July 18, 2008
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LAUNCH OF NEW MEDITERRANEAN-STYLE PRODUCT — Karoun Dairies has launched Labne, also known as kefir cheese. The product has a distinctive tangy flavor and is creamier and thicker than yogurt. It can be served as a dip for pita bread and vegetables, used to tenderize meat or added to stews and soups.

MADE FOR GRILLING — Karoun Dairies has introduced Yanni grilling cheese, a semi-firm, white cheese with a light yellow tint and a layered texture similar to a chicken breast. The cheese can withstand a tremendous amount of heat without melting, staying relatively firm and developing a golden crust.

By Kate Sander

TURLOCK, Calif. — This past year, specialty cheese manufacturer and distributor Karoun Dairies Inc. doubled its production space, adding the ability to produce a number of new cheeses and Grade A cultured products. The company now has 80,000 square feet of plant space in Turlock, Calif., which includes a new Interstate Milk Shippers-approved Grade A cultured plant with a state-of-the-art lab.

The expansion, says Rostom Baghdassarian, COO of Karoun Dairies, is allowing the company to keep pace with the growing demand for specialty cheeses, including the company’s mainstay Fetas and hand-braided String as well as a number of other products, including goat’s milk cheese, Yanni grilling cheese and new cultured products.

• Realizing the American dream

The expansion is just the latest step in the realization of the American dream for the Baghdassarian family. Karoun Dairies has been making cheese in the United States since 1992, but it has its roots in Lebanon long before that. Rostom Baghdassarian’s grandfather started Karoun Dairies in Lebanon in 1931. Later his son, Anto Baghdassarian, Rostom’s father, joined the business and modernized the family plant, enabling it to serve as a main supplier for Lebanese chain stores, hospitals and troops of the United Nations and the U.S. Navy’s Sixth Fleet.

But civil unrest made life difficult in Lebanon, and the family made the decision to immigrate to the United States in 1990. In 1992, Anto Baghdassarian embarked on the American dream, restarting the family’s once-successful business from scratch in California, buying curd and making String cheese. Even with years of experience, though, it wasn’t always easy.

“Making Near Eastern-style cheese with California milk was like reinventing the wheel. The cultures and techniques had to be tailored to our milk,” says Anto Baghdassarian, company CEO.

But the company adjusted, modifying its make procedures to accommodate different milk and a milder American palate.

The company started out making its cheese primarily for ethnic grocers as well as high-end specialty stores, and it quickly gained a following. By 1999, the Mediterranean cheese business was booming, and the company purchased and modernized an existing cheese plant cheese in Turlock, Calif., and incorporated the plant under Central Valley Cheese Inc.

“The plant allowed us to better control quality and keep products consistent,” says Rostom Baghdassarian, who, after growing up in the business — starting with washing buckets at the plant in Lebanon — officially joined his father in the business in 1998 after graduating from University of California-Los Angeles.

Since then, the company has continued to grow, and a few years ago it became evident that the company would need to expand in order to keep pace.

• Just the right size

Even though the plant is now bigger and can produce more cheese than ever, Rostom Baghdassarian notes that the company still is only “medium-sized” which gives it the flexibility to manufacture a variety of products that fulfill various customer demands.

While the company’s customer base has always been niche markets, the company is finding itself expanding into the mainstream market.

“We’ve been an ethnic leader for 10-12 years, so our growth is coming from the mainstream market,” he explains, noting that several recent additions, including the company’s Mediterranean-style probiotic all-natural, rbST-free yogurts, are finding favor among a wide spectrum of consumers.

“We’re seeing more cross-over,” Rostom Baghdassarian says. “The Mediterranean diet has become popular as part of a healthy diet.”

Baghdassarian says the company’s sales currently are about 60 percent ethnic markets and 40 percent mainstream.

The company has had to adjust some of its products to better meet the demands of mainstream consumers who like their Feta with less salt and generally want less bite than ethnic consumers do, Rostom Baghdassarian says. However, the company still is just the right size for being able to meet large orders but also adjusting flavor profiles as needed.

“We can customize based on customers’ needs,” he says.

