Introducing a new product in the dairy foods industry is “a tough business,” says Randall Mitchell, chief executive officer of  Smoky Mountain Cheese, Seymour, Tenn. “There’s nothing easy about it.”

Like most entrepreneurs, the Navy veteran and former commercial cabin builder encountered numerous challenges—cost, regulations, retailers wary of adding a new SKU to their inventory—while bringing his Smoky Mountain Beer Cheese Spread, a combination of processed cheese from Wisconsin and premium beer, to market. But Mitchell knew from making the tasty snack for nearly 20 years for himself, family and friends that he had a one-of-a-kind product worth the effort and investment.

Last November, the company introduced four new flavors — chipotle, jalapeno, tangy/sweet and gourmet white —  at the 2011 Private Label Trade Show in Rosemont, Ill. All are available branded, in 8-ounce tubs; private-label versions are sold in 8-, 10-, 16- and 32-oz. plastic containers.

Founding the company

Steve Koplow, a Sevierville, Tenn., dentist and friend encouraged Mitchell to market the spread after sampling it and helped co-found Smoky Mountain Cheese, a service-disabled veteran-owned small business (SDVOSB), in October 2009. Taste tests at local convenience stores elicited enthusiastic responses from consumers. A scientist at the University of Tennessee’s Food Safety Center of Excellence, to whom Mitchell had sent a sample for testing, also told him he had a great product.

Mitchell officially introduced Smoky Mountain Beer Cheese Spread in March 2010, initially producing 500 to 600 8-ounce tubs a day at a small facility in Treadwell, Tenn. A tub has a suggested retail price of $3.99.

When Smoky Mountain Cheese’s lease expired in late 2010, the company moved to a 5,000-square-foot facility in nearby Seymour and invested in computerized machinery capable of outputting 60,000 8-ounce tubs of spread daily. 

“We run so much product that we may only run one day or a day and a half a week, based on demand,” says Bill Beres, executive vice president of sales and marketing, adding that this enables the company to employ only five people.

“The other half of the story,” he continues, “is that the University of Tennessee just acknowledged that we qualified for a nine- to 10-month shelf life. [The spread] will probably be good for a year our next go around which, in a dairy product, is almost unheard of.”

Retail expansion

Due to Mitchell’s persistent sales efforts, Smoky Mountain Beer Cheese Spread is in 3,120 stores and 27 states east of the Mississippi River, to date. It’s slated to enter Kroger stores in January 2012, and Publix stores and Supervalu’s Jewel-Osco sometime in the first quarter of 2012. Mitchell also has begun working with Florida-based Winn-Dixie. Consumers in the western half of the country, meanwhile, can find in the spread in Safeway and Hy-Vee stores.