Clover sees big future in cheese
Published: Sunday, May 5, 2013 at 9:23 a.m.
Last Modified: Sunday, May 5, 2013 at 9:23 a.m.
The owners at Clover Stornetta Farms think they know how a local dairy company can build a national brand: Turn Clo's North Coast milk into cheese.
The Bay Area's largest independent milk processor is staking its future on creating more dairy food products and placing them in new markets. The first effort is a new line of cheeses made solely with milk from Clover's member dairies, nearly all of them linked to the storied grasslands of Sonoma and Marin counties.
“My hope is that we will become as much a cheese company as we are a milk company,” said President/CEO Marcus Benedetti, 37, whose grandfather founded the Petaluma-based Clover.
Benedetti's father, 64-year-old board chairman Dan Benedetti, fondly attributed such a grand goal to “the horizon of young people.” Nonetheless, he suggested that Clover's new products are good enough to compete with cheese giant Kraft and even to take away some market share.
“We certainly need it and they can afford to lose it, the way I look at it,” said Dan Benedetti.
The new products represent the most ambitious initiative of the company's third generation of leaders, which includes not only Marcus Benedetti but his sister Joanie Benedetti Claussen, the director of marketing, and cousin Mkulima “M” Britt, the chief financial officer.
Marcus Benedetti deadpanned that Clover “didn't bet the farm” on the success of the new cheeses. But he said the company must keep building revenues in order to remain healthy and family-owned.
“We have to grow,” he said. “If you don't grow, you eventually slowly wither.”
The company, whose billboards have made Clo the Cow Sonoma County's most-recognized business mascot, reported $135 million in sales last year. It has 223 workers and is known for local milk, a long-standing presence at county fairs and other events, and strong ties to independent supermarkets.
“They're the archetypal food manufacturer in Sonoma County,” said Tom Scott, general manager of Cotati-based Oliver's Markets.
Scott and others suggested the outcome of the company's efforts will affect the greater agricultural community. Success in cheese, said Scott, will allow Clover to keep paying “the premium that Sonoma County dairymen need to ranch on this part of the world.”
The North Bay's dairy industry is California's oldest, producing the region's second-largest agricultural crop after grapes.
But dairies here are buffeted by the same forces that have caused conventional milk farmers to lose money for four out of the last five years, said Michael Marsh, CEO of Western United Dairymen in Modesto. In that time, one out of five California dairies has closed, and more North Bay farmers have switched to organic production or sought other ways to distinguish their milk from a mere commodity product.
Some of the remaining 100 Sonoma and Marin dairies have turned to making cheese or selling milk to local cheese makers. With roughly 30 artisan cheese companies, including those using goat and sheep milk, the North Bay has gained a reputation for producing quality cheese, a “New World counterpart to Lombardy and Normandy,” as the New York Times put it a dozen years ago.
In a way similar to the dairy farmers, Clover's owners found themselves looking for new opportunities and turning to cheese.
Clover Stornetta was founded in 1977 by World War II hero Gene Benedetti and six partners. Two years ago the extended Benedetti family members acquired the remaining outstanding stock and became the company's sole owners, Marcus Benedetti said.
Clover has sold cheese for a quarter century, though previously it wasn't produced solely with milk from this region or the company's member dairies.
Clover began the same way with milk. In the early days much of its product came from outside the area and was bottled in the Central Valley.
But in 1993 the company built its own bottling plant in Petaluma. A year later, as Clover took a stand against using the artificial growth hormone rBST in cows, it began to acquire all its milk from selected dairies based on milk quality and the farmer's commitment to abiding by certain humane farming and environmental practices.
That switch allowed Clover to attract new consumers who were willing to pay a premium for its conventional and organic milk. The company grew enough to ship milk outside the Bay Area to Southern California, Nevada, Arizona and as far east as Jackson Hole, Wyo.
But for the future, Clover's owners see limited opportunities to expand sales for fluid milk, a relatively perishable product and one whose per-capita consumption has slowly declined in the U.S. for nearly four decades. During that time, per-capita cheese consumption has roughly tripled.
Clover spent more than two years devising a growth strategy and developing the new cheeses. The company made partnerships with three separate cheese makers in Modesto, Willows and near Eureka, with each one making the varieties they know well.
The result aims for what company officials call an “everyday artisanal” niche, something between commodity cheese and super-premium brands.
“We had to make a cheese that works at Oliver's but also works at Lucky,” said John Bortells, the company's vice president of sales and marketing.
What Clover touts about its cheese is the quality of the North Coast milk it is using — a feature outsiders agree is a key part in making good cheese. One of its dairies is located in Humboldt County, another prime milk region, while the rest are in Sonoma and Marin.
“Clover is giving the customer an opportunity to eat a great cheese and they know where it comes from,” said Bortells, a former vice president for Pepsi Lipton.
Clover last month began shipping cheese in block, shred and sliced forms to local stores.
Teejay Lowe, CEO at G&G Supermarkets, called it an easy choice to sell the cheese because of Clover's loyal following.
“It's such a strong brand up here in Northern California,” Lowe said.
Later that day shopper Rick Thorson stopped at the cheese aisle of the Santa Rosa G&G store and selected a Clover sharp cheddar, a 12-ounce block for $5.99. For the same price he could have received an extra four ounces of the Kraft or Tillamook varieties — though last week both were cheaper than Clover simply because they were offered with special discounts.
Asked why he chose that particular cheese, Thorson replied, “Because it's local ... I support Clover big time.”
U.S. retail cheese sales reached $17.4 billion last year, according to the Speciality Food Association. Most of the sales involved what is deemed a commodity product. But $3.6 billion of those sales were considered specialty cheeses.
Lynne Devereux, marketing manager for Marin French Cheese Company and Laura Chenel's Chevre, said Clover's new products are coming out at a time when regular supermarkets are offering more quality cheeses. Her companies' research suggest the reason is that consumers are looking for cheese “that's got more flavor and more authenticity.”
“They don't want the plain old white bread brand anymore,” Devereux said. “They want something tastier.”
Clover will release new organic cheeses this summer. It has scheduled talks with retailers outside the Bay Area and seeks one day to build “a national cheese program,” said Benedetti Claussen.
Clover's officials acknowledged they've received past offers to sell the company. But they dismissed the thought of ever doing so.
“That's not us,” said Dan Benedetti, who maintained “we're looking forward to a fourth generation” to one day lead Clover.
Doug Beretta, a Santa Rosa organic dairy farmer who sells his milk to another company, said many of his peers will be watching the outcome of Clover's efforts.
“I hope it moves in the right direction,” said Beretta, a former president of the Sonoma County Farm Bureau.
When a dairy processor succeeds, he said, it strengthens the entire local industry. When a company fails, it can mean one less place to sell milk “and it just puts us all in a bind.”
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