Glanbia Foods is the largest American-style cheese manufacturer as well as one of the largest whey ingredient producers in the United States, and the largest barrel cheese manufacturer in the world. David Soyka reports on this Irish subsidiary located in the Magic Valley region of Southern Idaho.
Glanbia is Irish for “pure food.” you might wonder what a company with an Irish name is doing in Twin Falls, Idaho. And, no, it has nothing to do with potatoes. Back in 1907, the Nelson-Ricks Creamery opened an Idaho cheese factory that was shortly thereafter purchased by Clifford Ward and renamed Ward’s Cheese. In 1990, Ward’s Cheese was acquired by Avonmore Foods, plc.; in 2000 this Kilkenny, Ireland-based leading international maker of dairy foods and nutritional ingredients changed its name to Glanbia plc, as did its American division.
Today, Glanbia Foods Inc is the largest producer of Americanstyle cheese in the U.S. with approximately 17 percent market share. The company has two cheese processing plants in Gooding and Twin Falls, where it is headquartered, and two whey processing plants in Gooding, and Richfield, which represent the largest plants of their kind in the United States. These facilities collectively process over 12 million pounds of milk every day, resulting in over 400 million pounds of cheese and 110 million pounds of dairy ingredients annually. The company employs about 600 and also maintains a sales office in Wisconsin.
The Gooding cheese plant is the largest barrel cheese producing plant in the world, processing over nine million pounds of milk every day into 500-pound barrels of American-style cheese sold to the industry’s leading manufacturers of American cheese slices. The Gooding whey plant produces approximately 98 million pounds of dairy ingredients annually, characterized by a clean flavor, good color and a high level of nutritional value. Key products include Avonlac™134, a 34 percent whey protein concentrate, Thermax®, a heat-stable whey protein ingredient solution, Bioferrin®, its branded Lactoferrin and a refined edible-grade lactose.
The Richfield facility pioneered the development of cross-flow microfiltration (CFM®) technology that produces a highly-purified, source of whey protein, Provon® whey protein isolates with 90 percent protein content, Salibra, an 80 percent whey protein concentrate and TruCal®, a balanced combination of milk calcium and other minerals extracted from whey.
The company is headquartered in the hub of one the world’s most productive farming regions known as the Magic Valley. The Twin Falls block cheese plant accounts for a good portion of the company’s cheese production: 40 pound blocks of Cheddar, Monterey Jack, Colby, Colby Jack and Pepper Jack cheeses that have received international recognition as the best of their kind. Indeed, most recently Glanbia earned two gold and two silver medals in the prestigious 2008 World Championship Cheese Contest, the largest international cheese competition in the world involving nearly 2,000 entries from 19 countries.
In 2006, Glanbia Foods in a joint venture with the Greater Southwest Agency opened Southwest Cheese, LLC in Clovis, N.M., which operates as both a cheese and whey production facility, with an operational capacity to process over 2.6 billion pounds of milk and produce in excess of 280 million pounds of cheese and 17 million pounds of high value-added whey proteins on an annual basis. Just as the Idaho plants are located in a premier dairy region, Southwest Cheese is conveniently embedded within New Mexico’s cattle country, with direct access to local milk producers.
But to what extent does Idaho mingle with its Irish parent and vice versa? “About 10 years ago, the answer to that question was that we sold only domestically and operated more or less independently,” says Dave Snyder, vice president of sales. “Today, our industry, like most industries in general, is much more focused on global markets. So now there is much more of an overlap between us and Glanbia plc in Europe than there used to be; in fact, the U.S. in general is one of the key players in global cheese markets.”
He attributes this to multiple coinciding causes. “The declining value of the American dollar in relation to the Euro makes cheese produced here a good buy. Also, weather issues in the Oceanic countries, Australia in particular, have resulted in reduced dairy production there. At the same time, there has been steady rising demand around the world for cheese, particularly in rising economies such as those in Asia. It’s almost insatiable – 30 years in the business and I haven’t seen anything like it.”
WHEY UP DEMAND
Market demands coupled with technological gains also dictated the restructuring of separate business units for cheese and whey nutritional products. “Whey is a natural by-product of the cheese making process,” Snyder explains. “Whey is typically used in sports nutrition and weight loss products.” According to the National Dairy Council, whey protein is one of the richest known sources of naturally occurring branched-chain amino acids which, compared to other proteins, delivers more essential amino acids that the body absorbs more quickly and efficiently. Consequently, whey protein can boost the rate at which the body makes lean muscle mass and is therefore favored among body builders as well as health- and diet-conscious consumers.
“It’s nothing new,” Snyder points out. “However, in the last 15 to 20 years there’s been a rise in health consciousness among consumers, and demand for whey protein products has increased to the point where we now have dedicated resources to produce and market it.” While whey protein isolates, whey protein concentrates, whey fractions, heat-stable whey proteins, milk proteins and dairy calcium are produced in Idaho, a business unit, Glanbia Nutritionals, is headquartered in Monroe, Wis. expressly to market these science-based nutritional solutions for use in health beverages, nutrition bars and supplements.
In the cheese business, a growing trend also related to health is reduced- and low-fat varieties. “We’ve tried no fat, as well, but that’s been a failure industry-wide as no one has been able to come up with a no-fat cheese that still tastes like cheese,” Snyder says. “Right now, a 30 percent reduced fat seems the most popular, though demand goes up and down. It’s typically a seasonal thing, around New Year’s we get some peak because people are making resolutions to lose weight or eat healthier. And, of course, when the weather gets warmer and people start wearing less we see a significant increase in demand. At the same time, more companies are promoting foods that contain reduced-fat varieties. Weight Watchers, for example, is building their cheese categories, so that’s an opportunity for us to provide more reduced-fat product.”
Another expanding niche is organic cheese. “This year one of our goals as a company is to establish a presence as an organic cheese supplier,” Snyder says. “This is a category that is still trying to find itself, but has shown that there is going to be some long term demand for this type of product. We do have organic certification from the state of Idaho, and while there is some controversy over what actually defines a product as organic, we’re confident we will fully comply with whatever standards are eventually adopted. We’re a responsible company and we want to be sure that there is no question that what we label organic is in fact truly organic.”
With continually rising demand in both the cheese and whey categories, Snyder says that there is still little danger of supply sources drying up. “If anything, there might be a bit of oversupply. However, dairy farmers understand the market, and that’s why prices are as high as they are. Milk producers want to get as much as they can, of course, and in this market they can set prices pretty high. For the immediate future, it looks as though that’s going to remain the case.”
Snyder notes that in Glanbia’s particular industry sector “there’s been a lot of consolidation to the point now where there’s only a handful of large cheese package processors comparable to what we do. We sell strictly business to business, and while we used to employ food brokers, we’ve found it more economical and efficient to sell direct to other large companies. It’s the old 80/20 rule that the majority of your sales derive from only 20 percent of your customers. We supply to suppliers that service large volume purchases such as Wal-Mart and McDonald’s. What we might lose from sales to smaller companies we more than make up for in terms of scale by concentrating on the larger accounts.”
For the future, Glanbia has set its sights on buttressing its position as the “big cheese” not only in the United States, but throughout the world. “Our strategic plan is to be the number one supplier of America-style cheese in the world.”
Certainly nothing cheesy about that, no “whey” about it.