High Meadow Dairy Market Analysis

Transcription

1 April 12, 2012 High Meadow Dairy Market Analysis Ann Wilkinson Origin Farms

2 Table of Contents Overview of Market Feasibility Study...2 Production Base...4 Determination of Product Mix...6 Domestic Production Base...13 Demand for Dairy Products...17 Informational Interview with Dairy Buyers...21 Competition...23 Appendix A: Conversation Summaries...40 Appendix B: Directory of Other Potential Contacts P age

3 Overview of Market Feasibility Study Sustain Floyd intends to develop a dairy processing facility in Floyd, Virginia. The dairy processing facility will utilize milk that is sourced from nearby farms, and process that milk into an array of dairy products. This study evaluates the feasibility of moving forward with that project, and what the best mix of products is for the processing facility to manufacture. Review of Production Base First, we briefly review the production base for the cows milk to be processed in the facility. The region has a long history of dairy production, with approximately 121 farms in the six county region providing an estimated 95.6 million pounds per milk annually. It is understood that milk for the facility will be purchased through one of three cooperatives pulling milk from the area. Assessment of Product Demand The market feasibility study assesses the local, regional and market demand for various products to determine the categories of products to produce. Information is gleaned from conversations with dairy buyers and distributors. This information includes pricing, overall category volume, growth potential, flavor preference, packaging specifications and delivery requirements. Information from the informational interviews was combined with market research for dairy categories and production factors on milk balancing and product yield to determine the best case product mix. Proposed Product Mix The market research determined that the best product mix would be a combination of fresh and aged dairy products, sold through both foodservice and retail channels. Product specifications are included later in this document. This product line includes: 1. Fresh Low Fat Ricotta Cheese (net weight, foodservice & retail). 2. Fresh Whole Milk Ricotta Cheese (net weight, foodservice & retail). 3. Flavored Cheese Spread Processed from Low Fat Milk Quark (for further processing into flavored cheese spreads). 4. Bloomy Rind Cheese (foodservice & retail). 5. Six-Month Aged Specialty Cheese (foodservice, deli & retail). The proposed product mix includes a combination of both fresh, short aged and medium aged products. This combination is important to insure that the processing venture has 2 P age

4 adequate cash flow throughout the operation. While per unit pricing for aged cheese is significantly greater than fresh dairy products, aged products require significantly more cash to maintain the inventory. The majority of the product mix will be manufactured at the cheese processing facility. The product mix includes cheese spreads and further processed bloomy rind cheese that will be manufactured at the proposed adjacent certified kitchen. Competition Once the product line was determined, further research was done on reviewing the competition for specific products. Information from the competitor profiles was used to fine tune the product mix and product specifications and to determine the expected prices of the various products. Conclusion From a market perspective, this project is feasible. There is strong increasing demand for cheese in the United States, and extremely strong demand in the region for locally made cheese. Unlike other food distribution channels, retailers and restaurants like to carry a wide selection of cheese products. Because of this, gaining access to the market is viable. Next Steps In the next phase, we will develop a launch strategy which determines the raw material requirements, make schedules, and expected volume. This information is required for determining equipment sizing and other technical requirements. This information will be used to develop the Technical Feasibility Study. In this phase of the project, the costs of acquiring the land, constructing the facility and operating the facility will be determined. Food safety regulations will be reviewed before the start of this phase to insure that the facility meets federal, state and local requirements. During this phase of the process, the product specifications and costing will be further refined and finalized. Further informational interviews will be held with buyers to verify potential volume requirements and pricing. High Meadow Dairy When launching a project it is often convenient to have a proposed name for the venture. This project has been referred to as High Meadow Dairy in this document. This name is only intended for use during the planning phase. 3 P age

5 Production Base The proposed facility, High Meadow Dairy, will be able to produce products manufactured from cows milk sourced from the region. The overall milk quality used to make the dairy products plays an important role in determining the final product attributes and processing yield. Overview of Production Base The purpose of this project is to develop a stable market for cow milk produced in Floyd County and in the region around it. It is understood that milk will most likely be sourced through one of three cooperatives operating in the area: MDVA, Piedmont and DFA. These cooperatives are currently purchasing an estimated 15.6 million pounds of milk per year from Floyd County dairy producers, and about 95.7 million pounds from producers in the region. At this point, no one cooperative source has been solidified. Over time, it may be possible to use milk from a combination of the cooperatives as the facility s needs expand. Milk Supply The type and variety of milk plays a determining factor in defining the product mix. The milk will be sourced from multiple farms and pooled into a common supply stream. Currently, the dairy production base is geared towards fluid or beverage milk production. It is understood that many of the producers in the production base have Holstein based herds and use a combination of pasture based and conventional production techniques. The composition of Holstein milk in approximate terms is 87.7 percent water, 3.7 percent milkfat, and 8.6 percent skim solids. 1 The milk supply typically drops off in the summer months and can be as much as 50% less than in the high season from April to May. The production base however does have a continual year-round supply of milk. Further processed dairy products, including ice cream, yogurt and cheese, have higher processing yields if the milks components have a higher proportion of butter fat and proteins. High Meadow Dairy may be able give producers incentives to produce milk with a higher processing yield by offering monetary incentives for butter fat and protein content. Milk Balancing The High Meadow Dairy project has the potential advantage of being able to source milk from one of three cooperatives. Working with a cooperative will allow High Meadow Dairy the opportunity to balance milk supplies, allowing the operation to only pull milk 1 Source, USDA Economic Research Service, Dairy Briefing Room, March 30, P age

6 when it is needed. Conversations with two of the coops, however, revealed a reluctance to deliver less than 50,000 pounds or a full load of raw milk. Therefore, before the scope of the project is finalized, further exploration of delivery options will be explored. The project team will initiate more formal discussions with the potential milk suppliers. It is understood that it is critical that a source of milk can be supplied to the plant. 5 P age

7 Determination of Product Mix It is suggested that the proposed processing facility process a mixture of fresh and aged cheese products. Cheese, beverage milk, and yogurt all require separate storage areas, because of differing temperature requirements, and separate make areas. Designing, building, equipping and operating a multi-purpose facility is very expensive. The decision to focus on fresh and aged cheese was based on the following information. 1. Domestic Demand for Dairy Products. 2. Informational Interviews with Potential Buyers. 3. Review of Competition. 4. Production Considerations. Summary of Categories Cheese It is proposed that the operation be launched as a cheese processing facility. This decision was based on several key factors that are reviewed in this document. 1. Growing Demand for Cheese. Cheese demand is increasing in the U.S. and is expected to continue to increase in the next decade. Much of the growth will come from the specialty cheese sectors. 2. Favorable Trade Dynamics. Currently, the U.S. imports about $1.08 billion of cheese per year, with the majority of cheese coming from France, Italy, Switzerland, United Kingdom and Austria. Because of the European Debt Crisis, the EU is expected to curtail many of their dairy subsidies, thereby increasing the domestic (U.S.) price of European cheese. U.S. consumers are expected to replace their consumption of imported cheeses with specialty domestic cheese. 3. Favorable Industry Structure. With many grocery products, a retail or foodservice purveyor can only carry a few brands of a certain item. However, cheese retailers and distributors like to offer their customers a broad product line of cheeses. Specialty retailers, such as Whole Foods, offer as many as 200 different brands. Therefore, there are no practices in the industry that prohibit market entry such as slotting fees, buy-back programs, or deep discounting. Indeed, the market interviews reflect a willingness to try on the part of all buyers surveyed. 4. Demand for Local. Retailers and foodservice establishments are in most cases willing to feature local products. Cheese is an easy-to-handle product that is well received by most consumers. 6 P age

