Final Report for ONE13-192
The intent of this project was to gather baseline information about producer capacity, current markets, and potential markets for farmstead and artisan cheese makers in the Finger Lakes region of New York State. Producers, distributors and buyers were surveyed and interviewed in person. Site visits were made to potential new outlets in Syracuse, Rochester, and NYC (Manhattan & Brooklyn).
Farmstead and artisan cheese production in the Finger Lakes region has expanded significantly since mid-2000’s. There are currently 27 small scale cheese producers (provided by NYS Agriculture & Markets) in the 14 county Finger Lakes region. Sheep, goat, and dairy producers make a variety of soft and aged hard cheeses. Production volume ranges from very small volume producers with 500-1000 lbs per year to larger volume specialty producers that are nearing 25,000 lbs per year. Direct marketing and agritourism are primary marketing strategies used by producers who sell from their farms, at farmers markets, at festivals and events, and tap into many specialty food outlets in the region. Nearly half of the regions producers utilize on farm sales, farmers markets and festivals for direct marketing and as the next strategy when volume allows, they move into small specialty and retail stores sometimes relying on local distributors to expand their market penetration within the region. Only 2 of the 27 producers can be found in NYC cheese counters. While there is an abundance of outlets in the region, a key challenge for producers is to find the right mix of outlets for efficient sales and resulting returns.
Current marketing efforts are producer initiated resulting in overlapping approaches and delivery routes. Some efficiency could be gained identifying common markets where delivery functions could be shared. To open new markets in metro areas, a more deliberate approach to sales is needed along with identifying the products in demand by specialty cheese buyers, coordination of ordering and delivery. The introduction of cheese into new outlets would be the function of a Finger Lakes Cheese Alliance representative. Stronger branding and marketing materials is needed to support a collaborative marketing effort.
Scaling up is an additional challenge, some producers choose to stay small, others are limited by capacity within their plants or others they utilize. Cornell’s Dairy Pilot Plant provides opportunities for new cheesemakers to start producing, and there is a recently expanded cheese plant that is making cheese for 5 other producers in the area. Shared production facilities is a strategy for expansion that will reduce the overhead cost of owning equipment plus equipment is in use more times a week, but sanitary requirements are hugely critical.
Demand for specialty farmstead or artisan cheese within the Finger Lakes and in metro areas of NYS is not yet fulfilled. However, individually producers lack the time and volume to go beyond local marketing. Coordination among cheesemakers to gain recognition in the marketplace is being somewhat addressed by the Finger Lakes Cheese Alliance. The question of how much more volume is needed to meet demand was not specifically researched but there is evidence that producers have been successful at selling more cheese to more customers. Production capacity could be increased through coordination among producers however this will be more challenging given the need for meticulous food safety standards.
The study concludes that coordination among Finger Lakes Cheese Alliance members is a viable marketing strategy. By identifying signature products, enhanced by strong branding, and building buyer relationships, expansion into new markets as an Alliance is one strategy for market expansion. Further efficiency could be gained by identifying markets already served by the Alliance and coordinating distribution.
The Finger Lakes Cheese Trail, first organized in 2008, has been utilizing a variety of collaborative strategies to gain customer attention and recognition. Their first efforts involved hosting an Open Day at their farmstead cheesemaking facilities. The success of this event in bringing customers to farms and garnering media attention launched the trail. Some of the cheesemakers reported a 4 fold increase in sales over what was normal at farmers markets. However, since 2012 open day attendance started to fall off. Other marketing strategies tried by the group included coordinating a joint sales booth at several farmers markets in the region, a meeting with a NYC wholesale cheese buyer for which they produced a catalog, many pairing events with area wineries, and in 2012, they launched the Finger Lakes Cheese Festival.
Current collaborative efforts of the Finger Lakes Cheese Alliance (renamed in 2015) are one Open House on Columbus Day weekend, the end of July Cheese Festival, and general marketing of cheesemakers via their brochure, website, and social media. The Cheese Festival has grown now has become their most successful event with nearly 4000 people in 2015 and significant vendor sales.
Beyond these collective promotion efforts of Cheese Alliance members, each has their own marketing strategy which includes primarily direct sales to customers via farmers markets, at their farm shops, direct delivery to restaurants, wineries or small specialty food stores, and some limited amount of wholesaling to larger retailers. There are several distributors in the area that deliver cheese to outlets within the Finger Lakes and in NYC. There is no current effort to coordinate sales within the region or beyond the Finger Lakes to other parts of the state.
