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$13.50 CHEESE REPORTER $12.50 $11.50 Vol. 132, No. 35 • Friday, February 29, 2008 • Madison, Wisconsin $10.50 2005 2006 2007 2008

Alto Dairy Co-op Members USDA Proposes Class I Price Hike In Approve Sale Of Assets To Saputo Cheese USA Fond du Lac, WI—Alto Dairy Three Southeastern Federal Orders Cooperative announced Wednesday Citing Emergency Marketing Southeast orders: 25 percent of Appalachian order, approximately that its members have approved the Conditions, USDA Skips deliveries to pool plants during the $17.5 million for the Southeast sale of the co-op’s assets to Saputo order and approximately $38 million Recommended Decision months of January, February, July, Cheese USA Inc. for total consider- August, September, October and for the Florida order. ation of $160 million. Washington—The US Department November, and 35 percent for the In estimating the impact on min- The sale, which was unanimously of Agriculture (USDA) today pub- other five months. imum producer prices, blend prices approved by Alto’s board of directors lished a tentative final decision that •Reduce touch-base standards to will increase by about 26 cents per in January, was voted on and increases Class I prices in the one day each month for the hundredweight for the Appalachian approved by 98 percent of the co- Appalachian, Southeast and Florida Appalachian and Southeast orders. order, approximately 64 cents per op’s members who attended a special federal milk marketing orders. •Add January and February as hundred for the Southeast order, and member meeting held in Fond du The decision, which requires pro- months when transportation credits $1.19 per hundred for the Florida Lac on Wednesday. ducer approval before being imple- are paid for the Appalachian and order. A large number of Alto Dairy mented, also proposes to amend Southeast orders. The proposed changes are based members from across Wisconsin and certain features of the diversion •Provide for the payment of on the record of a public hearing Michigan’s Upper Peninsula limit, touch-base standards and transportation credits in the held last May in Tampa, FL. That attended the meeting to vote on the transportation credit provisions for Appalachian and Southeast orders hearing had been called in response proposed asset sale. the Appalachian and Southeast for full loads of supplemental milk. to a petition from Dairy Cooperative Rich Scheuerman, Alto Dairy’s orders. •Provide more flexibility in the Marketing Association (DCMA), president and chief executive officer, USDA also determined that qualification requirements for sup- which consists of nine dairy cooper- called it a “historic day” for Alto. emergency marketing conditions plemental milk producers to receive atives that market and pool their Approval of the sale by Alto’s mem- exist that warrant omitting the transportation credits for the milk in one or more of the three bers “will strengthen the business by issuance of a recommended decision. Appalachian and Southeast orders. orders. improving the long-term viability of The tentative decision specifically •Increase the monthly transporta- At last May’s hearing, a witness our manufacturing facilities, provid- proposes to immediately adopt tion credit assessment from 20 to 30 appearing on DCMA’s behalf testi- ing job stability and a long-term pur- amendments that: cents per hundredweight in the fied in support of temporarily chaser of milk for dairy producers in •Adjust the Class I pricing surface Southeast order. increasing minimum Clas sI prices Wisconsin.” in each county within the geograph- According to USDA, the Class I in the three orders. The witness tes- The 114-year-old dairy coopera- ical marketing areas of the price increases adopted in this deci- tified that all elements of the pro- tive makes American- and Italian- Appalachian, Florida and Southeast sion would generate higher mar- posals for the three orders are offered style cheeses at its plants in Waupun orders. ketwide pool values in all three as a “single package” to address the and Black Creek, WI. Cheese and •Make diversion limit standards southeastern orders by approximately whey produced by the co-op are mar- identical for the Appalachian and $18 to $19 million for the • See Class I Prices Hiked, p. 26 keted nationwide under a variety of brand names and private labels. Use Of Name ‘Parmesan’ With Double The Protein, Greek-Style Yogurt “Alto Dairy has always been rec- Hasn’t Become Generic, ognized as an industry leader and Infringes On PDO Touted As ‘Next Big Thing’ For US Market today is no different,” said Howard Protection For Parmigiano FAGE USA Begins Production Of $31.6 million in 2007. Greece sup- Zellmer, chairman of Alto’s board of directors and a dairy farmer from Reggiano, EU Court Rules Greek Yogurt In New York State plies about 80 percent of all US Montello, WI. Madison—Increased popularity of yogurt imports, FAS figures show. Luxembourg City, Luxembourg— “Although it is hard to see an end Greek-style yogurt is no trend – it’s In the US, Stonyfield Farm, Lon- Because Germany has failed to show to the cooperative form of business a growing segment in the yogurt cat- donderry, VT, began producing that the name “Parmesan” has at Alto, our board is pleased that we egory which appeals to everyone authentic strained Greek yogurt in become generic, use of the word were able to provide an economic from gourmets to dieters to athletes. May 2007. It is now distributed “Parmesan” for cheese that does not return to our members for their comply with the specification for the Demand for Greek-style yogurt is nationally in natural foods and gro- also an indication that the US cery accounts, including Whole investment and loyalty to the coop- protected designation of origin erative,” Zellmer added. (PDO) “Parmigiano Reggiano” yogurt