8 Beverage Milk Bottling and processing beverage milk is a difficult and risky operation for the proposed start up operation. 1. Entrenched Competition. Regionally, independently operated Duchess Dairy and Homestead Creamery have a solid base of business. Homestead sells products both through retailers as well as larger-scale institutional foodservice accounts, including Virginia Tech. 2. Shelf Life and Give Away Problems. Wholesale grocery buyers will not support a new brand on the shelf and will typically require milk companies to pick up remaining milk, so that they do not incur losses on the product. This give away can be significant for start up operations. 3. Declining Demand for Beverage Milk. U.S. per-capita milk consumption is decreasing and is expected to continue to decrease in the next decade. Yogurt Yogurt purchases at the retail level are handled through the dairy case. 1. Entrenched Competition. A new yogurt faces considerable competition from existing brands, including national and regional brands. The yogurt industry is dominated by national brands including Danon and Yoplait, which dominate the market shelves. A new yogurt product that is highly differentiated (organic, goat/sheep, special fermentation, etc ) can have a chance of penetrating the market, but it is an uphill battle. 2. Shelf Life. As with beverage milk, yogurt typically has about a 40 day shelf life from day of pack. Typically, yogurt is handled through distributors and not delivered to retailers directly. So, to launch a new product it is necessary to have a coordinated marketing program with a distributor, including allowances for picking up unused products. 7 P age

9 Review of Product Line Information from various sources (interviews, competition, processing and cash flow requirements) was used to determine the product line. It is important that the operation processes both fresh and aged products to generate a steady stream of cash flow. Further, it is important for the facility to balance milk requirements within the operation. Therefore, higher fat cheeses necessitate the production of low-fat cheese products. A detailed description of the products is included on the following pages. Bloomy Rind Cheese The product lines driver will be a soft bloomy rind cheese, sold in 10 oz. wheels. The cheese will be aged on-site and sold at two weeks of age. This product will be sold in a net weight format, and therefore should be easily picked up by retailers as well as other specialty shops. This product will be a high fat content cheese, and will require additional cream, balanced by the proposed cheese spreads. This product will realize approximately 25% gross margin 2. Specialty Cheese Spreads The specialty cheese spreads will be manufactured in a proposed adjacent commercial kitchen. They will be manufactured from a low-fat quark product, a creamy fresh cheese, made in the cheese processing facility. This quark will be blended with specialty herbs and spices to create a creamy cheese spread. Like the Bloomy Rind Cheese, this will be sold in a net weight format, and have broad appeal to retail and specialty shops. This product will realize approximately 25% gross margin. Fresh Low Fat and Whole Milk Ricotta High Meadow Dairy will also produce Low Fat and Whole Milk Ricotta cheese. This product will be developed for sale through retailers, restaurants and institutional food sales. The product will utilize whey, a byproduct of the cheese making operation. The product will be sold fresh, within one week of processing. This product will realize approximately 10% gross margin. Aged Cheese Once the operation is cash flowing, and the glitches are out of the production cycle, High Meadow Dairy will start manufacturing an aged specialty cheese. This product will realize approximately 45% gross margin. 2 Gross margin is defined as the difference between sales revenue and the cost of manufacturing that product. Estimates are included to give the reader a relative scale of profitability between the products. 8 P age

10 Bloomy Rind Cheese 1. Product Description. Product is a soft surface ripened, mold ripened cheese, which has a flat cylindrical shape. The body has a near white to creamy white color and a soft texture, but not a crumbly texture. Product is ripened from the surface to the center of the cheese. Product is free of gas holes. The rind is soft and entirely covered with white mold. Product will have a minimum milk fat content of 30%. 2. Flavor. Product will have a firm texture, and not crumble when cut. Mature cheese will have a nutty flavor with a distinctive bite. 3. Packaging. Product will be wrapped in white moisture resistant food safe paper. Product will then be placed in balsa wood round carton and labeled. Label Size: 5 round label with multiple colors. Label should be laminated. 4. Label Features. a. Company Name: High Meadow Dairy. b. Address: To Be Determined. c. Ingredient Statement: Milk, Culture, Salt. d. Brand Identifier: High Meadow Dairy. e. Variety: Buffalo Mountain Bloomy (or some other fanciful name). f. Claims: Handmade with Milk from Floyd County (or other regional identifier). g. Keep Refrigerated. h. 10 oz. net weight, use gram conversion as well. 5. Milk Requirements. Cheese is made with pasteurized milk sourced from MDVA (or other supplier), a Grade A Dairy. Milk is batch pasteurized at 162 o for 15 seconds, and then cooled to o before making. 6. Culture. Product will be made with specialty cultures, to be specified later. 7. Rennet. Product will be made with rennet, to be determined at a later time. 8. Aging. Product is ripened at o for 2 weeks before sale 9. Size. Product will be sold in a round format, 6 round wheel, with an approximate 10 oz. net weight. 9 P age

11 Specialty Cheese Spreads 1. Spreads are a creamy, fresh cheese packed in a 6 oz. cylindrical container, without rind. 2. Flavors. The product comes in four flavors: Black Pepper, Garlic & Herbs, Sun Dried Tomato Basil, and Sweet Curry. It is a fresh cheese. 3. Ingredient Statement. To be determined based on final selection of flavor profile. 4. Refrigeration. Product must be refrigerated at all times between 40 o - 45 o. 5. Shelf life. Product has a 12 week shelf life from the date of pack. 6. Packaging. Product is packaged in 6 oz. tub, with printed cardboard cover sleeve. Tub has tamper resistant film seal. 7. Specialty Cheese Label Features. a. Company Name: High Meadow Dairy. b. Address: To Be Determined. c. Ingredient Statement: Milk, Culture, Salt. d. Brand Identifier: High Meadow Dairy. e. Variety: Blue Ridge Spread (or some other fanciful name). f. Claims: Handmade with Milk from Floyd County (or other regional identifier). g. Keep Refrigerated. h. Weight applied by retailer, depending, or using net weight sticker. 8. Make Procedures. a. Milk Requirements. Cheese is made with pasteurized milk sourced from MDVA (or other supplier), a Grade A Dairy. Milk is batch pasteurized at 162 o for 15 seconds, and then cooled to o before making. b. Culture. Product will be made with Chris Hansen cultures, to be specified. c. Rennet. Product will be made with Chris Hansen rennet, to be determined d. Raw Material Requirements. Product is made from fresh cheese and processed within one week of cheese making. 10 Page

12 Whole Milk Ricotta Product Specification 1. Product Description. Ricotta is a soft and creamy cheese product that can be used in baking as well as ready-to-eat application. 2. Ingredient Statement. Whey, Pasteurized Whole Milk, Salt, Vinegar. 3. Packaging Description. Product is packed in plastic tub, with clear film tamper seal on top. Product is gas flushed to retain shelf life. 4. Shelf Life. 40 days from day of pack. 5. Storage Temperature. Store between 40 o and 45 o Fahrenheit. 6. Pack Sizes oz. Tub, Net Weight. 8 units to a case oz. Tub, Net Weight. 4 units to a case. Skim Milk Ricotta Product Specification 1. Product Description. Ricotta is a soft and creamy cheese product that can be used in baking as well as ready to eat application. 2. Ingredient Statement: Whey, Pasteurized Skim Milk, Salt, Vinegar. 3. Packaging Description. Product is packed in plastic tub, with clear film tamper seal on top. Product is gas flushed to retain shelf life. 4. Shelf Life. 40 days from day of pack. 5. Storage Temperature. Store between 40 o and 45 o Fahrenheit. 6. Pack Sizes oz. Tub, Net Weight. 8 units to a case oz. Tub, Net Weight. 4 units to a case. 11 P age