In this study, we identified current marketing strategies used by area cheesemakers and assessed the potential for expansion of cheese sales to new outlets in the region and beyond to NYC. Our approach was primarily based on interviews and site visits. A key challenge for a collective marketing approach is the scale of the cheese making operation and volume available for increased sales (capacity to supply). Another challenge is that there is a large variety of cheese being made in the region, hence, making it difficult to promote all cheeses. It would be important to identify signature cheeses that could be consistently supplied and that would therefore, gain buyer loyalty. A final challenge is that the specialty cheese buyers themselves are inconsistent at purchasing artisan cheeses and need to be prodded with regular calls. At this time the Alliance has no staff and operates with a volunteer steering committee of producers that are overly busy marketing their own products. The Alliance has not made a commitment to a collective distribution strategy; however, greater demand, increased efficiency and cost reduction could result if such an effort were undertaken, but grant funding would be required to launch such an effort.
The intent of this project was to gather baseline information about producer capacity, current markets, and potential markets for farmstead and artisan cheese makers in the Finger Lakes.
This project focused on market research:
1) to describe current markets utilized by FL cheese producers, associated costs and returns
2) to identify the potential to expand marketing in the region and beyond into metro areas of the state
3) to determine the logistics and costs associated with moving cheese into new markets
4) to understand wholesale pricing for cheese (competitive consumer prices, standard industry margins and mark ups)
5) to determine the capacity of FL cheese producers to meet price and volume for expansion into regional and urban markets of NY State
The end goal of this work is to develop a roadmap for market expansion through the collaborative efforts of the Finger Lakes Cheese Alliance.
This project involved primary research using surveys and interviews as the key means of soliciting data from producers, buyers and distributors.
Activity 1) Characterize current markets, distribution tactics, and production capacity of artisan and farmstead cheesemakers in the Finger Lakes. Specific information gathered: a) Current markets and sales per channel (e.g. farmers market, restaurants, specialty food stores, retail stores, distributors) to assess demand by channel and help producers understand channel performance; b) Distribution strategies used by farmers
Initially, we have worked with 14 cheese producers who were originally identified as cooperators on this project. To obtain producer product, price and marketing information, we reviewed published information (web & brochures) followed by a mailed survey and personal interviews (8 out of 14 were interviewed). Summary profiles were prepared for each producers (these are not included with this report to ensure confidentiality as requested by the producers).
See attached: table form survey - Survey provided to producers and followed up as needed through in person phone interviews to fill data gaps with a focus on gathering the following: Further Questions for Producers - Phone survey follow up questions.
As a second step we contact NYS Dept. of Agriculture & Markets, Division of Milk Control, to identify all cheese plants withing the 14 Finger Lakes Counties. Additionally we reached out to 13 additional cheese producers who were not among the 14 collaborators to gather basic information found in the attached surveys. There is a total of 27 producers in the Finger Lakes considered to be farmstead or artisan producers. Information related to these cheese producers can be found in the attached media, within the results section of this report - Finger Lakes Cheese Producers.
Activity 2) Met with distributors to ascertain if there is additional unmet demand in the region and in NYC.
We are fortunate that there are 3 primary dairy, cheese and specialty food distributors located within the Finger Lakes that our cheesemakers use for moving products. These include: Artisan Foods from Rochester, Regional Access in Trumansburg, and Finger Lakes Family Farms in Interlaken. Information pertaining to distributors was gathered from the cheese producers, from websites and via direct interviews. Specific information gathered: cheese producers they represent, challenges associated with local cheese supply and distribution, area of distribution, costs associated with distribution.
Also discussed with distributors: what types of buyers want cheese, their expectations, and challenges experienced in moving NYS cheeses. Key among them are the opportunity to sample, obtaining volume on a regular basis and finding a price point that works for the various outlets (mostly small retailers).
Activity 3) Identified retail specialty cheese buyers within the Finger Lakes and in NYC.
The two means for identifying specialty cheese shops not currently utilized by area producers included:
-NYS Ag & Markets food retailer lists - the state inspects retail food stores, in the database, we identified those located in Syracuse and Rochester that would be considered specialty stores; we then decided which stores to visit based on review of websites and insight from distributors
-For NYC (Manhattan & Brooklyn) we relied on Challey Comer, who was at the time a NYS Ag & Markets staff member, who had worked with many of the specialty shops in NYC who were seeking local products. She provided us with an extensive list of cheese and specialty food shops and helped us with appointments. In addition, both Regional Access and Finger Lakes Family Farms distribute in the city and they provided locations where they distribute.