industry is returning full-cir- Foods Market, Stop & Shop, Kroger cle, embracing technologies that and Wal-Mart. The asset sale is expected to close infringes the protection provided for sometime during March. that PDO, the European Court of harken back to traditional European Stonyfield Farm made the deci- methods and flavors. Nowhere is sion to produce a Greek yogurt Saputo Inc. said the acquisition of Justice ruled Tuesday. Alto’s assets will enable Saputo Under the European Union’s this more evident than in the under the “Oikos” brand once it growth of yogurt imported from could locate a partner capable of Cheese USA to expand its business (EU) PDO regulation, products reg- and represents a major step in its istered as a PDO are protected Greece. making an authentic, strained As recently as 2002, USDA’s For- goal to achieve a stronger presence against “any misuse, imitation or Greek-style yogurt. eign Agricultural Service (FAS) fig- in the US. • evocation.” Generic names may not, It’s the straining process that ures show that US imports of yogurt however, be registered, and regis- helps deliver the incredible creami- from Greece were less than one mil- tered designations may not become ness and texture of Greek yogurt, lion pounds. By last year, imports of INSIDE THIS ISSUE: generic. said Peter Lewis, director of innova- Greek yogurt had jumped to 19.3 “Drug Residues In Milk” p. 2 Being of the opinion that Ger- tion and business development, million pounds. That was up 70.4 many does not sufficiently protect Stonyfield Farm. World Cheese Contest Sets Record p. 3 percent just from 2006. the PDO “Parmigiano Reggiano,” “Some other brands take a short The value of these yogurt imports Codex Redraft Processed Cheese p. 7 the European Commission brought cut and rely on high fat content, from Greece has risen dramatically, Cancelled Contracts Cause Chaos p. 9 See EU Parmesan Ruling, p. 25 from just $1.2 million in 2002 to • See Greek-Style Yogurt, p. 8 Class III Milk Prices p. 22 12 CHEESE REPORTER February 29, 2008

Greek-Style Yogurt Consumer demand for “ridicu- Continued from p. 1 lously thick” Greek-style yogurt is continually rising, according to Ioan- starches and gelatins to try and nis Papageorgiou, president and approximate a true Greek yogurt’s COO, FAGE USA Dairy Industry, incredible taste and texture...but not Inc. us,” Lewis said. Our partner also had to be organic New FAGE USA Greek Yogurt Plant because we use exclusively organic To Begin Production Next Month ingredients in Oikos yogurt, he con- The leading dairy company in tinued. Greece, FAGE was the first to mar- Oikos will be in one out of every ket Greek-style yogurt in 1975. The three Wal-Mart Supercenters early company’s brand “Total” is FAGE’s this year and is setting sales records signature product. for a Stonyfield Farm new item “The success of Total led other launch, Lewis said. manufacturers outside of Greece to “Without a doubt, Greek yogurt is imitate the product using ‘Greek- Stonyfield Farms’ Oikos. An organic the next big thing in the US yogurt style’ as a product descriptor, but Greek-style yogurt market,” he said. there’s only one authentic Greek It’s not a trend – it’s a new seg- yogurt company,” Papageorgiou said. tantly, production of FAGE in the tional yogurt embraced by consumers ment in the yogurt category, Lewis FAGE USA is currently investing US will not change the taste, texture in the US, Davis said. said. It appeals to a wide variety of about $80 million to build a new pro- or price of Total yogurt. It also has a higher butterfat con- consumers and offers something for duction facility in Johnstown, NY, According to Papageorgiou, tent – Cabot’s is 10 percent butterfat everyone. designed exclusively for production FAGE is the first and only company – than typical American yogurts, Gourmets appreciate Greek of FAGE Total Yogurt. The plant is to provide customers strained yogurt many of which are the nonfat vari- yogurt’s unique, delicious taste and expected to be fully operational by due to its unique, proprietary manu- ety. texture, and it makes an ideal cook- next month. facturing process. Cabot is developing and will soon ing ingredient, Stonyfield’s Lewis The new facility will enable the During production, the yogurt is release a reduced fat version of its said. company to maintain current retail strained to remove most of the whey Greek-style yogurt, Davis continued. “Dieters love that it has such a prices and ensure support for its mar- from the milk; typically, four liters of Earlier this month, AgroFarma, creamy, indulgent taste, yet is fat-free ket growth strategy, Papageorgiou milk will produce a liter of yogurt. Inc., a dairy manufacturer based in and lower in carbohydrates com- said. Made of only two ingredients – South Edmeston, NY, introduced its pared to regular yogurt,” he said. FAGE has always planned to bring live cultures and milk – FAGE is free flagship product – Chobani Greek “Athletes love the high protein manufacturing operations to the US of additives, sweeteners and preserv- Yogurt. count of Oikos – double that of reg- and fulfill rising consumer demand atives, and has higher quantities of ular yogurts.” for FAGE Total yogurt. Most impor- protein than other yogurts. Fitness and health-conscious con- “Dieters love that it sumers buy FAGE Total because it has such a creamy, comes in a range between fat-free and full-fat. Based on personal pref- indulgent taste, yet is erence, it can be used both as an fat-free and lower in ingredient or eaten by itself. carbohydrates compared Chefs often use FAGE Total as a to regular yogurt. healthy choice in recipes for foods higher in fat. The exceptionally Athletes love the high thick product won’t separate over protein count...” high heat, which means it can be —Peter Lewis, incorporated into a range of creative Stonyfield Farm recipes.