• New product line up

Karoun Dairies offers a number of different products under several of its own brand names as well as private label. It offers four varieties of hand-braided String cheese: original, marinated with garlic and herbs, all-natural hickory smoked, and black caraway seed. These and the company’s Fetas, including a double cream Feta, are available nationwide in ethnic, specialty and club stores.

The company also sells basket cheese, fresh curds in basket form, under the Central Valley Creamery and Karoun labels. The Karoun brand includes the company’s Mediterranean cheeses.

A number of Hispanic cheeses are available under the Queso del Valle brand such as Queso Fresco, Cotija, Panela, Oaxaca and Crema. Arz is the company’s Middle Eastern line, which includes Ackawi and Nabulsi.

Now that the company has more production space, it is adding more new products. The first of those new products was launched at the International Dairy-Deli-Bakery Association’s (IDDBA) annual convention last month.

Gopi, the company’s Indian dairy line, was among the products introduced at the show. The company introduced Paneer cheese, Indian-style yogurts and Lassi, an Indian yogurt drink in plain and mango flavors, as part of this line.

The company’s Labne, also known as kefir cheese, is among the new products as well. A Mediterranean-style yogurt cheese, it is a centuries’ old product created by nomads in the Mediterranean region. Labne has a distinctive tangy flavor and is creamier and thicker than yogurt. The product has a variety of uses, says Rostom Baghdassarian. It can be served as a dip for pita bread and vegetables, used to tenderize meat or added to stews and soups. It is a healthier alternative to cream cheese, he says.

In determining what new products it will introduce, Rostom Baghdassarian says the company always goes back to its roots. With that in mind, the company also is expanding its Mediterranean-style yogurts which are growing in popularity.

The company also recently introduced Yanni grilling cheese, a semi-firm, white cheese with a light yellow tint and a layered texture similar to a chicken breast. The unique feature of this cheese is that it can withstand a tremendous amount of heat without melting, staying relatively firm and developing a golden crust. Yanni is mildly salty with a rich, butter and slightly tangy taste. The cheese is ideal for a variety of Mediterranean cuisines that require cheese as an ingredient, or it can be enjoyed fresh with fruits or in salads, Rostom Baghdassarian says.

• Quality and family atmosphere

Karoun Dairies does a great deal of product sampling, and its Yanni grilling cheese was a hit at the IDDBA show, Rostom Baghdassarian says. In general, he says the company’s products demo well, and the company sees sales increases after demos.

In addition to demoing and trade shows, the company has a television and newspaper ad campaign in major markets across the United States where its products are sold in mainstream stores. In mainstream markets, the company’s products are strongest on the West Coast but the company also is experiencing growth in the Midwest and East.

For ethnic markets, the company continues to rely on word-of-mouth, which always has proved successful for the business.

Rostom Baghdassarian says the company’s success lies in family-business atmosphere and focus on quality. In addition to Anto and Rostom Baghdassarian, Anto’s son-in-law, Tsolak Khatcherian, a CPA, is the CFO. The 70 employees are key to the business and considered as family members, they say.

“We value our employees. Without our employees, we wouldn’t be where we are today,” Rostom Baghdassarian says. “Everyone who works here has the same objective: to uphold quality and customer satisfaction.”

This dedication has been acknowledged by the company continuously receiving a gold seal from Silliker laboratories.

Karoun Dairies is focused on making the highest-quality product possible.

“Our customers are looking for quality, not price,” Rostom Baghdassarian adds. “We don’t want to compete with a plant that runs 24/7. We allow enough time to the cultured milk to develop its aromatic flavors and then process the milk. We don’t rush the production.”

Anto Baghdassarian, as CEO, continues to keep a close eye on cheese production even as the company grows.

“Good cheese can never come automatically out of a machine,” he says.

CMN

Clarification

In the July 18, 2008 issue, Cheese Market News published an article on Karoun Dairies, Inc., of Turlock, California, operated by Anto Baghdassarian and his son, Rostom. The article refers to Karoun Dairies, Inc. of the United States, and not to any company that might employ the Karoun name outside the United States. Other members of the Baghdassarian family operate Karoun Dairies S.A.L. of Beirut, Lebanon. The two companies are not affiliated.

CMN