13 Six Month Aged Cheese Aged Cheese Product Specification Notes 1. Product Color. Finished cheese will be about the color of butter. Product will have smooth uniform surface, with minimal holes. 2. Flavor. Product will have a firm texture, and not crumble when cut. Mature cheese will have a nutty flavor with a distinctive bite. 3. Aged Cheese Label Features. a. Company Name: High Meadow Dairy. b. Address: To Be Determined. c. Ingredient Statement: Milk, Culture, Salt. d. Brand Identifier: High Meadow Dairy. e. Variety: Little River Delight (or some other fanciful name). f. Claims: Handmade with Milk from Floyd County (or other regional identifier). g. Keep Refrigerated. h. Weight applied by retailer, depending, or using net weight sticker. Label Size: 4 x 3 label with multiple colors. Label should be laminated. 4. Ingredient Statement: Milk, Salt, Cultures, Rennet 5. Milk Requirements. Cheese is made with pasteurized milk sourced from MDVA (or other supplier), a Grade A Dairy. Milk is batch pasteurized at 162 o for 15 seconds, and then cooled to o before making. 6. Culture. Product will be made with Chris Hansen cultures, to be specified. 7. Rennet. Product will be made with Chris Hansen Naturen Plus 175, liquid rennet. 8. Product is ripened at o for 6 months. 9. Size. Product will be cut into rectangular shapes and packed in a cryovac bag. 10. Cheese will vary slightly in size and weight. Typical pieces will be 5 x 6. Cheese will also be sold in 5 pound stick. 12 P age

14 Domestic Production Base In 2010, the USDA reported that there were 9.1 million cows in the U.S. producing approximately billion pounds of milk. Of this, about one-third went into processing beverage milk and cream. The remaining milk - almost two-thirds of the milk supply - was used to produce a wide array of manufactured dairy products. Almost half of the milk supply was used to turn out about 10.4 billion pounds of cheese each year. Mozzarella has recently moved past Cheddar to become the most popular variety. Output of most varieties has grown steadily for many years, as cheese has become a staple in the American diet. Production of ice cream and other frozen dairy products totals about 1.5 billion gallons, about two-thirds of which is regular ice cream. Frozen dairy products are commonly made by fluid milk processors, although specialized plants are well established. Butter and nonfat dry milk traditionally were joint products. The cream from milk was churned for butter, and the remaining skim milk was dried for nonfat dry milk. About a tenth of the milk supply is still used this way, although more than half of the butter produced now comes from cream not needed when milk is used for fluid milk products or cheese. Production of these products has been roughly constant for many years, although their relative share of dairy product output has declined. The following table was taken from USDA, AMS data and shows the pounds of final dairy products produced. Utilization of Milk, 2010 Dairy Products Pounds Percent Butter 1, % Cheese 10, % Whey 2, % Evaporated & Condensed 2, % Dry Products 1, % Yogurt 4, % Sour Cream 1, % Cottage Cheese % Frozen Products 6, % Other 3, % Used on Farm % Fluid Milk & Cream 57, % 92, % 13 P age

15 Dairy Plants The USDA reports that there were 1,273 commercial dairy processing plants in the United States processing one or more dairy products. Wisconsin, California, and New York had 444 combined processing plants. Virginia has seven commercial dairy processing facilities including: HP Hood, LLC in Winchester; Richfood, Inc. in Richmond; Shenandoah s Pride, LLC in Springfield; Westover Dairy in Lynchburg; Whitewave Foods Company in Mount Crawford; Duchess in Rural Retreat; and Homestead Creamery in Gills Creek. The number of dairy processing plants has declined significantly in the past thirty years as a result of industry consolidation in product, processing and distribution sectors. Table 2: Number of dairy manufacturing plants in U.S. and Virginia, 1970 to 2009 Number of dairy manufacturing plants (Virginia) Number of dairy manufacturing plants in the U.S. and Virginia, , , Virginia 3, , , , , , Source: National Agricultural Statistical Service (USDA) Number of dairy manufacturing plants (U.S.) Cheese Plants In 2007, the U.S. Census of Manufacturers reported that there were 341 cheese companies in the United States, with 483 different facilities. In that year, these facilities shipped a total of $33 billion dollars worth of cheese. The U.S. Census of Manufacturers figures do not include many smaller scale processing facilities that are farmstead and may be classified as farms. Industry sources report that 14 P age

16 the number of cheese processors in the United States may be as high as 1,300 operations, with many of these processing less than one million pounds of cheese a year. The number of cheese processors in the United States has increased over the last ten years because of the growth in demand for specialty cheese. Small scale cheese processors can sell their specialty cheese at a significant markup over the cost of production. Price Differentials in Large vs. Small Plants Small scale specialty cheese plants have been able to command a premium in the market place because of their superior flavor in comparison to commodity cheese. Often times, this relatively greater wholesale price for cheese more than offsets the greater production cost of cheese for smaller scale facilities. The following example compares price/cost differentials for a larger scale facility with a small scale specialty plant. The information for the large scale facility was based on cheese manufacturing costs for 2010 as reported by the California Department of Agriculture. That report is included in the appendix to this document. Comparison of Cheddar Cheese Returns per Pound Large Small Scale Scale Plant Plant Wholesale Price $ 1.50 $ 6.25 Cheese Production Cost Milk Costs $ 1.06 $ 1.33 Processing Labor $ 0.05 $ 0.76 Processing Non-Labor $ 0.08 $ 0.21 Packaging $ 0.02 $ 0.35 Other Ingredients $ 0.02 $ 0.11 General & Administrative $ 0.02 $ 1.55 ROI $ 0.00 $ 0.05 Total Cost $ 1.25 $ 4.36 Net Return $ 0.25 $ P age

17 Small Scale Plant Summary The information for the small scale plant was based on production costs for three plants producing an average 400,000 pounds of cheese per year. This information is benchmarking data sourced from industry participants. Small scale specialty plants can typically receive about $6.25 per pound wholesale for specialty cheddar style cheese. However, it should be noted that prices for this type of product can differ dramatically, depending upon the flavor profile and overall brand awareness in the market place. Prices for U.S. specialty cheese can be as high as $18.00 wholesale for cow milk cheese. The milk cost for both the specialty cheese and the large scale operation was assumed to be $14.59 per hundred weight, which was the U.S. average manufacturing class price for Small scale facilities typically have a lower manufacturing yield. In this model it was assumed that the small scale plant processed 11 pounds of cheese for every 100 pounds of milk, resulting in a yielded milk cost of $1.33 per pound. In contrast, the California Department of Agriculture reports that the cheddar cheese yield for 2010 was pounds of cheese per hundred weight of milk. One of the options that will be explored in the economic modeling phase of the project is developing a level payment plan for milk. One of the general criticisms of the existing dairy industry is milk price volatility at the farm gate. It may benefit the manufacturing operation, as well as the farmer suppliers to the venture, to have a fixed price payment system. This will be further explored. Smaller plants typically have greater labor cost per pound because the cheese is processed in smaller scale vats and moved by hand through the cheese making process. Small scale plants will have higher packaging costs as they typically market their product in retail packaging, as opposed to the 40 pound blocks which are typical of large scale cheddar plants. Margins for Specialty Cheese The price/cost differential is typically greater for specialty cheese, compared to other sectors of the dairy industry including yogurt, ice cream and beverage milk. 1. Consumers are willing to pay more per pound for cheese relative to other dairy products. 2. Specialty cheese can move through several types of distribution channels, including restaurant, retailers, specialty cheese shops and farmers markets. Prices received in the specialty sectors are often greater than for like products sold through traditional retailers. 16 P age

18 Demand for Dairy Products It is suggested that High Meadow Creamery focus their effort within a growing segment of the dairy industry. U.S. consumption of dairy products has been increasing over the past twenty years. The following table illustrates per capita consumption of dairy products on a milk equivalent, milk fat basis. While the overall per-capita consumption of dairy products has been expanding, percapita consumption of beverage milk has been declining. Beverage milk includes whole milk, low-fat milk, non-fat milk and flavored milk. Most of the decline in beverage milk consumption can be attributed to a dramatic decrease in the consumption of whole milk. The mix of light, skim and reduced fat milk products saw an increase in their consumption but not enough to offset the overall downward trend in all beverage milk. Changes in relative pricing, advertising and overall consumer education programs have largely shaped this trend. The trend of food consumption away from home is also shaping this decrease in milk consumption. Although the percentage of Americans eating breakfast has remained steady, the use of cereal with fluid milk as a breakfast food is declining because fewer people now eat breakfast at home. At the same time, there is an exploding soft drink and juice drink industry with major breakthroughs in easy-to-use packaging. Sports drinks, 17 P age

