As a dairy cooperative, Massachusetts-based Agri-Mark Inc. dates back through several predecessors to 1916, just three years longer than the brand by which it’s probably best known to the public: Cabot.
The Vermont co-op, famous for its aged cheddars sold in an ever-widening market across the country, is celebrating its 90th anniversary this year, and in those nine decades, the Cabot name has become respected as a cheesemaker throughout the United States as well as overseas.
But Cabot – the commercial arm of Agri-Mark that manufactures and markets all consumer and foodservice products, and commodity cheese and whey – is just one of nearly 20 New England cooperatives that, through various mergers over the past century, came together to create what’s now known as Agri-Mark, which was established under that name in 1980.
At the helm since the beginning has been Paul Johnston, chief executive officer, who has 45 years of dairy experience under his belt. From his post at Agri-Mark, one of the founding members of the former Northeast Dairy Compact, Johnston has witnessed the ups and downs of dairy, from record high milk prices to record lows. The latter is good for the company as a manufacturer but bad for its member farmers, and overall destructive for sustaining the industry.
Low farmer income is one of the biggest challenges facing Agri-Mark right now, Johnston says, yet the co-op has managed to generate profits for its members. Agri-Mark reported sales of $881 million in 2008 and a year-end profit of $11.8 million, and issued special premium checks to its farm families for 30 cents per hundredweight last spring.
The continued strength of Agri-Mark’s Cabot and McCadam brands exceeded expectations in 2008, the company reports, and steady sales of butter and whey proteins helped boost returns. Johnston says he’s pleased with these results, given the impact of high energy costs for the co-op’s four plants (reportedly $4 million higher in 2008 than ’07) and a difficult economy. “We have two great brands and a good mix of wholesale business,” he says, “and that gives our farmers the opportunity to capture profit from both the consumer and wholesale markets.”
Johnson says Agri-Mark continues to expand its branded sales and explore every opportunity to stabilize farm milk prices at levels above the cost of production. “We expect continued growth of our branded business, continued strengthening of our balance sheet and increasing profit distributions to our farmer-owners,” he says.
“Agri-Mark’s highest priority,” says Neal Rea, a New York-based dairy farmer who’s Agri-Mark’s board chairman, “is to work with others in the industry to find a way to end this devastating cycle of milk prices paid to farmers that are far below our cost of production. We need to find some immediate answers as farm families simply cannot survive this crisis much longer. We are now working with other groups throughout the nation to find a solution we can all agree on and move forward with as soon as possible. Something has to be done or fresh, local milk may be a thing of the past for an increasing number of Northeast consumers.”
Cheese doesn't stand aloneMeanwhile, there seems to be no stopping the progress of the Cabot brand, which offers more than 700 SKUs of aged and seasoned cheddars in an array of sizes and formats, along with cultured products and butter. “There is always going to be a place in the market for our award-winning cheeses and other dairy products,” Johnston says.
With more than $350 million in annual sales, Cabot products are available at major retailers throughout New England and select vendors outside that core marketing area (the McCadam brand of New York-style cheddar is sold throughout New York state and New England). But perhaps the largest selection of Cabot-branded products can be found in Cabot itself, at the plant’s visitor center, which opened in 1987 and since then has hosted tens of thousands of visitors seeking a guided tour of the creamery for an up-close look at the cheesemaking process, after watching a short video telling the history of the co-op. There’s also plenty of cheese for the tasting, both for sale and free samples of the latest varieties.
According to Doug DiMento, Agri-Mark director of communications, Cabot’s extra-sharp and reduced-fat varieties are the brand’s best sellers. Newer to the lineup are flavored cheeses like Chipotle Cheddar and spice-rubbed versions like Tuscan Rubbed and Chili-Lime.
Various Cabot varieties have won numerous national and international awards, including the U.S. and World Cheese Championship contests, American Cheese Society and World Cheese Awards (McCadam cheeses also have won many state and national competitions).
“Cabot cheeses are sold all over the country, with its core area down the East Coast,” DiMento says. “Customers are all major retailers in the core area, other major retailers in non-core areas and the major club and supercenter retailers.
“Our key consumer and foodservice products are cheeses – cheddars, jacks, flavored cheddars and euro styles – plus butter and cultured products. Cheeses are available in many forms – bars, deli loaves, shreds, slices, individual servings, waxed bars, wheels and flats.”
The market is very competitive, DiMento says. “Chunk-cheese sales were flat to declining last year and flat to mildly increasing this year. We have seen large growth in private label sales and declines in branded sales with the recession,” he says. “Foodservice is primarily in the Northeast, with customers primarily being upscale restaurants and institutions.”
On a gross margin basis, Cabot’s business is 90% branded, 6% private label or sales to other brands and 4% foodservice.