Activity 4) Contacted selected retail stores and cheese shops in Rochester, Syracuse and NYC to schedule a visit. Met with buyers and assess their current level of NY or Northeast cheese buying, and gain insight into purchasing, price, display and promotion of local/regional specialty cheese. In some cases we had appointments with cheese buyers, or we simply asked to speak to them when we arrived. In some cases, where we were not able to speak with anyone, we still got a pretty good idea of what the stores purchased from display cases.
Activity 5) Reviewed all survey data, interview notes, profile summaries, input and insights to identify opportunities and consider next steps that could be taken as compiled in the results section of this report.
Given that dairy farming continues to dominate NY agriculture, cheese production has a long history in the state. The Finger Lakes is home to several larger companies, like Kraft, HP Hood, and Heluva, with a history in the region and that are known for cottage cheese, mozzarella, and cheddar type cheeses.
On the other end of the spectrum there has been a resurgence of farmstead cheesemaking. This resurgence began with goat milk cheeses introduced in the early 1980’s at area farmers markets. The first goat milk producer in the region, Lively Run Goat Dairy, established in 1982, is now the largest producer in the Finger Lakes with widespread product recognition. At about the same time (1980), the original owners of Northland Sheep Dairy started making tomme type aged sheep cheese. Both farms are considered pioneers in the Artisan Cheese movement in NYS. Ten years later (1994), Side Hill Acres Goat Dairy was started and has had similar success in marketing within the region.
It was not until mid-2000’s that area dairy farms started utilizing some of their milk supply to produce farmstead cheese. There are now at least 15 creameries associated with established dairy farms, 5 just started operating in the last 5 years. This suggests there is continued interest in and optimism about adding value to milk to gain a higher return per pound price (typically at $20/cwt, the same volume of milk turned into cheese is valued at $100/cwt).
There has been some transition during this evolutionary period; 4 dairies are no longer making cheese for a variety of reasons including failing to pass inspection, milk handler requirements, and moving from the area. This has meant that the membership of the Finger Lakes Cheese Trail, now the Finger Lakes Cheese Alliance, has also fluctuated and not all artisan or specialty cheese producers in the region are Cheese Alliance members.
The impetus for forming a Trail was primarily marketing to raise awareness of area producers and tap into wine trail tourists. The Buy Local movement and interest in artisan foods provided broader momentum. As a starting point, 8 area cheese producers hosted the first Finger Lakes Cheese Open House in October 2008. The Open House went from once a year to 3 times a year, garnering significant media attention, attracting anywhere from 50 to 300 visitors and resulting in strong cheese sales ($200-1,000). The Open House was more successful for cheesemakers in closer proximity to each other but less so for those on the fringes of the region. October generated the largest draw, while the May and July Open House were weaker. After several years, it appeared that the Open House was losing momentum so now there is only one Open House held in October.
In 2012, the Trail put its energy into hosting the first ever Finger Lakes Cheese Festival which has now been held for 5 years and has become a huge draw, 4000 people in 2015 from throughout New York and northern PA. The festival has provided a solid selling venue as the customers come to one location to find Finger Lakes cheese, instead of driving to 10 widely dispersed locations.
In 2014/15, members of the Cheese Trail decided it was time to re-brand their organization to focus less on the trail and more on activities that benefits all members. The Trail name was problematic given that many farm cheeseries are not open to the public yet the public has the expectation that they can visit any time. Additionally, the cheesemakers are widely spread throughout in the Finger Lakes, therefore, it is not feasible to visit all trail members at one time. Several cheeseries with regular hours have become tourist destinations hosting bus groups or sponsor their own festivals.
Today, the Alliance has a strong website, a widely distributed brochure, members are asked to participate in the region’s various beverage trail events (wine, beer, cider), as well as, in other community events and festivals. These efforts all yield marketing connections for area cheese producers who as a result, rely heavily on direct sales rather than wholesale distribution.
Cheesemakers in the region use a variety of approaches to making their products. Some are fully integrated using milk from animals they raise to make all of their cheese, while others may deliver their milk to a cheesemaker to have it made using their own signature recipe, and others may buy milk from other dairies to produce their cheese. This creates some confusion in knowing what to call the cheese; farmstead, artisanal and specialty cheese are used interchangeably, and it seems not to make a huge difference with buyers, as long as the cheese is a local, unique, small-scale hand crafted high quality product.
Cheese is made in a variety of on-farm facilities. Recently, some producers starting out have been able to take advantage of the new Cornell Food Science Department Processing and Development Laboratory (Pilot Plant) where new producers can secure assistance from Cornell technical specialists in making their cheese. Additional capacity at Lively Run Goat Dairy has also made it possible for several producers to have cheese made there.