19 juice, bottled water, and more options in the beverage market are creating greater competition and are offering more choices for consumers. Per-capita consumption of frozen dairy products has been declining in the last ten years. The category includes ice cream, frozen yogurt and sherbet. In 2009, the USDA reported that the production of ice cream and other frozen dairy products totaled about 1.5 billion gallons, about two-thirds of which was regular ice cream. Frozen dairy products are commonly made by fluid milk processors, although specialized plants are well established. 18 P age

20 Growing cheese demand has been one of the most important forces shaping the U.S. dairy industry. Per capita cheese use is twice the level of 25 years ago and shows no signs of leveling. Growth is expected to reach 38 pounds per person by Most of the cheese consumed in the United States fits into two broad categories: American types and other-than-american types. The American category comprises four varieties of cheese: Cheddar, Colby, Monterey and Jack. The other-than-american types are primarily Italian varieties such as Mozzarella, Parmesan, Provolone, Ricotta, Romano and others) but also includes Hispanic, Swiss and other varieties. Cheese sales and consumption are influenced by many factors. Among them are: the availability of more cheese varieties, expanded cheese use by fast-food and pizza restaurants, increased use of cheese as an ingredient by both food manufacturers and home cooks, and increased consumption of cheese rich ethnic foods such as Italian and Mexican dishes. Per-capita consumption of butter has been increasing steadily in the last eight years. Growth in demand has been fueled by increasing sales of specialty butters and an increased acceptance of butter as a source of fat in the diet. Since the late 1990 s, an increased consumer awareness of the health concerns connected to trans-fats present in margarine and shortenings has increased consumer s acceptance of butter as an alternative. 19 P age

21 Per-capita yogurt consumption is about 9 pounds a year. Yogurt consumption has continued to increase in recent years because of the growth of high-protein Greek-style yogurt. 20 P age

22 Informational Interviews with Dairy Buyers Interviews were held with dairy buyers involved in the purchase of beverage milk, yogurt, ice cream and cheese. Conversation summaries are included in Appendix A, on page 40 of this document. Informational interviews were held over a three week time period with buyers from several retail and foodservice distribution companies that have a presence in the Southeastern trade area. These buyers included: Kiva Shogren, the lead dairy and buyer with UNFI, a retail distributer servicing 23,000 retailers nation-wide; John McHugh, Cornucopia Cheese, a cheese distributor servicing 500 retail and restaurant accounts in Virginia and North Carolina; Bradley Hunter, the cheese buyer for EarthFare, a chain of 16 natural food stores in North Carolina, Tennessee and Kentucky; and Kimberly Triplett, the lead regional buyer for Bon Appetit Management Company, a foodservice distributor providing product into area colleges and institutions, including American University, Gallaudet University, Oracle Corporation, Duke University and University of Maryland, Baltimore. Overall, all of the buyers were enthusiastic about supporting a Virginia-made cheese product. Most stated that their final decision to purchase the product would be based on the products overall flavor, price and availability. Cheese Style. Several of the retail buyers noted a preference for soft cheeses, including bloomy rind cheeses. They noted that these cheeses moved quickly off the shelves and there were not many local offerings of this type of product. When prompted about a brie style vs. a camembert, many of the buyers had no preference, although some suggested that they already had enough brie style varieties. Several of the foodservice distributors, unprompted, mentioned a need for a high-quality ricotta cheese product. This product was also popular with restaurants and specialty retailers. A few of the chefs servicing institutional foodservice operations mentioned that it is easier to source local products that can be used as ingredients in entrees, as opposed to specialty cheese, that will typically only be used on catering menus or on feature entrees that are used intermittently. They mentioned that they were held to a quota on locally sourced product because of pricing, and that it was easier to bring in something that they would use consistently as an ingredient. A few of the retail distributors indicated a desire for a locally made Mozzarella, but were reluctant to pay significantly more for a locally produced product. 21 P age

23 Some of the distributors, unprompted, indicated that they did not need another goat cheese in any format. Many of the buyers noted that they would try anything, as long as it had a great flavor, and were open to both aged and fresh cheeses. Shelf Life. Shelf life will be an issue with carrying any fresh product. Several of the buyers noted that the longer the shelf life of the product, the easier it was to gain distribution. Tamper Resistant Packaging. Several indicated a requirement for tamper resistant packaging for tub-pack product. This would include a barrier film inner seal. Focused Product Line. Several of the buyers advised to focus on a limited product line and do two or three products very well. They noted the importance of consistent delivery of each type of product over the year. Bulk Sales. Many of the distributors carry bulk product for delivery to retail, for cutting and wrapping at the location. They mentioned the need for small label inserts with this type of product that could be place on the product at the time of cutting and wrapping on location. Food Safety. Several of the institutional buyers (Bon Appétit, Atlanta Foods) geared to local sourcing on a larger scale indicated the need to have food safety programs, including an HACCP plan and GMP s in place prior to approaching them. Estimated Volume. It was difficult to get quality information from any of the buyers on total dairy category, or total cheese or total milk volume used, as this is considered proprietary information. Next Steps on Interviewing. The next step will be to develop sell sheets, or specification sheets for each of the proposed products. These sheets will include the company contact information, preliminary logo and the product specification information made into an attractive sell sheet in pdf format. These sell sheets will be ed to potential buyers with proposed pricing information, and follow up interviews will be scheduled to discuss volume, pricing and other issues. 22 P age

24 Competition High Meadow Dairy will sell its cheeses to restaurants and retailers, through a distributor relationship. The cheese will move from the processing facility, to a distributor, who will take possession of the cheese and ship it to individual retailers and restaurants. As the business expands, additional distributors will be added. The cheese industry is competitive, with purchases made on the basis of price, flavor and other factors. However, the degree of competitiveness is much less than other sectors of the food industry. The venture should be able to market and distribute its cheese with minimal project risk. None the less, it is important to monitor other cheesemakers activities (prices, type of cheeses produced, labels, suppliers, distributors, etc.) to keep up with competition in the marketplace. In addition to the local suppliers, there are regional, national and international cheeses that are usually present in the same marketplace, making it a challenge for a cheese to compete. Of course, quality is the key for success; quality ultimately being defined by the consumer. Review of Potential Distribution Outlets There is a large amount of direct competition for High Meadow Dairy. Cheese-making is an international business with many potential competitors. The fact that High Meadow Dairy is a local cheese facility with the specialized culture of central Virginia helps distinguish it from the global competition. The market for cheese sales remains a fragmented, multi-national, and informationintensive market. The cheese industry globally contains both large cheese companies and small family farmstead creameries. No single cheese marketer has more than one percent of the world cheese market. This is different from other food products and beverages, which are dominated by a few extremely large firms. Whole Foods. The only local cheeses present are two from Meadow Creek Dairy (see next sub-section for more details on the cheeses and the creamery). The buyers for the cheese section at Whole Foods are open to receive more local cheeses. They also mentioned that there will be a local seasonal goat cheese from Caromont Farm. Food of All Nations. Amy Worrell is the cheese buyer. There is a section for U.S. cheeses and another for foreign cheeses. The U.S. section is smaller than the foreign one. The local cheeses present are from Mountain View Farms, Meadow Creek Dairy, Oaks Spring Dairy and Marshall Farms Corner. The minimum sale per month required for a cheese to be present at this store is 20 pounds. They are open to receive local cheeses and offer to do tastings and participate in promotional events with other foods. They are 23 P age

