Emmi Roth Brings Swiss Yogurt, Coffee Beverages to the U.S.
The U.S. arm of Switzerland’s largest dairy is staking a claim to the markets for yogurts and milk-based coffee beverages. The dairy processor already is known here for its award-winning specialty cheeses.
Alps, cheese and chocolate are commonly associated with Switzerland. So is the country’s reputation for precision engineering. Just ask anyone who has taken a cable car to the top of a mountain or owns a Swiss watch. A Swiss dairy processor is expanding its presence in the United States by taking precise steps in developing dairy foods, and then executing marketing programs to gain placement on the shelves of grocery stores, with foodservice operators and in specialty food stores.
Emmi, based in Lucerne, Switzerland, is that country’s largest dairy company. Its U.S. subsidiary, Emmi Roth USA is a producer of premium specialty cheeses and dairy products with locations in Orangeburg, N.Y., Monroe, Wis., Penn Yan, N.Y. and Arcata, Calif. In 2009 Emmi purchased Roth Kase, a company whose focus is crafting and curing European-style specialty cheeses made in Wisconsin. With this purchase, the U.S. subsidiary of Emmi became known as Emmi Roth USA. (For more about the Wisconsin cheesemaking operation, see “Authentic Art” in the September 2010 Dairy Foods.)
In 2010, Emmi Roth USA acquired CASP LLC in Penn Yan and Cypress Grove Chevre in Arcata. CASP LLC is a production facility that produces premium fresh dairy and aseptic products. This allowed Emmi Roth USA to produce its own premium dairy products. Cypress Grove, a leader in the domestic goat cheese market, is respected and known for its innovative range of fresh, aged and ripened cheeses. It operates independently, but collaborates with Emmi Roth USA. Both cheesemakers are recognized leaders within the U.S. specialty cheese market.
Emmi’s operations in North and South America accounted for 8.1% of total revenues in 2010. Through the first six months of 2011, company sales were up 2.7%, but sales from the Americas and Europe (excluding Switzerland) increased 6.8%. International sales would have increased 20% if exchange rates were stable, the company noted in its half-year report.
Steve Millard is the president and chief executive officer of Emmi Roth USA. He serves on the board of directors along with Reto Conrad (chief financial officer, Emmi Groupe); Matthias Kunz (head of Emmi International); Fermo Jaeckle (former CEO, Emmi Roth USA); Steve McKeon (former CEO, Emmi Roth USA); and Ueli Roth (former CFO, Emmi Roth USA).
Emmi Roth USA considers itself a producer of premium specialty cheese and dairy foods, with the majority of its business coming from specialty cheese, Millard says.
To underscore where the company’s focus lies, Millard says: “First and foremost we are a specialty cheese company.”
(Indeed. Rene Weber, the VP of production and international projects, is a master cheesemaker who earned the designation by following a rigorous academic and hands-on regimen in Switzerland. He is a member of the Confrérie de Saint-Uguzon society, among others.)
“We are committed to specialty cheeses in the long term. There is no doubt we will continue to build that business.” Millard says.
Emmi’s 2011 six-month report stated, “We were very happy with the performance of the cheese produced locally by Emmi Roth USA.” Cypress Grove Chevre also reported “sound growth” in the period, the report stated.
But Emmi Roth USA has been developing the market for its other dairy foods, including a milk-based coffee beverage called Caffe Latte, Swiss yogurts and Swiss and domestic fondue kits.
Emmi Roth makes the beverages and yogurts at its production facility in upstate New York. The facility also gives Emmi Roth the capability to serve private-label clients, including accounts that buy bag-in-box milk and creamers for foodservice dispensers.
Caffe Latte is an extended shelf life fresh milk and fresh coffee beverage. In fact, freshness is the unique selling proposition of the product, Millard says. Sold in the refrigerated grab-and-go section of grocery stores, Caffe Latte racks up $50 million sales in Switzerland, representing double-digit growth, according to the company’s annual report.
So it is no wonder that Emmi Roth decided to take the beverage to the United States, where such drinks are also popular. Sales in the ready-to-drink cappuccino/iced coffee beverage category increased 5.5% in a recent 52-week period, according to Chicago-based market researcher SymphonyIRI.
Emmi Roth found a co-packing partner in Penn Yan, N.Y. The facility, known as CASP, is the only aseptic plant in the United States that manufactures yogurts and milks under the same roof. The relationship between the client and the co-packer worked out so well that Emmi Roth bought the processing facility outright. (See related article on page 93.)
In 2008, Emmi Roth launched the beverages in the United States, having test-marketed the product at retailers H-E-B in Texas and Wegmans in the Northeast. The fresh-milk beverage is packaged in a tapered cup with a foil seal and a lid. A message on the label instructs consumers to shake the package before drinking. Then they peel off the foil, replace the lid and sip the drink through a hole in the lid. Emmi Roth developed portable coolers for store placement, and the company encourages retailers to merchandise the beverage in their grab-and-go sections.