Producers generally start out making a few types of cheese and then expand their product lines. Some may make only one or two types of cheese choosing to specialize, and others may offer as many as 15 varieties, however, this often represents fewer types with variety being gained by adding herbs, pepper flakes, smoking, or other flavoring. There is the full range of aged cheeses made by Finger Lakes cheesemakers, including: cheddar, Colby, Gouda, blue, provolone, Swiss types, as well as cheese curds and semi-soft cheeses, including Chevre and Feta. Most hard cheese is raw milk, aged 60 days. Most of the soft cheeses are pasteurized. The quality of the cheese coming from area producers would generally be considered high, several producers have won awards, and some producers have been sought out by larger well known specialty cheese shops in NYC.
Producers can be separated into two broad categories: goat and sheep producers primarily in the business of making cheese, and dairy farmers that are producing cheese with some of the milk from their farm operation. At least 3 organic dairy farmers have been involved with making cheese from their milk supply. There are also several dairy creameries in the region that sell milk, yogurt and butter.
The amount of milk utilized for cheese from these farms has not been well documented. Total cheese production in the region is also not accurately quantified, but it is estimated that 27 artisanal cheese producers in the region produce somewhere between 180,000 to 220,000 pounds of cheese a year. Sales generated by these farms at an average wholesale price of $10 lb equal at least 2 million (average retail price $12/lb equals 2.4 million in sales).
It is interesting to note that in a 2006 study, 27 Vermont cheesemakers produced 650,000 lbs of cheese at an average price of $15/lb, generating $9-10 million in sales. This suggests that Finger Lakes producers have more potential to grow the region’s cheese industry.
Marketing Strategies Used
A variety of marketing strategies are being used by small scale cheesemakers in the Finger Lakes. There is a high degree of effort devoted to marketing, so the question remains, which channels are producing the best returns for the effort made. Most producers are engaged in their own marketing and delivery to local outlets. Direct to consumer marketing is the primary marketing approach. Some producers sell at their farms using self-serve coolers as a minimal approach while others operate stores and tasting rooms with regular hours, offering tours and finding success as agritourism destinations. Many sell at farmers markets. A few offer CSA shares or some sort of loyal shopper scheme and a few utilize on-line sales.
Most cheesemakers are also involved in selling direct to retail outlets in the region including farm markets (operated by other farmers) or small specialty stores, wineries and restaurants. Generally producers do their own delivery to outlets within 20-30 miles of their production facility. Some producers have as many as 50 accounts and rely on a combination of doing their own delivery and utilizing distributors. Direct marketing is the most common marketing strategy.
To gain a wider market and increased efficiency, some producers utilize local distributors to expand into markets beyond their easy reach. We are fortunate to have several specialty foods distributors in the area that are moving products into larger metro areas -- Syracuse, Rochester, Buffalo, Albany and NYC - (Regional Access, Finger Lakes Family Farms, Artisan Foods, Lucky Dog Food Hub).
The Cheese Festival is reported to generate the highest sales per day for most producers. Other events like the Cheese Trail Open House and events sponsored by local craft beverage producers (wine/beer/cider) as well as community festivals help generate additional exposure and sales.
Given the variety of markets, small order size in some cases, and the time and effort it takes to serve a large number of buyers, it seems that there is inefficiency and redundancy in the current approach to marketing utilized by small scale cheesemakers in the Finger Lakes. Yet this approach seems to work because of the variety of outlets available in close proximity and strong demand for local food and interest in agriculinary tourism.
Prices range from $8 to $32 per pound retail, with the average being around $12/lb. The more unique the cheese, the higher the price. Wholesale price discounts vary depending on the product. Typically, a product that sells for $11/lb wholesale will generally be marked up to $22 or more in a specialty cheese shop.
Potential to Expand
A key question is to know whether there is enough demand to expand sales to more outlets in the region or beyond. Capacity to expand is limited among some producers and some are not interested in expansion. Capacity to supply more markets is coming from an increase in the numbers of producers making cheese, rather than from expansion at current facilities. That being said, there are several producers that have made significant strategic investments in expansion in response to demand.
The costs associated with cheesemaking and margins have not been fully analyzed. In the study of Vermont cheesemakers conducted 10 years ago, production costs were between $3/lb to $12/lb with an average of $6.72/lb but producers did not always account for all of their costs accurately, in particular their own labor. Cost of production is assumed to go down once producers increase capacity and gain efficiency through properly scaled production and distribution processes.
Finger Lakes Cheese Trail – focus on mission and purpose.