25 interested in cheeses that taste and look different. Conner can sell directly to the store or via a distributor (Food of All Nations operates with the distributor Euro U.S.A.). The cheese buyer said that if a cheese at their store retails for $16.00 per pound, then the wholesale price would need to be between $8 to $10, including delivery. A classic specialty cheese present is Pleasant Ridge Reserve which is sold wholesale between $ per pound. Feast. Feast is a restaurant and specialty grocery store. Dave Kostelnik is the Purchasing Manager. They offer nine farmstead local cheeses of which three are cow milk cheeses including Meadow Creek Dairy s Mountaineer made with raw cow's milk at $18.80 per pound. They also sell a Gouda cheese for $22.50 per pound. Inventories are kept small and work with weekly deliveries from suppliers. Tavola. Tavola is an Italian restaurant that indicated interest in local cheeses, though prices are of concern. The cheeses they buy are mozzarella, parmesan and ricotta. The owners consider imported cheeses cheaper than locals. Market Street Market. Their best selling cheese is a Tillamook extra sharp cheddar cheese at $12.00 per pound. Another example is Kerrygold Dubliner imported from Ireland at $1.99 per pound. They are open to trying new cheeses including local varieties. They mention consistency and guaranteed sales as requirements. C'ville Market. Located in Charlottesville, C ville Market is managed by Ed Morton. They stock some local cheeses, though their customer demographics lean towards lower income, less discerning and more price-conscious consumers. They offered cream cheese in plastic tubs at $4.99 per pound as well as an 8 ounce Organic Valley cream cheese retailing at $3.79. An imported brie retails at $9.99 per pound and sells very well according to the manager; a double/triple cream imported brie retails at $13.00 per pound. The manager mentioned that if a cheese retails at $10.00 then it wholesales around $6.00 Review of Virginia Cheese Companies The local cheese industry in Virginia is thriving. The State has approximately 25 local cheese makers, who distribute their product through a variety of channels. Leading local competitors include: Mountain View Farms; Fairfield, Virginia Meadow Creek Dairy; Galax, Virginia Everonna Dairy; Rappidan, Virginia Simply Cheddar; Waynesboro, Virginia Caromont Farm; Esmont, Virginia Goats-R-Us; Blackstone, Virginia 24 P age

26 Monastery Country Cheeses; Crozet, Virginia Lovers Retreat Dairy; Saluda, Virginia Blue Ridge Dairy; Leesburg, Virginia Green Haven Farm Cheeses; Woodstock, Virginia Sterling Bridge Dairy Farm; Willis,Virginia Mountain View Farm ( Located about 20 miles southwest of High Meadow Dairy, their slogan is "fresh from the fields." It is a 250 acre dairy farm with 120 Holstein, Jersey and cross-bred cows. There are no added hormones or antibiotics. The webpage is basic and the address does not have the same domain as the webpage. There is an order form option for internet sales. The web-page has a list of outlets for their products with some detail. All of their farmstead cheeses are made using raw milk from their dairy herd, cultures, rennet, sea salt as well as various herbs, spices, and peppers. They produce farmstead cheese and make raw milk aged cheeses, fresh cheeses, butter and a variety of other dairy products. The current retail price of Mountain View "Lusk- Gouda Semi Soft - Raw Milk" cheese at Foods of All Nations is $16.00 per pound and the product is sold by the pound. Approximately half pound cuts are packaged in clear plastic wrap (see picture). The Cheese Buyer, Amy Worrell indicated that the wholesale price would be approximately $8 to $10, including delivery at Foods of All Nations. There is also "Mountain View McClure Raw Milk - Baby Swiss" at the same retailer at $15.00 per pound, also sold by the pound in cuts of approximately 0.7 pounds. Meadow Creek Dairy ( This operation is a family farm in the mountains of southwest Virginia about 170 miles from High Meadow Dairy. The firm has been farming since 1980 and uses, as a distinct element, their location being "at 25 P age

27 an elevation of 2800 ft, the combination of pure water, clean air and deep soils produce an ideal environment for growing diverse, mineral-rich pastures." ( With their Jersey herd, they produce flavored, healthy, ecologically friendly cheese. As an example, the creamery produces Grayson which is a washed rind cheese made with raw milk. This cheese is based on the soft Italian cheese Taleggio. Grayson is robust in aroma with distinct earthy, meaty, and rich flavors. The price for half a pound is $11.00 at a cheese and wine store in Arlington, Virginia Cheeses from this creamery were found at Whole Foods and Foods of All Nations, both in Charlottesville. At Whole Foods there are currently two cheeses, one of which is "Meadow Creek Grayson" made with raw cow's milk, cultures, salt and rennet. The price is $21.99 per pound. The product was sold by the pound in cuts of approximately 0.20 pounds packaged in clear plastic wrap (see picture). The other cheese is "Meadow Creek Appalachian Tomme" made with unpasteurized cow's milk, cultures, salt and rennet. The price is $19.99 per pound. This cheese was presented in cuts of approximately 0.20 pounds packaged in clear plastic wrap. The webpage is not updated. However it provides a list of stores and wholesale information. They are on Facebook as well, with 225 fans. They present their products in competitions such as the Good Food Awards. Everona Dairy ( Established in 1998, this operation is located about 80 miles northeast of High Meadow Dairy. Their presentation uses elements that refer to its location: "We make several aged sheep's milk cheeses in the Piedmont of Virginia. The Piedmont region of Virginia is in the foothills of the ancient and beautiful Blue Ridge Mountains. Everona is atop a limestone ridge with its delicious sweet water, and is 26 P age

28 covered by the rich red Piedmont soil that grows lush and tender grasses." The webpage is simple and it is possible to order product. They have a newsletter that requires subscription. They have clear information on the farmers market locations that sell their products. The creamery is open to visitors. At farmers markets, wedges are priced by weight and tend to run in the $12 to $18 range for 1/4 to 1/3 of a pound. According to an internet article, ( "Dr. Elliott's passion and the story behind her entry into the world of cheese making stand out and make Everona Dairy a local producer I'm happy to support." The key words passion and story are used for this venture. Their Piedmont raw sheep s milk cheese is a best seller and award winner for Everona. Also, the creamery just launched Blue Ridge cheese which is a soft, spreadable, almost liquid center inside and is ideal for eating on bread or crackers. It is highly perishable and only available in limited quantities. Simply Cheddar ( Simply Cheddar operates a retail store front located in Waynesboro about 10 miles north from High Meadow Dairy. According to the owners, Simply Cheddar sells a cheese ball made with only the finest aged extra sharp cheddar cheeses without using any processed or cream cheese. It has only a little onion for bite and fresh chopped pecans on the outside for crunch. It is possible to order by or buy at 20 different outlets in Virginia. Simply Cheddar sells its cheese in several sizes: 8 oz, 12 oz and 16 oz sizes which retail for $8, $12 and $16 respectively. These prices do not include shipping costs. They freeze well, so ordering several and freezing what is not used immediately is advisable. Source: communication with the owner Linda Weaver. Caramont Farm ( is located in Esmont, Virginia, approximately 45 miles east of Stuarts Draft. Cheesemaker Gail Hobbs Page produces artisanal goat s and cow s milk cheeses from locally sourced milk. Fresh cheeses are sold through December and aged cheeses are sold year round. Their cheese is widely available in the Virginia area their website lists 25 restaurants, 6 wineries, as well as eight retailers including Whole Foods in Charlottesville as sales locations. Caramont also sells at farmers markets and through CSA s. 27 P age

