during these hours.
All in all, Washtenaw Dairy is built upon the foundation of community and family, and Raab is determined to keep her employees part of the family as she aspires “for the same scenario of my uncle taking over as an employee of the Laubengayer’s to repeat with my employees now.”
Feature Photo: Outside of Washtenaw Dairy in Winter 2024, by Kate Levy