During the extended time period of the grant, it became clear the Finger Lakes Cheese Trail needed to refocus on the mission and purpose of the organization. Most felt the trail idea, while it had value when Open House weekends were the main focus, was not an effective marketing strategy overall. Operating a trail was challenging because not all cheesemakers are open to the public or have regular hours, additionally the producers are spread throughout the large region making it challenge to visit all. While there are a few producers that are open to the public at their farms, many have other marketing strategies.
The cheese producer group spent considerable time deciding to re-brand the organization as the Finger Lakes Cheese Alliance. They continue to focus on collective promotion via the website, a colorful brochure, and the annual Finger Lakes Cheese Festival and Fall Open House. And they are called upon to join other community and winery/beer/cider festivals. As an Alliance they also focus on industry matters, in particular food safety, requiring common understanding and collective action. [See the attached Finger Lakes Cheese Alliance draft structure adopted in 2015.] There has been some membership attrition and fluctuation. Not all cheesemakers in the Finger Lakes are members of the Alliance. Reasons vary, but mostly relate to their scale of operation and cost of membership. There have also been 4 cheesemakers since the trail started that are no longer operating for a variety of reasons.
Festivals/Events as a key marketing strategy
The Finger Lakes known for winery tourism draws 4 million visitors a year. This provides a huge marketing opportunity beyond local consumers. The Finger Lakes Cheese Festival, started in 2012 by the Trail members has grown each year in popularity (4000 visitors estimated). For cheesemakers, the festival contributes variously to their bottom line. Direct sales at the event amount from $200 to $2,700 per vendor. Total cheese sales at the event are approximately $12,000. Most vendors report that this is their best festival for total sales and that is equal to or better than sales at farmers markets or other events they attend or host. Cheesemakers report that they also make contacts with wineries or other vendors at the festival who later order their cheese, and when customers seek them out and order more cheese directly. And as with all events, it will be a challenge keeping the Festival “fresh” and growing the event. Weather can be a challenge. And a large number of volunteers are also involved in planning and executing the event. A major benefit of the festival is that it provides an important source of revenue for Alliance operations given that membership is low and membership fees are reported to be burden for some producers.
In addition to the Cheese Festival, Alliance members participate in many area festivals hosted by communities or the many wineries, cideries and breweries. These provide great exposure and sales opportunities. However, there is a cost associated with providing cheese samples for tasting. This could be as much as 10% of the total value of sales without factoring in time spent at the event.
Direct marketing at farms
Of the current 10 Alliance members, 5 have year-round on-farm stores as an important marketing strategy and report that fall is the strongest season for sales. Two others have seasonal on-farm sales. Others are only open for the fall Open House.
Farmers Markets are important outlets
Farmers markets in the region are important outlets for cheesmakers. Alliance members participate in 8 area markets that vary in size and in returns. Farmers Markets are the primary marketing strategy for smaller producers; larger cheesemakers prefer to move more volume through other outlets.
There are several distributors in the area that feature NY cheese but Finger Lakes cheesemakers are not prominent. Regional Access only features two area goat cheese makers. Most of their products are delivered to specialty food stores throughout the state. Finger Lakes Family Farms sells a few regional cheeses along with their milk and yogurt to outlets within and outside the region. Artisan Foods is the area’s premier cheese distributor and the company has been active in getting regionally produced cheeses into many specialty and retail stores throughout the Finger Lakes. A key challenge cited by the owner is consistent supply and volume. Many producers are not able to supply on a regular basis to make it worthwhile for retail outlets to showcase the product. In recent years, the variety of cheeses distributed by Artisan Foods has narrowed to larger producers with a steady supply of product.
Retail Stores/Winery shops/Farm Markets in the Finger Lakes
Within the region there is an abundance of small specialty stores including farm markets, specialty or natural food stores and cooperatives, and winery/brewery/cidery retail shops. These are good outlets for area cheesemakers. A key challenge in selling to shops is that some may not have proper ways to display cheese, hence, maintaining shelf life is a challenge. Cheesemakers and distributors need to restock their product regularly, as well as, check in regarding orders.
Retail stores with an emphasis on local products are potentially good outlets for area cheesemakers, however because they rely on a steady supply, they tend to feature fewer producers. There is also more downward pressure on wholesale prices with larger retailers. This makes selling to conventional retailers less attractive for smaller scale producers.
Restaurants are a specialty market for local cheese but it involves finding chefs that showcase a cheese or charcuterie board on their menu. Many buy feta and chevre from area goat producers since these cheeses are popular for cooking and salads. A key challenge when working with restaurants is that they generally order in small quantity (which is good for smaller producers) and they require weekly phone calls to secure orders, and require direct delivery. A strategy that has proven successful for one area cheese producer is to have a number of restaurants and small stores in close proximity to each other, and offer a weekly sales call and once a week delivery. Prices paid by restaurants for local products are generally somewhere between the retail and wholesale price. This is important given small orders and delivery. One opportunity that is not widely tapped is the many Bed & Breakfast facilities in the region, where local cheese would be a nice breakfast addition.