29 Caramont s Farmstead Fresh is a pasteurized fresh chevre in the style of Fromage Blanc that sells for $6.95 per 6 ounce container. Their Esmontonian is a raw goat s milk cheese which has been aged 2-4 months. The curd for this cheese is poured into an Italian Basket mold for draining which makes its characteristic shape. Cow s milk cheeses from Caramont include Fromage Frais, a pasteurized fresh cream cheese made with no additives; and Bloomsbury, a bloomy rind cheese, aged 2 3 weeks with a shelf life of approximately one month. Caramont also sells an aged cheese called Red Row which is made from raw cow s milk. Goats-R-Us Cheese ( is located in Blacksburg, about 140 miles from High Meadow Dairy. They are an all natural dairy goat farm, and cheeses are made onsite. They do not have their own website but have a page on the Rural Virginia Market site and a Facebook page with 86 followers. They offer many varieties of flavored chevre including Chives and Garlic, Dill and Garlic, Natural, Pineapple and Walnut, Roasted Red Pepper, Hot Pepper, Peppercorn and seasonal flavors (Orange Cranberry and Pumpkin), all in 4 ounce containers. Occasionally, they produce some raw aged cheeses, feta and ice cream. Goats R-Us Cheese is sold at Whole Foods, at area farmers markets in the Richmond and Fredericksburg areas and through local wine stores and co-ops. They enjoy a large word-of-mouth business, and they state that they do not advertise. Monastery Country Cheese ( is produced by the Trappist nuns at Our Lady of the Angels Monastery in Crozet, Virginia, approximately 32 miles north of Stuarts Draft. The monastery s cheese industry was started in 1990 as a means of self-support using milk delivered from local area grass fed cows. The cheese is a semi-soft, mild and mellow Dutch-style Gouda available in 2 pound wheels with a bright red wax coating and black-and-gold foil label. Monastery Country Cheese is sold only at the monastery or through the mail. 28 P age

30 They do not have an online store but have a down-loadable order form on the website. Lovers Retreat Dairy ( is a small farmstead goat diary and cheese operation near Saluda, VA on the Middle Peninsula area of eastern Virginia (approximately 150 miles east of Stuarts Draft.) Their goats graze on pesticide and herbicide-free pastures and receive no antibiotics or hormones. The dairy has a small herd of Nubian and Alpine goats on the farm that are milked twice per day. They produce a gallon of milk each per day, which makes a pound of cheese. Lovers Retreat makes several different types of chevre, several flavored Fromage Blancs, and several varieties of award-winning Feta. Their cheeses are sold at Norman s Produce in Saluda, VA, at Real Food Co-op in Williamsburg, at several local gourmet shops, and at four local farmers markets in eastern Virginia. Their Flavored Fromage Blancs (Cranberry and Garlic-Chive) sell for $6.50 for a 6 oz. container through Off the Vine Market, an online shopping site ( dedicated to bringing Virginia s local foods to market. Lovers Retreat Feta sells for $9.15 in a 4 oz. container. Blue Ridge Dairy ( is a small artisanal producer in Leesburg, VA, located approximately 135 miles northeast of Stuarts Draft. Paul Stephan is the owner and head cheesemaker. Blue Ridge Dairy specializes in fresh ricotta, flavored mozzarellas and aged feta all made from fresh jersey cow s milk sourced locally. Their website reports that they use approximately 1,500 gallons of milk weekly. Blue Ridge Dairy products are sold through Whole Foods stores in Pennsylvania, Virginia, Maryland, New Jersey, Ohio, Kentucky and the Washington DC area. Their website lists nine farmers markets and eight restaurants where they sell or serve their cheese and yogurt products. All are in the D.C area and surrounding suburbs. Green Haven Farm does not appear to have a website as of yet. The farm is owned by Pamela Green and is located in Woodstock, VA, approximately 70 miles north of Stuarts Draft. Green Haven produces a variety of goat cheeses included several flavored chevres, a feta, a cheddar style and a Jalapeno cheddar style. 29 P age

31 Green Haven sells their cheeses at the Harrisonburg Farmers Market, The Market in Woodstock, and at North Mountain Vineyard. Sterling Bridge Dairy Farm is a farmstead cow and goat s milk cheese operation located in Willis, (Floyd County) VA, approximately 130 miles southwest of Stuarts Draft. They do not appear to have an operational website. Their Facebook page is limited to private friends. The farm is owned by Randy and Nancy Compton. They are a small operation producing farmstead cheeses from Jersey cow and dairy goat milk. Cheeses include fresh cheeses (Feta, Chevre, Cheddar curd and Mozzarella) and raw milk aged cheeses including Pepper Jack, Cheddar, Brick and Colby. Sterling Bridge Cheeses are at The Blacksburg Farmers Market (year round), Floyd Farmers Market (May-October), Salem Farmers Market (June-September) and at the Harvest Moon Food Store in Floyd, VA. Other Dairy Operations in the Virginia Area Two notable dairy operations are also located in Virginia. Although they do not make cheese, they are interesting artisan dairies that will be operating within the same market as High Meadow Dairy. Duchess Dairy Products ( is located at 439 Gienow Road, in Rural Retreat, Virginia. Duchess produces a line of whole, reduced fat, chocolate and strawberry milk from 100% Jersey cow s milk from their own farms. The website outlines the Jersey advantage and details the nutritional advantages of Jersey versus Holstein milk with its higher protein and calcium content. The site also outlines Duchess natural and sustainable production methods. Duchess Dairy was established as a joint venture between Huffard Dairy Farms and Sugar Grove Jerseys, to bottle milk from the two Registered Jersey herds. Huffard Dairy 30 P age

32 Farms is owned by brothers James "Jim" and John Huffard. Sugar Grove Jerseys is owned by Joey Blankenship and Danny Slemp. The partners purchased the dairy processing plant in December 2009 and began bottling their own milk a month later. Today, the dairy is operated by the Huffard, Blankenship and Slemp families, a plant manager and another full-time employee. Duchess Dairy products are found across southern Virginia in local natural, convenience and grocery stores including ten Food Lion outlets. Homestead Creamery (no website) is a small dairy, locally owned by Donnie Montgomery and David Bower and located at 7254 Booker T Washington Highway, Gills Creek, VA All the milk at Homestead Creamery comes from the owners two farms, both in their third and fourth generations of family ownership. The creamery currently processes 500,000 gallons of milk annually. The milk is free of hormones and antibiotics. The farm is not certified organic but they do follow organic practices and no pesticides are used. The animals are grass fed and all feed is grown on the farm. The herd is closed (meaning the animals are from within the herd). The creamery uses the term All Natural on their products. They produces three product lines: glass-bottled milks and cream, fresh-churned butter, and fresh churned ice cream which comes in 20 flavors. One large differentiating feature of Homestead Creamery s milk is that it is sold in recyclable glass bottles. They claim that the glass bottles allow the milk to taste fresher longer. The milk is available at Whole Foods Stores in the Virginia area as well as Kroger stores and Fresh Markets in surrounding areas. In 2005, the Creamery introduced a home delivery service which now consists of four delivery trucks serving 1,200 customers. With on-board freezers, refrigerators and dry goods areas, Homestead Creamery delivers its own and up to 150 other staple products, from eggs and bread to packaged meat and frozen pizzas. Homestead Creamery also has an on-farm market where they offer tours of the creamery plant and the farm. 31 P age

33 Other Cheese Operations in the Southeast Artisan cheese making is enjoying strong growth throughout the rest of the Southeast as well as in Virginia. Leading competitors from the Southeast include: Yellow Branch Farm Robbinsville, NC Chapel Hill Creamery Chapel Hill, NC Sweet Grass Dairy Thomasville, GA Sweetwater Valley Farm Philadelphia, TN Flat Creek Lodge Dairy Swainsboro, GA Locust Grove Farm Knoxville, TN Ashe County Cheese West Jefferson, NC Looking Glass Creamery - Fairview, NC Celebrity Dairy Siler City, NC Goat Lady Dairy - Climax, NC Sleepy Goat Farm Pelham, NC Split Creek Farm Anderson, SC Greendale Farm Madison, GA Kenny's Farmhouse Cheese Austin, KY Sequatchie Cove Creamery Sequatchie, TN Locust Grove Farm, LLC Knoxville, TN Bonnie Blue Farm Waynesboro, TN FireFly Farms Accident, MD Cherry Glen Farm Boyds, MD The following is additional detailed information on the most well-recognized of the southeastern competitors. Information on other producer/farms is available on their websites. Yellow Branch Farm and Pottery ( This family-run dairy is in Robbinsville, North Carolina approximately 400 miles southwest of Stuarts Draft. With Jersey cows, they produce Yellow Branch Farmstead cheese made from unpasteurized milk. The dairy is pasture-based, and the pastures and hay fields are managed using sustainable, organic practices. No herbicides, pesticides or chemical fertilizers are used. Growth hormones are not used and antibiotics are used therapeutically and only as a last option. Yellow Branch is the name of the small creek that flows down the valley and empties into Fontana Lake. The webpage is simple, and the pictures are good indicators of the characteristics of the place. The dairy is open to visitors and they offer mail orders through the webpage. The prices of the farmstead cheese is $11.25 per 32 P age