Moving forwardBeyond the cachet of Vermont cheddar, what selling points does Agri-Mark emphasize when promoting its Cabot brand? “Taste, quality, farmer ownership and customer service,” says Dr. Richard Stammer, Cabot president and Agri-Mark chief operating officer. “We feel we offer a unique combination of these attributes and they are key to our growth, along with a continued move by consumers to taste, quality and going back to their roots.”
For the industry as a whole, Stammer sees opportunities beyond our borders. “The biggest opportunity for the dairy industry is renewed growth in international trade as the world economy recovers from recession and we get continued growth in incomes and dairy consumption, especially in Asia,” he says.
Closer to home, Cabot sees corporate citizenship and community outreach as a very important part of its identity. To that end, Stammer says, “we have embarked on an extensive sustainability program, from farm to consumer. A key focus of this program is to develop meaningful measures of sustainability from a triple bottom-line perspective.”
Leading this effort is Jed Davis, recently appointed director of sustainability after 17 years in Cabot’s marketing department. “We approach sustainability as ‘living within our means and ensuring the means to live,’” Davis says. The company is conducting an inventory of its greenhouse gas emissions and energy audits to determine areas of savings; reviewing operations for opportunities to “reduce, reuse and recycle”; and working on ways to reduce power use during peak demand times.
Agri-Mark may not be unique among companies in that respect, as the sustainability trend continues to sweep through the U.S. manufacturing sector. But what is unique, Stammer says, is being “a relatively small company that can compete in a very competitive business with much larger companies based on the quality of our products and our abilities to reach quickly to the needs of our customers and consumers.”
And making some darn fine-tasting cheddar doesn’t hurt either. Ultimately, that’s going to determine how the next 90 years play out at Cabot, or as Stammer says: “Being the best at what we currently do.”
Finding a Friend in CheesesI think I’ve said this before, but boy, do I love my job. Sometimes it’s hard to tell what the best part of this industry is, the food or the people. Upon reflection, it may be both. That’s certainly the case at Cabot Creamery in bucolic Cabot, Vt.
At the plant’s visitor center, I was like a kid in a candy store with all the cheeses and butter on display. The first cheese to try was the Habañero Cheddar. Normally I need a couple of cups of java to wake me up, but one cube of this deliciously fiery cheddar and I was wide awake – not a cheese for the timid!
Next were two newer releases, the Tuscan Rubbed and Chili-Lime cheddars. Both were fantastic, but I enjoyed the Tuscan so much that I ate almost the whole bowl. I grabbed a few for the road, and they were the focus of my weekend get-togethers.
I could go on and on about the classic taste of the wax-dipped Classic Vermont Sharp, the elegance and refinement of the Private Stock Cheddar, the sassy bite from the Seriously Sharp Cheddar (nostalgically packaged with a tartan theme that calls to mind the flannel shirts of the hunters that helped to make it famous) or the silky smoothness of the McCadam Adirondack cheese from Cabot’s sister cheese company in New York’s Adirondack region. I went home with a private stash of my own, and I’m not ashamed to say that, during the 6-hour ride home, a brick of the McCadam and half a brick of the Private Stock disappeared!
The last tasting experiences of the day came during the plant tour. Marcel Gravel, the plant manager and “cheddar master” explained the daily workings and offered a taste of the curds on their way to becoming Cabot’s cottage cheese (I much prefer the final version of the product). Finally, on the way out, I grabbed a handful of popcorn covered with Cabot’s Cheddar Shake powder – yummy! My kids and I refuse to eat popcorn without it now.
Consider me a Cabot convert!
– Amy Vodraska, associate publisher
History: Agri-MarkAgri-Mark’s rich tradition as a cooperative dates back to 1916 with the formation of its predecessor, the New England Milk Producers Association. The cooperative flourished during the 20th century and in 1980 became Agri-Mark.
In 1992, Agri-Mark merged with Cabot Creamery Cooperative, thereby ensuring that Northeast dairy farmers would continue their ownership of a valuable, time-honored consumer brand. Eleven years later, Agri-Mark merged with the Chateaugay Cooperative in Upstate New York and acquired the assets of McCadam Cheese, including a plant located in Chateaugay. McCadam manufactures award-winning New York cheddar, muenster and European-type cheeses. Agri-Mark and the Allied Federated Cooperative united in 2006, adding more New York farmers to help supply the Chateaugay plant.
Paul Johnston is Agri-Mark’s president and chief executive officer. The co-op is based in Methuen, near Boston.
In 1919, farmers in and around Cabot, Vt., figured that if they joined forces, they could turn their excess milk into butter and market it throughout New England. Ninety-four farmers each put up $5 per cow plus a cord of wood to fuel the boiler, bought the village creamery and began producing butter under the Rosedale brand name.
Over the next two decades, as the nation’s population flocked to urban areas, Cabot’s farmer-owners thrived by shipping their milk and butter south. It was at this time that the company hired its first cheesemaker and cheddar cheese entered the product line for the first time.