MARKETS THAT ARE NOT YET TAPPED
A focus of this study was to evaluate whether there are outlets within and outside the region where farmstead cheese is not yet being featured. While there is good penetration of the above describe outlets, there is more potential for marketing cheese locally within the Finger Lakes region and beyond. A strategic approach is needed to identify outlets, make sales calls, and follow up to garner sales.
In this study we identified specialty food stores in three target areas: Syracuse and Rochester within the Finger Lakes and New York City (Manhattan & Brooklyn). In some cases, we were able to arrange a meeting with a cheese buyer; and site visits revealed the degree to which the broader category of “regional/local farmstead” cheese – from NY or New England was featured. For Syracuse and Rochester, specialty food stores were identified by searching the NYS Department of Agriculture & Markets Retail Food store inspection database; and for NYC specialty cheese shops, we were provided with an excellent list from an Ag & Markets staff member based in Brooklyn, plus we found lots of outlets through internet searches.
The Syracuse Regional Farmers Market attracts thousands of customers each Saturday. Several of the region’s cheese and yogurt makers can be found selling there. Within the market complex, there is a retail specialty food store that has a large cheese counter featuring several NY cheesemakers. The buyer indicated a strong interest in featuring more local cheese. A second nearby Greek/Italian specialty food store was interested but did not currently carry anything other than mozzarella, Parmesan, and feta in their cases. Another Italian specialty store clearly indicated their preference for Italian cheese supplies. One larger independent grocer with a large cheese department and featured many central NY cheeses, however, none were Cheese Alliance members. Similarly, a large cooperative in Syracuse buys Finger Lakes goat cheese, but they are not carrying many hard cheeses from the region. Most of their cheese is ordered through Regional Access. Syracuse area restaurants could also be targeted for marketing cheese in that City. The Taste of Syracuse where many restaurants participate and the New York State Fair are events where Finger Lakes Cheese could be featured. However, the Fair requires daily staffing during its 2 week running period which makes it highly unfeasible.
During this visit, we met with the head Cheese buyer for the Wegman’s chain. Wegman’s has a strong local buying program and recently invested in building a cheese cave. Their strategy for purchasing local cheese is shifting to working with selected producers who can supply more common cheeses in large demand. For now, they have 5 main producers (3 from NY) who are “producing” for them and whose products will be sold as a Wegman’s partner brand. This new emphasis seems to make it more challenging to sell cheese direct to Wegman’s local stores. However, the buyer indicated a preference would be given to specialty cheeses that have a strong local consumer following.
Other Rochester outlets visited include a small retail cheese shop featuring only cheese, however, the volume through the store was not sufficient to keep it open. The owner continues to offer a catering business where cheese is the centerpiece. Another visit was with a new retail food store focused on local and natural in downtown Rochester. This store has a sizeable cut and wrap cheese counter and a cheese monger interested in buying from area cheesemakers. A well-known dairy processor in Pittsford with a limited cheese display would be another good outlet for Finger Lakes cheesemakers as they do feature many cheeses from the region in their store.
As with Syracuse, Rochester has a large public market and many popular neighborhood markets where selling cheese is highly viable. The Taste of Rochester held each year is also a venue for great exposure.
NYC (Brooklyn/Manhattan outlets)
We identified at least 15 specialty cheese shops in Brooklyn and Manhattan where cheese is front and center. Additionally there are many more specialty food stores as well as larger retailers including Whole Foods and Fairway Market that feature many Northeast and NY cheesemakers in large cheese cases. Two restaurants we visited make it possible for customers to select cheeses from a cheese case to create their own cheese plate and then they can buy the cheese that is to their liking.
Specialty cheese shop buyers (cheese mongers) were extremely receptive to buying high quality unique cheeses in most any quantity though consistent availability would be important in order to build a customer following. One of our Finger Lakes cheeses, Irish washed-rind semi-soft cheese from Keeley’s Cheese Company, was being sold at Bedford Cheese Company. Lively Run Goat Dairy also had cheeses in several specialty food stores. While there is not yet strong presence of Finger Lakes Cheeses, other NY cheesemakers are showing up and gaining considerable shelf space in specialty food stores, less so in specialty cheese shops. One challenge noted is that buyers at busy little neighborhood food shops are well intentioned, but they do not always place repeat orders, so cheesemakers must be persistent and call to encourage reordering. Some Finger Lakes cheesemakers were dropped because this follow-up was lacking.