34 pound, pepper cheese $11.75 per pound, basil cheese $12.25 per pound, tomato basil cheese $12.75, natural rind cheese $ They accept major credit cards and there is a 2% food tax for shipments within North Carolina. Cheeses are shipped Mondays and Tuesdays. They sell in North Carolina and Virginia (Mountain Run Farm). The cheese is served at restaurants and inns in North Carolina, South Carolina, Georgia and Florida. The creamery is a member of the American Raw Milk Farmstead Cheese Consortium and Slow Food USA. Chapel Hill Creamery ( processes cow milk into specialty cheese on their 37-acre farm on the outskirts of Chapel Hill, North Carolina. The operation was launched in 2001, by Portia McKnight and Flo Hawley, who began the operation after retiring from management positions at Whole Foods Market. Chapel Hill Creamery milks 27 Jersey cows and processes this milk on the farm into seven different varieties of cheese. They sold 32,400 pounds of cheese in 2010 through farmers markets, distributors and restaurants. About 60% of Chapel Hill s cheese is sold through three local farmers markets. They also distribute through Cornucopia, a regional distributor, who delivers cheese to over 100 different retail and food service accounts throughout North Carolina. Chapel Hill processes seven different varieties of cheese, including both fresh and aged cheeses. Fresh cheeses including mozzarella, camembert and farmers style cheese are sold within two weeks of manufacture. Chapel Hill also markets aged cheeses including an alpine style Swiss and a washed rind Trappist style cheese. Chapel Hill s aged cheeses include: Hickory Grove which is aged for six months. This cheese is a Trappist style cheese made with unique cultures that give it a mild, yet sophisticated flavor. Calvander is an Italian-style cow milk cheese, with a nutty flavor reminiscent of aged parmesan. Danziger is a washed rind cheese. The cheese is aged for one month and has a creamy center when finished. Thunder Mountain Swiss is an alpine style cheese. This cheese is aged for six months, and has delicate flavors of the pasture. Chapel Hill s fresh cheeses include: Mozzarella, an unflavored fresh cheese noted for its unique flavor and texture, and Carolina Moon, a bloomy rind camembert-style. Feta is their Greek style cheese which is brined and aged for two weeks. 33 P age

35 Sweet Grass Dairy ( of Thomasville, Georgia has garnered a strong following for their handcrafted cheeses since their founding in Made from grassfed cow s and goat s milk, Sweet Grass dairy s cheeses are now available in retail grocery stores, specialty stores and restaurants in 40 states. They also have an extensive online store. Sweet Grass sells eight varieties of cheese, plus gift boxes and pantry items on their website. The cheeses include: Thomasville Tomme, a raw grass-based cow's milk cheese made in the style of a French mountain Pyreneese Tomme, which sells for $7.50 per ½ lb. Green Hill is a double-cream bloomy rind cheese made from pasteurized cow's milk. This softripened Camembert-style cheese won a silver medal at the 2010 World Cheese Awards. It sells for $9.00 per ½ lb. wheel. Georgia Gouda is made in the style of a Dutch Gouda from the milk of Jersey cows. It is semi-soft with a buttery, creamy texture. Georgia Gouda sells for $8.00 per ½ lb. wheel. Sweetwater Valley Farm s website lists 25 different varieties of cow s milk cheeses including Colby, Gouda, and several varieties of cheddars and smoked cheeses. Large varieties of flavored cheddars are sold as 10 oz bars. Their Buttermilk Cheddar is sold in 10 oz. cuts for $5.00 each. Sweetwater Valley Farm ( runs a farmstead cheese operation along with an agritourism operation with a state-of-the-art facility in Philadelphia, Tennessee. Owners John and Celia Harrison have grown the operation to include a 1,000- cow dairy (soon to be 1,350), a small cheese factory, a retail store, and a 5,000-sq.-ft. event center called "The Udder Story. Sweetwater Valley Farm s on-site farm store last year sold more than 100,000 pounds of cheese to farm visitors from nearby Knoxville and Chattanooga. Farm tours were offered to 12,000 to 13,000 visitors in The online store has an extensive list of cheese varieties, packaging options, and ancillary products such as gift baskets. About half of the farm s cheese production is sold through its store. The other half is sold either wholesale under the Sweetwater Valley Farm label or corporately. The Harrisons also package several thousand cheese boxes each year for companies to use as Christmas gifts. 34 P age

36 The bulk of the Harrisons milk, some 80%, is still sold for fluid milk through Dean Foods. In fact, all of their milk is sold to Dean and pooled on the Appalachian Federal Order. The Harrisons then buy back the 2 million pounds of milk they need for cheese making. Flat Creek Lodge Dairy ( began as an upscale hunting and fishing lodge located three hours southeast of Atlanta. In 2007, owners Steve and Caroline Harless opened the dairy, which was then only the second licensed artisanal cheese dairy in Georgia. Cheeses like the signature Farmhouse, Farmhouse Blue and spicy Aztec Cheddar have now made their way to restaurants and retail spaces in Atlanta as well as Savannah and North Georgia; Highlands, North Carolina and Murray s, a renowned retailer of cheeses in New York City. The Flat Creek Lodge Dairy now produces a full line of artisanal cheeses including: Cheddars Aged, Horseradish, Aztec and Thai Chili; Onion Mustard Kase; smoked cheeses such as Smokin Jack; the original Flat Creek Farmhouse and Farmhouse Blue; Dutch style Leiden and cheeses flavored with herbs and other produce from the Flat Creek Lodge greenhouses. All of the cheeses are made from raw milk except the Flat Creek Feta, which is pasteurized. New varieties ready soon will include the Aged Stir Curd, Grana Kalamata Olive and White Wine Feta and Vidalia Onion Kase. Flat Creek Lodge cheeses are distributed by Destiny Organics and are sold at Atlanta area and southeastern Whole Foods stores, farmers markets, and many Atlanta-area destination restaurants. Additionally, the line of cheeses is available onsite at Flat Creek Lodge or through the website. Aztec Cheddar sells for $29.99/lb while the Dragon s Breath Irish cheese sells for $34.00/lb. Cheese Operations Outside the Southern U.S. The Midwestern U.S. is home to a large number of cheese dairies that have become wellknown in the industry. Small-scale, artisanal and large-scale industrial dairies operate in the area. Several have been highlighted here to offer a perspective on the cheese industry in this part of the U.S. 35 P age

37 Milton Creamery ( Located in Milton, IA (890 miles from Stuarts Draft), the creamery was started in 2005 as a joint venture between the local Amish dairy farmers and the Musser family. The dairy is now solely owned by the Musser family, but they continue to source their milk locally. Milton Creamery uses between 18,000 to 20,000 pounds of milk per week purchased from five area Amish farms for their cheese production. The Creamery makes two varieties of signature cheeses: Prairie Breeze, continental-style aged cheddar sold in blocks and Prairie Rose, a mild Swiss-style washed-rind cheese which is aged and sold in ten to twenty pound wheels. In December, 2010, Milton Creamery s Prairie Breeze cheddar won a gold medal at the World Cheese Awards in London, the world s largest international cheese competition. The Milton Creamery entry was the only American winner along with 11 British cheddars which were honored with gold, silver or bronze medals in the category. Prairie Breeze Cheddar sells for $8.99 per ½ pound at the Marion Street Cheese Market just outside Chicago. Milton Creamery Cheese is also widely available at farmers markets, specialty retailers, and distributed by wholesalers such as Classic Provisions, Inc. of Minneapolis, MN. Caves of Faribault ( was founded in 2001 to revitalize the original cheese-making facility in the sandstone caves of Faribault, Minnesota, approximately 890 miles from Stuarts Draft. Originally, the caves were used from the 1930 s until the 1990 s to produce the first blue cheese made in America. Through a series of business transactions, the caves were enlarged, then later closed and the cheese processing facilities moved elsewhere. The Faribault Dairy Company reopened the caves in 2001 and began making the traditional AmaBlu premium French-style blue cheese aged in the caves. Today, Caves of Faribault is a subsidiary of Swiss Valley Farms, a $400 million dairy cooperative owned and controlled by 900 dairy producers. Caves of Faribault produces a gorgonzola and a high-end premium blue cheese called St. Pete s Select which round out the company s blue cheese offerings. Both the gorgonzola and 36 P age