By 1960, Cabot’s membership reached 600 farm families, though the total number of operating farms around the nation was already in rapid decline. The trend continued into the 1980s when the total number of farms in Vermont sank below 2,000, less than one fifth of what it had been just a few decades earlier. By 1985, Cabot had dropped the Rosedale name and developed its current logo around the concept of Vermont cheddar. The company also began entering its cheddar in national competitions and in 1989 took first place in the cheddar category at the U.S. Championship Cheese Contest in Green Bay, Wis.
When Cabot merged with Agri-Mark in 1992, the combined companies boasted more than 2,100 farms, four processing plants and a large product line. Meanwhile, Cabot cheddars began an impressive run in awards competitions. While the number of member farms has dropped to 1,300, sales of Cabot-branded products rose from $30 million at the time of the merger to $300 million this year.
Cabot moved its administrative and marketing staff to a new site near downtown Montpelier, about a half-hour drive from Cabot, in 2000. In 2004, the company built a new distribution center in Montpelier, closer to interstate highway access than the rural village of Cabot.
Cabot’s president is Dr. Richard Stammer, who joined Agri-Mark in 1982 as manager of economics and communications. Stammer also serves as Agri-Mark’s chief operating officer.
New York state has been a dominant cheese-producing state since the early 19th century, but only a handful of early cheese producers have survived. The McCadam Cheese Co. was established in 1876 by William McCadam in the small community of Heuvelton, N.Y. During the Great Depression, McCadam reorganized and expanded its cheese manufacturing to a facility in Chateaugay.
In 1972, Dean Foods purchased the assets of McCadam Cheese and operated it as a wholly owned subsidiary. Under Dean ownership, a significant investment was made for the modernization and expansion of the operation. In 1991, Finnish cooperative Valio Ltd. acquired McCadam and similarly invested large sums in expanding the manufacturing capability to include European type cheeses.
Agri-Mark bought McCadam in 2003 and continues to offer New York’s finest cheeses.
Sources: www.agrimark.net, www.cabotcheese.com
Central Testing Laboratory
Located in West Springfield, Mass., Agri-Mark’s Central Laboratory performs more than 335,000 component and quality tests on Agri-Mark member milk each year. The laboratory also provides product quality control testing for Agri-Mark’s West Springfield manufacturing facility as well as a variety of testing services for commercial food manufacturers.
West Springfield, Mass.
Located at Interstate 91 and the Massachusetts Turnpike, the West Springfield plant manufactures heavy sweet cream, condensed skim milk, skim milk, nonfat dry milk powder and butter. The plant processes milk from farms in New England and New York.
Home of McCadam Cheese, the Chateaugay plant has the capability to manufacture 20 different cheeses, from muenster to the brand’s Adirondack Reserve Cheddar.
The Cabot facility manufactures top-quality Vermont dairy products such as cottage cheese, sour cream, yogurt and specialty cheeses. Cabot is also home to a cut-and-wrap operation that converts millions of pounds of cheese per year into many different consumer retail sizes for both Cabot and McCadam.
Most of Cabot’s award-winning cheddar cheese is manufactured at this facility. The Middlebury plant incorporates the latest in cheesemaking technology to produce more than 150,000 pounds of high-quality cheddar cheese each production day. After being boxed and labeled, the cheese is stored at the co-op’s 54,000-square-foot cheddar aging warehouse at the site. Middlebury also makes 80% whey protein concentrate in a state-of-the-art facility built in 2001.
Cabot’s 60,000-square-foot distribution warehouse was built in Montpelier in 2004 to help make room for the expansion of the cut-and-wrap facility at nearby Cabot. Here, finished product is stored and orders are filled and loaded onto trucks for customers. Both receiving and shipping utilize a fully computerized receiving/inventory tracking and ordering system.
The Cabot Family of Products
Cabot Creamery is justifiably most well known for its extensive line of cheddar cheeses, in various aged, seasoned and reduced-fat varieties. All cheeses are aged from two months up to three years, the most mature selections hand packed and dipped in wax. Over the years, Cabot has won numerous taste awards for its cheddars, including “Best Cheddar in the World” at the 22nd Biennial Cheese Championship.
Varieties include Sharp, Extra Sharp and Seriously Sharp, plus Mild that’s geared toward children; 50% Reduced Fat in regular, jalapeño and omega-3, plus pepper jack; 75% Reduced Fat cheddar; Horseradish, Chipotle and Garlic & Herb; Old School Cheddar (aged five years); Vintage Choice; and Private Stock. Cabot’s clothbound cheddar, made in round molds from single batches of milk from individual farms, has won international competitions. Shreds and slices round out Cabot’s cheese selections.
Also offered under the Cabot label are butter, yogurt, cottage cheese, sour cream and dips.
Sold under the McCadam brand are Sharp, Extra Sharp, Adirondack and Horseradish cheddars, plus Muenster and Pepper Jack.
Finally, Agri-Mark’s extensive cheese production (and purportedly the only food-grade whey plant east of Wisconsin) allows manufacture of high-quality whey protein concentrate and whey permeate.