A key challenge with all of these outlets is space! NYC specialty food stores and cheese shops have a very small footprint so the amount of product crammed into a store is often astounding. A cheese counter may only be one foot wide and three shelves deep. A buyer has to place a premium on products that are known to sell. There is very little space for point of purchasing marketing…to tell the story of the cheese and cheesemaker. The most that is done is to list the cheese type, producer name and where produced on a business card size label. Because many small scale producers get noticed because of their story, it is important the story be told through effective in person communication and marketing materials left with the buyer. The interest is there but the competition is high for shelf space and therefore differentiation, quality, uniqueness and reliability are essential.
Prices paid by NYC cheese mongers and specialty store operators seem to hover between $8 to $12 wholesale and they will generally double the price to the customer. Some Finger Lakes cheese producers have retail prices in that range, so meeting the wholesale price of NYC buyers would not be a hardship. Getting the product to NYC outlets is not too much of hardship either given that Regional Access and Finger Lakes Family Farms are in NYC weekly and already deliver to many small shops where cheese is sold.
RECOMMENDED STRATEGIES FOR EXPANDED MARKETING
Based on the findings of this study, following are some strategies that could be pursued individually or collectively by the Finger Lakes Cheese Alliance.
- Local Marketing: Producers in the process of developing their product and ramping up production generally should pursue a local test market approach. This includes sales at farmers markets, festivals and other such venues where there is a high level of customer interaction and feedback.
- On-farm sales: This should be evaluated based on location. A farm on a highly traveled route near other destinations such as wineries, is more likely to gain more on-farm sales than those off the beaten path. On-farm sales are conducted in a variety for ways from an unstaffed cooler to a full farm store. Coolers are a bit risky as product and money can disappear. Stores with hours require staffing and a higher level of overhead unless there is someone at home, not involved in other chores who can keep an eye on a store. A farm store with tours of the cheese plant can become a significant tourism attraction that generates sufficient customers to cover overhead costs.
- Finger Lakes Cheese Festival: it is important to track traffic, customer feedback, and make improvements to continuously keep the event “fresh”. Improvements have been made every year to make the event run better. More cheesemakers are needed to add to the variety and serve more customers. Weather can take a toll on attendance. It may also be important to move the event around the region to attract new visitors.
- Regional Finger Lakes Outlets: There is an abundance of outlets in the Finger Lakes from farm markets, small specialty stores, farm wineries, craft cideries, breweries, and restaurants. Tapping into these outlets could be more strategic. A cheesemaker marketing off the farm, could begin by targeting outlets within a 20-30 mile radius of their farm/production facility. Each outlet should be visited and assessed as to its potential. A sales call with product samples and marketing materials and a follow up call are necessary to start a relationship. Generally, orders would be called in and delivered once a week or as needed. Most often the cheesemaker will need to call the establishment to check whether or not cheese is selling and to deliver more. Unfortunately, small buyers may not take the initiative to call in orders without prodding from the cheesemaker. Additionally these outlets may require training on cheese handling. Shelf life could be a factor if the cheese is not properly displayed.
- Syracuse Expansion Opportunities: In Syracuse, marketing may be somewhat more challenging mostly because the specialty food stores are strongly ethnically based and have their favorite imported cheeses. A strategy for a producer might be to look into selling at the Regional Market, the Downtown Syracuse Market, to the Real Food Cooperative or to restaurants that have a local focus. Empire Brewing might be a good venue to pursue given the opportunity for beer and cheese pairing.
- Rochester Expansion Opportunities: The two best outlets we identified in Rochester are the Hart’s Grocery downtown and Pittsford Dairy. Both put a strong emphasis on local product sales and buyers indicated interest in featuring more cheese from the region. A meeting with buyers to present cheeses and prices would be a good next step. This could be coordinated among several of the cheesemakers looking to expand.
- NYC Expansion Opportunities: A group sales trip to visit several shops in the City would be a logical next step. Many shop buyers are very busy and it is hard to get their attention though they are interested, however, persistence and a highly reliable high quality product would be required. Another approach that may open doors is to attend the Northeast Cheese Festival held in Flushing, Queens in December. Several cheese buyers during the NYC visit mentioned this event and reported that there was a good mix of chefs, buyers and cheesemakers that attended in 2015. The date for 2016 has not been announced (sponsored by NY Epicurean Events, Inc.). The Finger Lakes Cheese Alliance might want to sponsor a joint tasting table at the event but more information is needed.
