| Or at least that was the case until Scharfman recently was able to install a large commercial oven that allows him to make enough Crunchy Baked Cheese to satisfy demand — and then some. The oven began operating in November in Watertown, Wis., in a fourth manufacturing site that Specialty Cheese Co. began leasing last year to handle some of the excess Crunchy Baked Cheese demand from consumers that have jumped on the low carbohydrate bandwagon.
• Finding a new niche
Though Specialty Cheese Co. makes more than 35 varieties of cheese representing dozens of ethnic traditions, it is the company's decidedly unique and non-ethnic Crunchy Baked Cheese that is the immediate beneficiary of the company's additional capacity in Watertown. That's because the product, surprisingly enough, has found a niche as a diet food and demand is growing by leaps and bounds.
Just the Cheese Crunchy Baked Cheese is a Specialty Cheese Co. innovation — an all-natural, 100 percent cheese product baked in a 17-step process to give it a potato chip-like crunch. The company developed the product in 1995 and 1996 as a snack item, a sort of cheese and cracker combination all in one, Scharfman says. The research into the feasibility of the cheese was funded through a state ag diversification grant awarded to the Wisconsin Specialty Cheese Institute, an organization Scharfman led at the time. The organization didn't seem particularly interested in the project, he says, so he was the one most integrally involved and the one whose company launched it.
When it first was introduced, though, no one ever would have guessed it would be a success one day.
"It failed miserably," Scharfman says simply. "The world isn't waiting for another gourmet snack."
If it hadn't been for a doctor or two, that's where this new product introduction might have ended. However, at about the time the product line was really stagnating, a Wisconsin doctor who had seen the product in a store got in touch with Scharfman and told him he was "missing the boat" — there was another niche for the product. Crunchy Baked Cheese had a future as a diet food, the doctor suggested.
Enter Dr. Robert C. Atkins, creator of the Atkins Diet, a weight loss method that requires adherence to a diet rich in protein and fat — but not carbohydrates. The Wisconsin doctor suggested Scharfman contact Atkins to see if he would be interested in the product.
So Scharfman sent some samples to Atkins, only halfheartedly expecting to hear back from him. To his delight, though, Atkins contacted him soon thereafter.
"It was amazing," Scharfman says. "It was like sending something to Jay Leno — but Leno usually doesn't call back. Dr. Atkins did."
That was in the spring of 1997, and by that summer Specialty Cheese Co. was selling its Crunchy Baked Cheese — quite possibly the only cheese in the world that can be considered a diet food — on the Internet to those on the Atkins Diet.
"On the Atkins Diet you can't have anything crunchy or salty — no chips, crackers or pretzels. We have invented the salty snack category for people on this diet," Scharfman says of the product that even comes in chip-like flavors: white Cheddar, garlic and herb, sour cream and onion, jalapeno and nacho.
And this, he believes, could eventually result in a major financial boon for the company.
"The salty snack category is a $20 billion category. If we can capture 0.1 percent of $20 billion, we'd be doing quite well," he says with a smile.
Since taking the Atkins Diet approach to marketing Crunchy Baked Cheese, Specialty Cheese Co. itself has had to do very little in terms of marketing.
Atkins has featured the product in his diet materials and on his website where the product is described as "The mouth-watering flavor of Wisconsin cheese, with a thunderous crunch! Just like the snack chips you remember with practically NO carbohydrates and more than 30 percent of your recommended daily value of calcium. It's like a dream come true." The product also is featured on Specialty Cheese Co.'s website, where Scharfman says web users from all around the world come to order the product. It's not unusual to ship a case of the cheese, which comes in individual 2-ounce plastic packages and 3/4-ounce boxes, as far away as Argentina, he says.
The interest in the product is such that, although Scharfman won't disclose his actual production or sales figures, the product line has just about doubled in sales every quarter since 1997.
"Granted it started small," Scharfman says, "but that's exponential growth." The product now makes up about 15 percent of the company's business.
 Scharfman is sure there is even more growth potential out there. This spring, he plans to begin rolling the product line out in upscale grocery and health food stores. Provided that he can keep up with demand, he would someday like to roll out the production in traditional supermarkets as well.
• Tribal marketing
Although for now Specialty Cheese Co.'s marketing efforts and production growth are largely being devoted to Crunchy Baked Cheese, Specialty Cheese Co. also has plans for its other product lines as well.
This spring, the company plans to launch another new product — Queso Blanco con Guava™, a sister product to the company's pineapple and mango-filled Queso Blanco con Frutas™, a soft, non-melting cheese with fruit that can be fried and served as an appetizer. The guava product is expected to be popular with Cuban customers, Scharfman says. In addition, Specialty Cheese Co. also plans to begin more heavily marketing its La Vaca Rica brand Mexican-style cheeses in some of the nation's leading supermarkets this year.
All of this is being done with the hope that within the next year, Specialty Cheese Co. will be breaking ground for a new plant. The Watertown, Wis., site that's being leased is somewhat of a stop gap measure until the building of a new plant is finalized. The new facility, proposed to be a 20,000-square-foot manufacturing site in south central Wisconsin, won't replace the company's other plants (a decision on the leased facility hasn't been made yet) but will simply allow the smaller, older plants to be dedicated to smaller, extremely specialized products, Scharfman says.
With the building of the new plant, Scharfman also hopes to spread out his overhead and enhance the specialty cheese industry in Wisconsin by creating a "specialty cheese condominium™," a place where other cheese companies can make their own cheese and share with Specialty Cheese Co. generic functions such as milk intake and building upkeep. Scharfman says other companies have expressed interested in the idea, and he's applied for a patent on the concept.
In general, Scharfman sees a lot of potential growth ahead for his company, which is why he wants to build the new plant. With increased fragmentation in this country caused by consumers who are increasingly willing to express their desires about food products and who have a strong interest in ethnic foods, Specialty Cheese Co. wants to expend more effort in "tribal marketing," Scharfman says. Tribal marketing, a term coined by Scharfman, attempts to reach various ethnic groups in America that often aren't able to get once-familiar cheeses from their homelands.
The company's cheeses are very similar to the authentic cheeses produced in the far-flung corners of the world and are better in many instances simply because they have a longer shelf-life, Scharfman goes on to say. Many would-be competitors simply can't be imported because they don't have the shelf-life to make it across the ocean, he adds.
Some of the markets Specialty Cheese Co. has placed itself in are small, Scharfman acknowledges. Nevertheless, they are strong and steady markets and niches that have done well for the company. Other niche markets are a possibility as well someday.
"We do niches," Scharfman says. "One set of niches is the ethnic market. By luck, we ended up in the diet niche with patented products. There are other niches too — but we have plenty to do now with rolling out Just the Cheese Crunchy Baked Cheese and other products in retail markets."
CMN |