38 the St. Pete s Select sell for $9.00 for a 9 ounce wedge from their online store. The Caves of Faribault s latest cheese offering is an aged Gouda-style cheese called St. Mary s Grass Fed Gouda. This gouda, made of milk produced from grass fed cows, originates from Edelweiss Creamery in Wisconsin. While still young, the wheels of gouda are sent into the sandstone caves where they mature for two years. St. Mary's Grass Fed Gouda was featured at The Fancy Food Show in San Francisco January, It sells for $14.99 for a 16 oz. wedge. All Caves of Faribault cheeses are now widely available through various distributors, retailers, and through their company s retail shop, The Cheese Cave, Faribault and via their on-line store at Uplands Cheese Company ( Located in Wisconsin approximately 900 miles northwest of Stuarts Draft, the venture began in The creamery is owned and operated by two families: Mike and Carol Gingrich and Dan and Jeanne Patenaude. They created the company to produce and distribute a unique cheese that they developed using century old techniques. The herd is made of ten breeds. Their cheese is called Pleasant Ridge Reserve, a farmstead artisan cheese made in the tradition of Alpine cheeses like Gruyere and Beaufort. Like the Alpage versions of these cheeses, they only make Pleasant Ridge Reserve from May through October when their cows are eating fresh pasture. According to the owners this grass-fed, raw milk produces flavors in the cheese that can't be replicated by "ordinary" milk. They age all of the cheese in ripening rooms built into the creamery. There, the cheeses are washed several times a week in a brine solution, which encourages the development of certain bacteria on the cheese rinds. These bacteria, along with the micro-flora indigenous to the raw milk, develop flavors in the cheese over time. As the cheeses age, their flavors become more complex and concentrated. The owners explain that each batch develops its flavors at a different pace, and an important part of the work in the ripening rooms is to taste each batch again and again to determine when they are ready to sell. They age a small percentage of the cheese produced for over a year, and these "Extra Aged" batches of Pleasant Ridge Reserve are available only in the fall and early winter. Their Extra Aged Pleasant Ridge Reserve won the American Cheese Society's annual competition award Best of Show amongst 1,400 of the nation's finest cheeses. It is the third time that the firm has been awarded this distinction which 37 P age

39 makes it a record in the U.S. Labor Day is the traditional release date for their limited stock of Extra Aged wheels, which have been selected from the previous summer's production for the depth and complexity of their flavor, and have been aged at least 15 months. It is possible to order Pleasant Ridge Reserve Cheese via internet: $200 whole wheel 10 lbs, $100 half wheel 5 lbs, $50 a quarter wheel 2.5 lbs and $25 one eighth wheel 1.25 lbs. Pleasant Ridge Reserve-Extra-Aged (18-24 months) retails half a pound at $19.00, one pound at $ Source: Recently, besides Pleasant Ridge Reserve, Uplands and their cheese maker, Andy Hatch, have introduced Rush Creek Reserve, a soft-ripened, washed-rind cheese that highlights the rich milk characteristic of only the fall season. The small wheels are wrapped in spruce bark and aged for 60 days, giving the cheese a piney, smoky flavor that Hatch likens to cured meat. It s a runny, luscious, oozing type of cheese, Andy Hatch says. He suggests pairing it with a Riesling or hoppy IPA to cut the richness. This indulgent cheese will be available in limited quantities through mid-february and has a three-week shelf life. It is available in 12-oz. wheels. Bleu Mont Dairy Co. The firm does not have a website yet. There is a Facebook page available at The cheesematuring facility is under the direction of Willi Lehner in Madison, Wisconsin approximately 860 miles northwest of Stuarts Draft. There are no cows and no cheese-making room in this venture; only a curing (maturing) room that the owner claims is the smallest in Wisconsin. Lehner s parents were first generation immigrants and his father is also a cheese maker. Lehner worked for many years with his father making cheese. In addition, he practiced in Switzerland and visited Europe learning about aging or maturing cheeses, particularly clothbound cheddar. Bleu Mont purchases cow milk from local, certified organic dairies practicing rotational grazing. Cheeses: Bandaged-wrapped cheddar and various styles of washed rind cheeses. Some are aged just 60 days while others are aged out over a couple of years. Source: Bleu Mont Bandaged Cheddar retails half a pound at $15.00 and one pound at $ This cheese is a cow's milk, English-style farmhouse cheddar, cloth-bound and cave-aged 38 P age

40 less than one year. Paired with a lager or off-dry riesling (as per Wine Spectator s recommendation), the cheese makes a wonderful addition to a salad course or even dessert. Source: Roth Käse USA Ltd. ( Located in Monroe, Wisconsin about 830 miles northwest of Stuarts Draft. The company processes cheese for the specialty cheeses category. The venture started in Switzerland in 1863 and expanded into the U.S. in By the 1980s the enterprise became the largest importer of European specialty cheeses in North America and it laid the foundation for the company that came to be known as Roth Käse USA. Recognizing that there was an opportunity to craft excellent specialty cheeses in America, Fermo Jaeckle, a former executive with Otto Roth & Co., joined with his cousins, Felix and Ulrich Roth, to found Roth Käse USA, Ltd in Instead of importing cheese, the focus became crafting and curing European-style specialty cheeses in the U.S. The company began by focusing on crafting traditional alpine cheeses, and as they have grown, they have added other outstanding cheeses from across the world to their range of products. The brands include: Grand Cru, Buttermilk Blue, Jean LaFitte, Mezzaluna, Landhaus, Ostenborg, Van Gogh, Kronenost, Sole and "4 ounce Mix & Match." The latter offer is a consequence of the weak economy and consumers who were looking for value for their dollar. The company developed this pre-cut/pre-sliced 4-ounce American Artisanal Cheese Program. The cuts and slices are available in several varieties including Ostenbørg Havarti, Van Gogh Bouda and Gran Cru Gruyere. The price for Grand Cru Raclette (Rindless), made in Wisconsin with pasteurized cow milk, half wheel is $52.00 and the deli cut of 16 oz. is $8.49. Jean Lafitte Brie, from pasteurized cow milk, sells the deli cut of 16 oz. at $7.49, 8 oz. cut at $3.99 and wheel at $ Vintage Van Gogh, from pasteurized cow milk, sells the deli cut of 16 oz. at $8.49, the 8 oz. is $4.69 and the wheel at $ The mini cheeseboards kit includes three cheeses from raw cow milk, a table board and cheese knife, retailing at $9.95. The Party wheel includes six cheeses from pasteurized cow milk and retails at $ Other cheeses at the store where Roth Käse products include: Bleu Affinée made in Wisconsin with raw cow milk, half wheel is $45.00 and deli cuts of 16 oz at. $7.89, and 8 oz. at $4.99. Limburger spread, made in Wisconsin, has the deli cut 8oz. at $3.99. The webpage is complete and gives an indication of the size of the company. The webpage includes pictures and descriptions of their products, recipes and stores. The company presents its cheeses to competitions and has won over 100 awards in regional, national and international contests. 39 P age