The state of Wisconsin has a long tradition of cheesemaking. Swiss, German and Italian immigrants processed local milk into the cheeses they knew from the Old Country, such as Emmenthal, Muenster and provolone.

Klondike Cheese Co., Monroe, Wis., has roots in Switzerland. In 1925, a dairy co-op hired a Swiss immigrant named Ernest Buholzer to be its cheesemaker. Three of his grandsons (Dave, Ron and Steve) own the operation today and some of their children are involved.

The company used to make Swiss, Cheddar, Colby and other cheeses, but found it tough to go up against competitors with much greater production capacity. The third generation of owners looked to Europe for product inspiration. But rather than setting their sights on the cheeses of the Swiss Alps and Germany, they turned to the Mediterranean region and specifically to Greece.

Today, Klondike is the country’s second-largest processor of feta (it also makes Muenster and Havarti), producing about 22 million pounds of feta and 8 million pounds of the other cheeses annually. And in an unusual move — for a cheesemaker at least — the company added a production line for Greek yogurt and began producing the cultured dairy product this year.

With a portfolio of feta and Greek yogurt, Klondike has positioned itself well for the future. It is riding a rising tide of demand for feta, and Greek yogurt is the hottest product category in the retail dairy case. Other food processors have begun buying the yogurt for use as an ingredient.

Nationally, the production of feta is growing faster than all cheeses in general. While production of all cheese rose 4.7% from 2010 to 2012, feta production increased nearly 40% in the period. According to the U.S. Department of Agriculture, cheesemakers in the United States produced 108.5 million pounds of feta in 2012, up from 77.5 million in 2010. The number of U.S. plants making feta rose from 25 in 2010 to 36 in 2012, according to the USDA’s National Agricultural Statistics Service.

Vice President of Production Adam Buholzer cites consumer interest in specialty cheeses in general as one reason feta is growing in popularity. While they may have eaten American or Velveeta cheese sandwiches as kids, today’s millenials and their baby boom parents seek foods with the adjectives “artisanal,” “small batch” or “ethnic.” The primary use of feta is in salads, but a Klondike recipe book promotes the cheese as an ingredient in lasagna, pizzas, cheesecakes and hummus dips.

The company has been making feta since the 1980s. In 2000, it built a new manufacturing plant and began producing feta the following year. (See related article on page 54.) A computerized, fully automated coagulator has helped the company to more than double its output. Klondike has its own brand (called Odyssey) and produces for private-label and foodservice accounts. Although Klondike’s brand is consumed domestically, some customers do export the cheese, Buholzer said.

Klondike makes the cheese in several formats, including bulk pails (in chunks and cubes packaged in brine), random-weight loaves, crumbled in bulk bags and crumbled in cups. The cow’s milk cheese is produced in full-fat, reduced-fat and fat-free varieties. In addition to making a traditional feta, Klondike produces flavored varieties such as tomato and basil, peppercorn and  Mediterranean herb.

Although the traditional, non-flavored cheese is the best-seller, Klondike makes flavored cheeses when customers request them. For simple flavors (tomato and basil, for example) it will develop the flavor levels in its research and development lab, then send samples to customers for approvals. If a customer requests a more complex flavor, like “Southwestern,” then Klondike might turn to an ingredient supplier to work out an appropriate flavor profile, Buholzer said.

The chunk-in-brine line has proved popular. Klondike recently added an 8-ounce size to its retail line that includes a one-pound package. The brine preserves the mouthfeel of the cheese, and helps with the flavor and texture, Buholzer said.

A family of master cheesemakers

Cheesemakers seek quality and consistency. One reason that Klondike attains success on both attributes is that it has four master cheesemakers on staff. Owners (and brothers) Dave, Ron and Steve Buholzer, and Jim Demeter graduated from the Master Cheesemaker Program of the Center for Dairy Research at the University of Wisconsin, Madison. All are certified in feta cheese; and some are certified in Muenster and brick. Adam, who is Steve’s son, is currently enrolled in the three-year program.

The certification definitely helps in marketing, Adam said, because it shows the company’s commitment to producing good foods. Customers don’t have to take Klondike’s word for it. The cheesemaker’s products regularly receive awards and honors from the United States Cheese Championship, American Cheese Society and the Wisconsin State Fair.

Klondike prospects for customers by exhibiting at industry trade shows, including the International Dairy Deli Bake Association expo, the National Restaurant Association show and the Private Label Manufacturers Association show.

In recent years, Klondike’s feta cheese customers began asking for Greek yogurt. Klondike already had a solid retail distribution
network and strong relationships with Greek foodservice accounts. Adam, whose background is in engineering, headed up the company’s expansion into Greek yogurt. He researched equipment and the production process.

The company invested $12 million to build a 40,000-square-foot building and to purchase the necessary equipment for processing and packaging Greek yogurt. The first cups rolled off the line this spring. The Buholzers worked with Evangelos Mandrekaes, who makes Greek yogurt for his own company in Greece. He helped Klondike select the equipment and the ingredients, and showed them his processing techniques. Mandrekaes visits the Monroe plant frequently, Buholzer said.

The decision to manufacture Greek yogurt was “all or nothing,” Buholzer said. If Klondike was going to be a yogurt processor, then it needed to buy the equipment that would allow it to serve retail, foodservice and ingredient customers. And it would do so with branded and private-label products. The filling machines can accommodate everything from 5.3-ounce cups to 5-gallon pails to 55-gallon drums.

Klondike is trading on its reputation for quality cheeses in making Greek yogurt. Its branded product is called Odyssey, and it makes private-label yogurt for retail customers. The company sells Greek yogurt by the barrel to food processors who use it as an ingredient in a variety of foods.

It makes six flavors: strawberry, blueberry, raspberry, peach, black cherry and vanilla. It can make a blended yogurt or one with fruit on the bottom. Klondike sources the milk from Wisconsin dairy farmers. It uses about 8,000 gallons of milk daily. (By comparison, the cheese operation uses more than nine times that: 740,000 pounds.)

Klondike Cheese Co. is a good example of a company that changes to keep up with the times and that has made the moves to continue to grow. In the 1940s, Klondike was producing four wheels of Swiss cheese daily. Now the company is making 30 million pounds of feta, Muenster and Havarti annually, plus yogurt. The Buholzer family has shown it is adept at identifying food trends, responding to customers’ needs and satisfying the demands of consumers.