"Statistics say that processed cheese is stagnant and the natural cheese slice segment is growing,"Allison says. "Natural shreds have been booming and continue to boom."

That might be good news for any company selling natural slices and shreds in nice packaging, but its especially good news for Tillamook as it grows its business in markets for from its Oregon coast base.

Once thought of as a western states-only company, Tillamook is still western-intensive, but it has grown with its grocery chain customers and is now selling a broader line of products in markets like Chicago, Dallas, and even parts of New England.

"In the east we're perceived as a specialty cheese, but in the west we are mainstream. In order to get the volume, we need to be on the dairy side as well as the deli side in the east and the Midwest. We used to have one or two SKUs that we squeezed into what we call the process cheese section, but now we have an entire shelf."

While two-pound and random weight chunks are successful staples for Tillamook, it has along with other cheesemakers, introduced slices and shreds in convenience packaging including shingle packs and zipper bags. But some consumers in the heartland and along the eastern seaboard are seeing these forms of Tillamook for the first time. And these product lines may be more visible thanks to a packaging makeover that features bright colors keyed to the grade of the cheese.

Tillamook's sales grew significantly in 2004 and the association climbed from No. 52 to No. 49 in the Dairy 100.

To find out more about Tillamook's sales growth and about the $50 million expansion underway at it's Columbia River plant, watch for the August issue of Dairy Foods magazine.