The beverages, made with low-fat, rBST-free milk, coffee, sugar and chocolate (or cocoa) are available in vanilla, mocha and cappuccino flavors. A fat-free version is made with nonfat milk, whey protein concentrate and sucralose. A 7.7-ounce low-fat cappuccino has 140 calories, 2 grams of fat and 6 grams of protein.
The vanilla flavor uses Fair-trade Certified Coffee. The coffee beans used in the other formulas are sourced from Brazil, Nicaragua and Malabar. Emmi Roth brews coffee in its Penn Yan plant from coffee beans that are roasted and blended at a nearby facility.
To support the sales of Caffe Latte, Emmi Roth uses coupons, sampling, Catalina couponing, direct mail, radio and trade shows.
Smooth, fruit-filled yogurt
Emmi introduced its Swiss-style yogurts to the United States in 2004. Swiss-style yogurt is stirred, with the fruit blended into the yogurt prior to packaging. The other style, called cup set, has fruit on the bottom and the yogurt on top, according to Phillip Tong, a professor at California Poly State University, San Luis Obispo, and a Dairy Foodscolumnist. The Swiss-style process yields what VP of marketing Guido Kaelin calls “a smooth, creamy texture and premium taste.”
Emmi Roth increased the protein content and decreased the sugars in its formula. Kaelin says the company does not use gelatins, gums or thickeners. “That makes the best yogurt,” he says.
He has a third-party opinion to back that up. In 2009, the American Cheese Society gave a blue ribbon to Emmi’s black cherry yogurt, calling it the best of the competition.
At first a co-packer made the yogurts, but Emmi Roth moved production to its Penn Yan plant. It blends fruits not usually found in U.S. yogurts, including green apple and pink grapefruit. Other yogurts flavors are: apricot, berry pomegranate, black cherry, blueberry, coffee, raspberry, strawberry, vanilla bean and plain.
The yogurt is packaged in 3.5-inch-wide, 6-ounce foil-sealed plastic cups with a shrink-wrapped label. Dairy ingredients can include reduced-fat milk, nonfat dry milk, milk protein concentrate and whey protein concentrate.
Kaelin focused his marketing on the New York City metropolitan area last summer. As part of a campaign titled “Yummi,” Emmi Roth sampled the yogurts in downtown New York City. As passers-by tasted the yogurt, Emmi Roth recorded their reactions and opinions. A series of these interviews is on the company’s Facebook page.
Playing in the foodservice market
Besides its branded retail products, Emmi Roth serves foodservice operators. The company is a processor of bag-in-box milk and creamers (from 1% to light cream), supplying foodservice operators at turnpike oases, among other outlets. Emmi Roth also processes coffee concentrate for institutional users, like nursing homes and extended-care facilities. The product is added to water to make coffee.
Through the first six months of 2011, worldwide sales of Emmi’s dairy products (milk, cream and butter) increased nearly 88%. In its mid-year report, the company attributed the growth to the aseptic products (known as “bag-in-box”) made by CASP. Organic growth amounted to 110.5%.
The processing equipment in Penn Yan gives Emmi Roth the ability to make a variety of products including traditional milk-based dairy products and premium enhanced dairy products like probiotics. The processor can also branch out into concepts like alcoholic beverages mixes (for example, strawberry dacquiris and mojitos) or high-viscosity foods, like nacho cheese sauces. These capabilities allow Emmi Roth to pursue dairy and nondairy co-packing contracts from other branded and private-label food companies.
In Wisconsin, Emmi Roth’s cheese division is courting professional chefs. A recipe contest centered around the company’s Buttermilk Blue cheese earned a pair of chefs from Fargo, N.D., $1,000 in cash and a trip to Monroe, Wis. A Gruyere recipe contest offered $5,000 in cash and a five-day trip for two to Lucerne, Switzerland.
The range of products — from cheese to milk to yogurt to nondairy foods — and range of channels — from fine dining to foodservice to retail — position Emmi Roth for success. The U.S. operation will be helped by management in Switzerland, which has stated international growth is a goal.
In the years to come, if U.S. consumers associate yogurt and coffee beverages with Switzerland as they already do with cheese and fine watches, then Emmi Roth USA’s efforts will have indeed paid off handsomely.
A Tradition of Award-winning Cheeses
For the eighth year in a row, Emmi Roth USA won the blue ribbon in the Hispanic & Portuguese style cheese category of the 2011 American Cheese Society competition. Its GranQueso Reserve won first place, a younger version won second place. A naturally smoked Fontina, called Rofumo, placed third in the Smoked Cheese (cow’s milk) category. Emmi Roth USA produces cheeses in Monroe, Wis.
Parent company Emmi, Lucerne, Switzerland, won eight awards (four gold medals, two silver and two bronze) at the 2011 Nantwich International Cheese Show in England.