RICHFIELD, Wis. — With a new owner, new office space and new cheeses, this past year has been one of exciting change and opportunity for DCI Cheese Co., a specialty cheese company based here. The recent developments in some ways culminate an intense period of change, and at the same time are the beginning of what DCI Cheese executives believe is a chapter in which the company will grow to be even more successful.

“Our goal is to be the best specialty cheese company in North America,” says Dominique Delugeau, vice president, sales, DCI Cheese.

DCI Cheese is a company unique in its approach to business. Founded in 1975 as a brand-building consulting firm by Dan Carter, who since has retired, the company grew over time into a cheese marketer, manufacturer and business partner to Midwest cheesemakers. Rather than being “just” a cheese company representative or simply providing outside help and suggestions to build brands, DCI Cheese executives believe in a hands-on approach, partnering with other dairy companies.

“Representation comes and goes,” Delugeau says, noting that DCI Cheese is different in that it owns brands outright and has long-term partnerships with other companies.

In addition, DCI Cheese holds stakes in a number of manufacturers, infusing capital into its partners to help get brands developed and to give the cheesemakers the necessary resources to produce and age their products.

“By taking possession of product, it takes our relationships to a different level,” says Linda Hook, vice president, marketing, DCI Cheese.

Because DCI is a company based on production with a wide range of plants, it is not limited to only one product or a single market. This has helped it grow into being a leading supplier in the specialty cheese market, according to Hook.

“And we plan to keep growing our brands through organic growth and acquisitions,” Delugeau adds, saying that an acquisition is likely in 2006.

One of the developments in the past year that will help DCI do that is its own acquisition in April by Fairmount Food Group LLC, a Dallas-based investment firm. DCI had been approached with acquisition offers in the past, but when the company was approached about a year ago by Fairmount Food Group, the executives saw a group that shared their vision for the company.

The influx of capital will allow DCI to accelerate its strategy, says Tim Omer, president, DCI Cheese. Rather than needing five years to reach a particular goal, DCI now hopes to get the same amount done in one year.

Omer, Hook, Delugeau and Stacy Kinsley, executive vice president, have retained an equity stake in the new venture and have continued in their respective management roles.

Now DCI is looking to add more employees, take on more customers and sell more cheese.

Hook says the company needed more capacity and the ability to round out its product offerings before taking the company to the next level. Omer adds that the company plans to focus on packaging and conversion capabilities during the next several months.

In preparation for bigger and better things, the company slowly is beefing up its sales force, including adding a new Southeast regional sales manager, Mike Redington, who will join the company in a couple weeks, Delugeau says.

Long headquartered in Mayville, Wis., DCI Cheese also relocated its offices to Richfield, Wis., in August. The company now has about 12,000 square feet of space there, providing room for additional employees. The space also includes 2,000 square feet of warehouse space, a large cooler and a loading dock. While DCI Cheese doesn’t typically handle cheese at its offices, the warehouse space gives the company a better opportunity to handle product samples for new customers and promotions, Hook says.

In terms of investment in its partners, several capital improvements have been made at partner cheese plants as well. For instance, 8,700 square feet has been added to the Salemville Cheese Co-op plant in Cambria, Wis. This expansion includes a packaging room, cooler space, shipping dock, office and employee lunch and locker rooms.

Recently USDA status was obtained at its joint venture partner Meister Cheese Co. plant in Muscoda, Wis., which also has added expanded conversion capabilities. In addition, the Great Midwest brand, produced at Meister Cheese, has added new Jack flavors this past year including Roasted Red Pepper Jack, Smokey Jack, Buffalo Blue Jack and Ranch Jack. The Great Midwest label also received a facelift, featuring a new logo created by a Wall Street Journal artist.

Also new are four party trays under the Legends of Cheddar, International and Party Express brands, featuring imported slices and cubes. The Party Express brand itself is new.

The company participates in a number of marketing activities, among them a new eight-brand recipe brochure series, a broker sales incentive contest and a regional Gallo wine cross-merchandising program for the new product introductions.

Several new DCI Cheese products are on the horizon, too, including new Feta products in the next four to five months, says Hook.

DCI Cheese, which offers both domestic cheese as well as selected imports, also has just introduced three new Spanish cheeses under the Cum Laude brand. The cheeses include Idiazabel, a sheep’s milk cheese; Mahon, a cow’s milk cheese; and Murcia al Vino, a goat’s milk cheese brined in wine.

Iberico, a cow, goat and sheep’s milk blended cheese similar to Manchego, also recently was introduced as was a Danish Blue.

The cheeses just now are hitting store shelves and also are available for foodservice, according to Delugeau. In fact, while the company always has tended to focus more heavily on the retail market, it also is exploring new avenues for foodservice, says Delugeau. The company has created a new foodservice division, led by Tony Salathe, to provide a more enhanced, value-added focus on this market segment.

That doesn’t mean the company will be changing its focus on retail, though. Hook notes that the retail market is changing a great deal, providing many new selling opportunities. DCI Cheese is busy staying on top of the new trends and the changing ways consumers buy cheese.

Delugeau notes that consumers have diverged into two groups, those who are sophisticated, like to cook and who are looking for upscale products and those people who have less and less time and who are seeking convenience products. But just because some consumers have less time doesn’t mean they don’t seek high-quality products.

“There are some very high-quality prepared foods on the market right now,” Delugeau says, calling this a great opportunity for specialty cheeses. He notes that the company is offering more cubed, sliced and shredded cheese than ever before so that specialty cheese is convenient and attractive for consumers.

Another area where the company is seeing exceptional growth is in the organic cheese business, where demand has been so strong that there seems to be a shortage of organic cheese across the country, Delugeau says. To meet the growing demand, DCI Cheese has introduced new products under its Organic Creamery brand during the past year-and-a-half, including Blue and Gorgonzola crumbles.

DCI Cheese also has noted that there isn’t a great deal of 3- to 4-year-old aged cheese on the market, and finds that this is an area in which DCI Cheese stands out by offering extra-aged cheeses.

Delugeau notes that the commodity business isn’t where DCI Cheese is best positioned to succeed, although it does offer some commodity cheese as part of its effort to be a one-stop shop for customers.

“We aren’t the largest supplier to the largest companies, but we do have some large customers who we supply a segment of their cheese needs,” Delugeau says.

One of DCI Cheese’s strengths is that it is large enough to meet a wide variety of specialty cheese needs. The U.S. specialty cheese market tends to be fragmented, with many small producers, but DCI pulls together cheeses from a variety of sources.

The company also is large enough to have the latest technology for which retail customers are looking, and works hard to keep ahead of the next wave of technology, Delugeau says. This is more difficult for smaller specialty cheese producers who don’t have the same level of resources.

And yet DCI Cheese is small enough to be flexible.

“Our turnaround time to market is second to none,” Hook adds.

CMN