US GSY Manufacturers Cater To Made using traditional European Americans’ Affinity For Flavors straining methods, this Greek-style Americans favor yogurt that is yogurt contains more than twice the sweetened, while Europeans prefer amount of protein than traditional plain yogurt, FAGE’s Papageorgiou American-style yogurt. continued. “Many of the popular American Vermont’s Cabot Cooperative yogurt brands add artificial ingredi- Creamery introduced Cabot Greek- ents and fillers such as high fructose APT Equipment Style Yogurt just before the 2007 corn syrup and corn starch to holidays after about half a year of enhance taste, or have the equiva- APT's Advanced Cheese Vat (ACV) equals advanced research and development to perfect lent of a candy bar in sugar content,” performance, advanced yield and advanced profits. its recipe, said Jed Davis, director of said nutritionist Sophie Pachella, Developed to increase efficiencies and provide peak performance, marketing, Cabot Creamery. founder of New York’s EatStrong diet the ACV provides reduced curd damage and minimal fat loss. Cabot now offers plain Greek- consultancy. style yogurt in both cups and larger “Chobani packs twice as much Unique, the patent pending rennet inject manifold provides protein as traditional American uniform rennet mixing that enhances milk fat retention. sizes up to 32 ounces, as well as 6- And the patent pending adjustable agitator seal reduces ounce cups of eight different flavors: brands while remaining very low in maintenance, while providing maximum cleaning performance. Chocolate, Dulce de Leche, Honey, simple carbohydrates,” Pachella said. Tropical Fruit, Vanilla Bean, Cherry, AgroFarma was founded in 2005 Strawberry and Peach. with the vision of bringing Greek- Two of our retail partners – Shaw’s style yogurt products to US con- in the Northeast and Publix in the sumers. Chobani is produced under Southeast – have been the earliest to the direction of master yogurt maker Advanced Process Technologies Inc. offer Cabot GSY to their consumers Mustafa Dogan, an internationally For Every Area of Your Plant so far and although it hasn’t been renowned yogurt artisan. 1-877-230-5060 www.apt-inc.com long enough to fully evaluate, early The yogurt is available in 6- Fax 320.286.3055 e-mail [email protected] sales figures and anecdotal reports ounce, 16-ounce and 32-ounce sizes. Tel 320.286.5060 Cokato, MN point to success, Davis said. Currently available in grocery and Cabot GSY is a richer, smoother, For more information, circle #5 on the Reader Response Card on p. 22 creamier yogurt compared to tradi- • See Greek-Style Yogurt, p. 18 18 CHEESE REPORTER February 29, 2008

Greek Style Yogurt and cheeses that contain lean sources For the first six months of 2007, investment in our existing manufac- Continued from p. 12 of protein,” Ulukaya said. US sales have been increasing by turing facility,” Davis said. “At the same time that Mediter- 62.5 percent annually, and FAGE Initially, Cabot assumed that GSY The yogurt is available in 6-ounce, ranean food has gained appeal in the expects that pace to continue. would be used primarily, if not exclu- 16-ounce and 32-ounce sizes. Cur- US over the past five years, the “FAGE’s evolutionary next step is sively, as an ingredient. rently available in grocery and yogurt category in general has grown to expand by building a permanent “In fact, as an ingredient it can specialty food stores throughout the enormously due to heightened production facility in the US, in actually provide a useful means to US, flavors of fat-free Chobani awareness of its culinary and health order to further position itself as a ‘skinny up’ some recipes – using Greek-style yogurt include fruit-on- virtues, as well as its intrinsic luxury significant yogurt manufacturer in GSY in place of higher fat dairy the-bottom Strawberry, Blueberry appeal,” added FAGE’s Papageor- the $3.2 billion US yogurt market,” products such as sour cream or even and Peach, as well as Honey, Vanilla giou. he continued. butter,” Davis said. and Plain (available in 2 percent and Specifically, demand for Greek- GSY can also be used in place of 10 percent fat varieties). style yogurt is on the rise. In 2006, Greek-Style Yogurt Resonates With some harder-to-find dairy products “As consumers continue to seek Greek annual revenues for FAGE Consumers As Healthy Dessert such as Quark, for example, in some out healthier ways of eating, many were $481 million, including consol- Greek-style yogurt has been getting a recipes, he added. are adopting the Mediterranean diet, idated sales for the US and Europe. lot of attention, including a plug “But what we found was that and the rewards couldn’t be greater,” “Revenues in the US market are from Oprah Winfrey among others, Cabot GSY resonated most as an said Hamdi Ulukaya, AgroFarma consistently going up and FAGE is Cabot’s Jed Davis said. indulgent dessert,” Davis continued. president. carving out a distinct market for “We were attracted to this product “The richness of texture and flavor “People in the Mediterranean itself as a healthier snack/desert by the possibility for incremental make it such a delicious treat that region eat an abundance of food from alternative – much like Pinkberry sales from a product that didn’t ingredient use has become increas- plant sources, and consume yogurt did,” Papageorgiou said. require significant additional capital ingly designated the ‘number two’ way to enjoy GSY.”

