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Larry Peter has as much personality as the cheeses that once made Julia Child melt. He once sold cheese out of a woodshed he built next to a schoolhouse he bought from Sonoma High School for a dollar and now he owns a 113-year-old facility — three city blocks in the heart of Sonoma County — that he bought in 2004 when the original cooperative shut down after 91 years.
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He has never had a broker. Never had a distributor. Now he sees AI agents as the key to getting more real cheese and butter to the people.
As a result, he’s got something else, much to his surprise: a company that runs on artificial intelligence.
The man who rode a bicycle to buy a dairy
Larry Peter grew up in Sebastopol picking prunes, grapes, and raspberries to pay for school clothes and bicycles. His father worked a green chain at a lumber mill for 40 years and never stopped talking about the dairy farm that he wished he’d raised his kids on.
Larry got his first taste of the industry in high school, washing bottles and feeding calves at Miller’s Dairy for $35 a week. After graduating, he spent a decade at American Door, riding a bicycle — not driving — so he could save money. He paid cash for his first house at 18 with no co-signer, having sold his Corvette to make it happen. Then he paid cash for a second, and a third, eventually living in 15 different properties by 1985, using them as leverage to borrow against. That’s how he bought 320 acres and went into the dairy business, paying 25% interest on cows he couldn’t yet afford.
When the cow margins got tight, he started a potato operation, then a pumpkin patch. When the county told him he couldn’t run retail out of his dairy, he bought the schoolhouse and started making cheese out of it in 1995.
Then in 2004, Petaluma Creamery — a cooperative that 475 local farmers had belonged to — shut down after 91 years of continuous operation. Larry came down to buy a cream separator and ended up buying the whole facility.
He built it into something extraordinary. He supplied hundreds of Chipotle locations. He appeared on Martha Stewart. At peak, the business was doing roughly $50 million a year.
And then there was Julia Child. Before she died in 2004, he said that for years she called his white cheddar the best she ever ate. “She sat at my tailgate every single Saturday down in Santa Barbara [at the farmers market] and then she’d call and then I’d talk to her on the phone and that was right up to almost until she died,” Larry told me with pride. “She bought my butter every day. She always had my butter because my butter is real yellow.”
The creamery was still flying high going into COVID, with its cheese even served at the Kentucky Derby. But everything dried up in 2020, as it did for so many businesses. Just as Larry began to explain to me what happened, someone needed his attention. Someone outside is fixing a broken dryer on the production floor, and Larry — the founder, owner, and one-man force of nature — needs to deal with it.
That’s when his cousin, the tech-wizard business partner Daniel Peter, chimes in: “He had a series of things that all happened around the same time. There was COVID, which affected things like the customers, you know, the restaurant industries, things like that. The employees here weren’t really coming to work that much.”
But there were major personal difficulties. Larry’s father passed away, and just a month after that he had his own scare, undergoing an open-heart surgery that lasted for eight hours.
Petaluma and Chipotle discontinued their relationship in 2022 for various reasons, according to the Peters and Chipotle. The Peters stressed that this was just one of several factors, including Larry’s health and market volatility around the pandemic, that drove Petaluma to the brink of closure.
The final blow arrived in the form of a would-be buyer who offered a compelling price for the facility. Larry, exhausted and beaten down, agreed. The buyer strung him along for 18 months, promising $50,000 a month in rent that never appeared, offering new excuses every time an escrow date came and went. The failed deal blew a hole in his financing and he was in limbo, bleeding.
When the deal finally, definitively collapsed, Petaluma Creamery had 13 active accounts. That’s when Larry called Daniel.
The cousin he said he couldn’t afford
For years, Daniel visited Larry in the country and told him about his career in Silicon Valley, offering to help out if he was ever needed. Larry described his response to me: “I can’t afford this guy. I know what he makes.”
Daniel had spent 17 years deep in the Salesforce ecosystem. He’d built manufacturing enterprise resource planning systems for companies like Del Monte. He’d run Salesforce consulting practices. But when Larry finally came calling, Daniel happened to be on sabbatical. “I actually got a little burned out.”
Still, Daniel signed on as chief technical officer, then found the creamery was a business