SCHENECTADY, N.Y. — F. Cappiello Dairy Products Inc. is in the midst of major growth, adding both new markets and production capacity.

One of the company’s most recent achievements is its first export sale, says Julianne Cappiello-Miranda, vice president, sales and marketing. The company shipped its marinated braided Mozzarella to Taiwan for the first time just last month.

Miranda says that targeting international markets is part of an overall marketing strategy for the company, which has seen rapid growth in the past few years.

The family-owned company dates back to 1921 when Miranda’s grandparents, Francesco and Lucia Cappiello, hand-crafted Mozzarella and fresh Ricotta in their kitchen using recipes from their native Italy. Francesco Cappiello worked on the railroad by day, and Lucia sold the cheese door-to-door. The family later incorporated the business, and today it is operated by the third generation of the Cappiello family, including Miranda’s brother Peter Cappiello, who is processing plant superintendent. The Cappiello children all worked at the plant while they were growing up, and Miranda says that requirement was “one of the best things that my parents ever did.”

Today, the Cappiellos have molded F. Cappiello Dairy Products Inc. into a business with sales nearing $9 million

and a reputation for traditional Italian items as well as Italian items with a twist.

Often people’s first thought when they hear “Mozzarella” is a pizza cheese or other foodservice product. And while Cappiello does do about 30 percent of its business in the foodservice sector, its products are anything but commodity and instead focus on high quality. The company’s products include part-skim and whole milk Ricottas, Impastata, part-skim and whole milk Mozzarellas and smoked Mozzarella.

In the 1990s, the Cappiello family also thought the market was ready to see braided flavored Mozzarellas added to the company’s line of Italian cheeses.

The company introduced its marinated Mozzarella braid, which is marinated in extra virgin olive oil, garlic, red pepper and parsley, in the late 1990s, and it has been recognized in numerous competitions since, including winning the International Dairy-Deli-Bakery’s best new dairy product award in 1999 and American Cheese Society competition ribbons.

“We’re very happy with the reception our specialty, hand-braided Mozzarella cheese has received,” Miranda says.

The marinated braid, though the first to be shipped overseas, won’t be the only one. Products the company will be shipping internationally include tomato and basil and smoked Mozzarella braids as well. The company also makes a plain braided Mozzarella.

“Cappiello is thrilled and privileged to be able to export a high-quality product to Taiwan,” says Vincent Staiger, national sales manager, Cappiello, who was hired in May 2003 to help expand the company’s presence both domestically and internationally. “We’re confident consumers in Taiwan and other Pacific Rim countries will enjoy the product.”

Other international markets being targeted include South Korea, Japan, Canada and Mexico.

Interest in exporting Cappiello’s products to international markets is being sparked by demand for its products in the United States. The company’s products have a national reach and currently can be found in supermarkets such as Safeway and Kroger and national retailers like Costco, Wal-Mart and Sam’s Club as well as specialty foods stores, Miranda says. Costco’s international operations are the importer of Cappiello’s first cheese export.

The company has been diligent in putting its focus on market development during the past few years, Miranda says. This has included hiring Staiger as sales manager and utilizing a public relations firm. Cappiello also has a presence at trade shows and does many demos throughout the year.

“I’ve flown to Chicago and done a personal demo for a customer just to show how happy we were they took our products on,” Miranda says.

Cappiello works with a number of marketing programs to promote its products as well.

“We’ve worked successfully with the state of New York’s ‘Pride of New York’ program to promote the state’s agricultural products, and we’re also indebted to our regional retailers like Price Chopper who have supported our product over the years,” Miranda says.

All of the company’s products are certified by the Orthodox Union as kosher. This also is a marketing tool that the company utilizes because Cappiello wants to provide “people who keep kosher a product that’s good and reasonably priced,” Miranda says.

The company is continuing to work on expanding its market presence with new SKUs of its gourmet Italian cheese. Next in line for expanded distribution is Cappiello’s Scamorze, a blend of Mozzarella and Provolone, which is aged 90 days or more. The company is reducing the size of its Scamorze from 14 ounces to 10 ounces to expand its appeal.

“Scamorze is a personal favorite of mine,” Miranda says. “I think it offers a number of promising opportunities in terms of marketing and packaging, and we’re now trying to offer it at retail at a more affordable price to consumers.”

Flavored Scamorze varieties are a possibility for the future, she adds.

As the company adds products and customers, expansion of the plant — which already was expanded about 15 years ago — has become necessary once again. This past year, the company has added two 37-foot milk storage silos and a high speed packaging machine. In addition, the company has made electrical upgrades for energy conservation as well as plumbing and piping upgrades throughout the facility.

The company also is in the planning stages to increase the size of its facility by 25 percent, production capacity by 75 percent and employment by 15 percent. Currently the company has approximately 55 employees.

“Cappiello’s goal is to become one of the top five brand names in the specialty market,” Miranda adds.

The company produced 625,000 pounds of specialty Mozzarella (braids and Scamorze) in 2002, and 907,400 pounds in 2003. While growth is focused on the gourmet cheeses, she notes that F. Cappiello Dairy continues to produce more than 4.2 million pounds of Ricotta and 1.5 million pounds of Mozzarella each year.

“You could say our traditional Mozzarella and Ricotta are still our bread and butter,” Miranda says. “We’re very satisfied that we maintained our highest quality standards despite competition from the national brands.”

CMN