“Now the time seems ripe for yogurts like GSY that harken back to traditional European Emeril Lagasse Photo: Kerri McCaffety Paula Deen methods and flavors. “Bam! “From Bag Lady The Man and the Magic” to Food Queen” US consumers may now be ready for more flavorful yogurts with differing textures. We see GSY as one of those Lou Holtz Tony Snow efforts, and feel that it “Game Plan for Success” “Election 2008: Fads, Chads, & Choices” has legs.” —Jed Davis, Cabot Creamery

Phil Lempert Harold Lloyd “Behind the Mask: “Lead, Follow, or The Future of Retailing” Get Out of the Way” Greek-style yogurt is another niche within the overall yogurt cat- egory that has staying power, Davis said. Its recent embrace by cus- tomers may also be an indication of the yogurt industry returning full- circle. Dr. Elizabeth Sloan Dr. Christopher Gray “The Health & “Shopper Psychology” “Recall that when yogurts were Wellness Consumer” first introduced stateside, they tended to be European-style and many Americans found that flavor and texture just too acidic and for- eign to really embrace,” Cabot’s Davis said. Malcolm Gladwell John Cleese “The Tipping Point” “The Importance of “Initially, yogurt was more of a Creativity” natural foods store item,” he said. IDDBA’s Dairy-Deli-Bake 2008 Once US yogurt makers began making “American-style” yogurt – Let The Good Food Roll. You can’t miss the biggest A Carnival Of Top Speakers. From inside and outside food show to hit N’awlins in years. You’ll be surrounded the industry, you’ll see some top performers address market- sweeter flavor, smoother texture – by Mudbugs, Po-Boys, King Cakes, and Hush Puppies, ing, consumer, and merchandising trends and issues that can the domestic yogurt industry took plus 8,000 buyers, merchandisers, brokers, distributors, and affect your business. And this Super Mardi Gras line-up off, Davis said. marketers all looking forward to unmasking the hidden profit wouldn’t be complete without a recipe that included some of potential in dairy, deli, bakery, and foodservice. the top chefs in the country. Add in a dash of convenience – cups, on-the-go tubes – and variety The Crescent City Crawl. Relax, you’re in the Big Easy. IDDBA’s Show & Sell Center 2008. Once again, an You’ll have many opportunities to network and all-new 10,000 square foot merchandising theater – you name a flavor and there’s prob- exchange ideas on the Expo Floor, in the Show & Sell brings together the talents of many creative retail ably a yogurt out there – and a solid Center Merchandising Pavilion, or at one of the many merchandising teams. Every year it’s a new show- health message, and the rest is his- other industry Special Events. And like the Vieux case for promotional themes, case sets, category Carre´, the expo floor with over 1,500 booths is always merchandising, signage, and special displays. And tory, he said. packed with new ideas, products, and services to help you can put these original ideas into action using your “Now the time seems ripe for you jazz up your business. very own idea resource book. yogurts like GSY that harken back • Register Now • Educational Seminars • Show Planner to traditional European methods and • Book Your Hotel Room • Exhibit Application • Show & Sell Center flavors,” Davis said. “US consumers IDDBA • P.O. Box 5528, • Madison, WI 53705 • call 608/310-5000 • fax 608/238-6330 • visit www.iddba.org may now be ready for more flavorful yogurts with differing textures. We see GSY as one of those efforts, and For more information, visit www.iddba.org feel that it has legs.” r