- Branding : Getting noticed in the ever expanding and exploding world of artisan cheeses is a challenge. The Finger Lakes has garnered significant recognition as a region for wine, cider, beer and artisan farm and food products. The Cheese Alliance benefits from being an organization of cheesemakers locate in the Finger Lakes. Value can be added through improved branding and marketing materials. An updated logo might be a good starting point. The website and brochure are well done but it would be good to unify all marketing to have a consistent look. Further marketing collateral that could be offered include small price signs that carry the Alliance logo for retailers for display. And given limited space in retail shops, a small (3x5 or 4x6) story card about the producer could help distinguish Finger Lakes cheese in the case from other producers. Or the story could be told in very short videos that run on a tablet in a store.
- Collaborative Marketing of Signature Products: Given the variety of cheese available from area producers, it would be important to identify a signature cheese selection from the Finger Lakes that could be produced in a consistent quantity and offered through regional distributors or that could be sold by the Alliance through a collaborative marketing scheme. Signature products could be shipped jointly to regional and NYC markets. A person would have to ensure ordering is coordinated and deliveries are shipped as well as follow up with buyers on cheese sales. A catalog could provide information about the signature products, the producers, and pricing and supportive collateral and point of purchase marketing materials provided. Unlike the collective initiative attempted by the Trail before where one large cheese wholesaler was contacted, this approach would be direct to many cheese and specialty shops. The Alliance is not able to supply a large wholesaler but could collaboratively meet the demands of a group of smaller retailers. Pricing would be more favorable as there is less downward pressure with once a middle marketer level is removed. Wholesale prices in NYC are actually fairly comparable to retail prices for Finger Lakes cheese producers, so only freight would need to be factored in.
- Can local marketing be better coordinated? Given that producers are mostly criss-crossing the roads of the Finger Lakes on their own, it seems there would be some marketing efficiency gained by comparing routes and outlets, and sharing the distribution functions. Again this may require staff to identify common outlets and coordinate the distribution. Some of this is already done by both Artisan Foods and Lively Run Goat Dairy. In addition to coordinating delivery, another strategy is to visit outlets within the current delivery areas that do not yet carry Finger Lakes cheese to develop new customers. This could be the function of an Alliance representative who seeks out the buyers, presents the products, secures and coordinates the sales.
- Funding is needed: In order to grow the regional market and to collaborate on NYC sales, a grant would be needed to support improved branding and marketing materials development, and to support an Alliance representative who would be strategically making sales calls and to open new marketing opportunities as well as better coordinate existing distribution to current outlets. NYS Farm Viability Institute may be a potential source of funding to explore.
Education & Outreach Activities and Participation Summary
The primary audience for this study is the producer members of the Finger Lakes Cheese Alliance and other small specialty cheese producers in the region. Given that this study is the first attempt at characterizing the nature of specialty cheese production in the Finger Lakes, it contributes to a body of literature that has been published about specialty cheese production elsewhere in the country. The focus of the study has been primarily on identification of marketing strategies used by producers and to assess demand both in and beyond the region for specialty cheese. The study provides baseline information but it does not provide a thorough economic analysis of specialty cheese production in the Finger Lakes.
It was not within the scope of this project to conduct a thorough economic analysis of the specialty cheese industry in the Finger Lakes. Some data was gathered from the NYS Department of Agriculture & Markets Division of Milk Control, and from producers who chose to provide information about the scale of their businesses. This data was used to generate estimates of the scope of the industry. A much more rigorous approach to gathering producer level data would be needed to accurately quantify production levels, costs and returns, and breakeven prices. Given the variety producers and production approaches, with each marketing independently, it is highly likely that there is a wide variation in production costs and returns and breakeven prices.
This project has influenced the direction of the Finger Lakes Cheese Trail, now Cheese Alliance, to focus more on common industry needs along with promoting cheese made in the Finger Lakes. It has not yet resulted in a collective re-branding or marketing initiative given that recommendations of the study have only now been summarized for the Alliance member consideration. This fall/winter study results will be shared with the cheesemakers and consideration given to steps that could be taken. However, any initiative that the Alliance undertakes based upon the recommendations of this study will require funding. Having conducted this baseline study will make it more feasible for the Alliance to pursue funding for implementation of recommendations should they choose to pursue them.
Areas needing additional study
-Need to better document the current volume of production and capacity to expand among cheesemakers in the region
-Need to evaluate costs and returns to assess whether pricing strategies at retail and wholesale are effectively covering costs
-Need to evaluate market channels and their returns, which are paying their way? Which are not?
-Need to identify those cheeses that would be in sufficient demand and that could be produced in sufficient quantity to meet new markets
-Need an outreach strategy to contact new potential buyers