Saturday, November 01, 2014
 How Great Lakes Cheese Became a Major Player in U.S. Market  

One of Ohio's largest companies is privately held, not widely known, yet makes something consumed by nearly every resident of the state — or nation, for that matter. 

Great Lakes Cheese, in the small town of Hiram, sold $2.4 billion worth of cheddar, provolone, mozzarella and other cheeses last year. It accounts for about 25% of all packaged cheese sold in the United States and about 35% of all cheese sold in the eastern portion of the country, said John Epprecht, the company's vice president and a member of its founding family. 

“If you go from Illinois south and east, we're dominant,” said Epprecht, who helps run the company along with his brother Kurt, and other family members. The Epprecht family collectively owns about 80% of Great Lakes Cheese. The company's workers own the rest through an employee stock ownership program. 

The company is in the midst of opening a $100 million, 330,000-square-foot plant in Manchester, Tenn., that will open later this year and employ about 100 people. 

It will be the company's fifth “super plant” — the name Great Lakes gives to its largest operations that also serve as major distribution hubs — and its ninth plant overall. The company employs about 2,400 people nationally, including about 600 at the Hiram plant and corporate headquarters, its largest single facility. 

The company only makes about 15% of the cheese that it ultimately sells or processes. The rest it buys from dairies and cheesemakers around the country. 

“You bought a billion pounds of cheese last year,” John Epprecht said to Kurt during a recent interview. 

The company's real strength is in slicing, cubing, shredding and otherwise putting cheese into a form that the customer wants — whether they are making millions of pizzas or topping just one cracker — and then finding a way to get that cheese into durable packaging that both keeps it fresh and makes it easy to use. 

“We're a packaging company first,” Kurt said. 

Many customers probably never even realize they're eating a Great Lakes product. The company processes and packages many store brands, including the store brands of Giant Eagle, Target and other supermarkets that carry their own private labels. It does the same for other big cheese companies, like Sargento or Cabot, and it provides the cheese that goes onto McDonalds and Wendy's hamburgers, dishes at Chili's and Applebee's and for other restaurant chains. 

“If you went into the grocery story and looked at the deli, cheese aisle and dairy case — we probably have had a hand in one third of the cheeses you see,” said John Epprecht. Forbes lists the company at No. 213 in its list of the largest private companies in the United States.

The company has had an amazing run of growth over the years. 

It began when the Epprechts' father, Hans, opened a one-man cheese stand in Cleveland in 1958. He moved the business to Newbury in 1962 with three employees, and quickly realized that his niche should be not just in making cheese, but in packaging it. By 1978, his strategy had grown the company to 100 employees, and Great Lakes was off and running. 

Though Great Lakes has bought up some other operations along the way, most of its growth has been organic, as it has both taken market share from others and benefitted from a trend toward more cheese consumption in the United States. According to the Center for Science in the Public Interest, which issued a study on cheese consumption last year, the average American eats about 23 pounds of cheese per year — up from about just eight pounds in 1970. 

Even recent trends toward diets (and people) with less fat have not hurt sales, though Kurt Epprecht readily jokes of cheese, “It ain't broccoli.” 

Oh, and by the way, his favorite restaurant? That would be Northeast Ohio's Melt Bar & Grilled, where gooey, drippy cheese on anything is the house specialty. 

“We love that restaurant. Whenever anyone is visiting, we try to take them to Melt,” Kurt said.

They are the champions

The size of the company has increased since the family hired an outside person, Gary Vanic, to run it as CEO in 1998. Sales have gone up from about $1 billion to nearly $2.5 billion since he took over, the Epprechts said. 

The business is fairly recession-proof, and it weathered the severe downturn of recent years without a major lapse in sales or an impact on operations. 

“We've never had a layoff,” said Stacey Barbe, the company's manager of human resources. 

But none of this seems to be what the Epprechts like to talk about the most. Their favorite topic remains the cheese itself — and Great Lakes does far more than simply make and process run-of-the-mill curds. 

“That was the world champion,” John Epprecht says, motioning toward a display of the company's Adams' Reserve Cheddar. 

The cheese won the 2014 World Championship of Cheese in the vaunted “Cheddar” category.


Source: Crain's Cleveland Business


Posted on Friday, May 30, 2014 (Archive on Friday, June 06, 2014)
Posted by bholcomb@adpi.org  Contributed by bholcomb@adpi.org
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