Bel/Kaukauna USA

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Bel/Kaukauna USA

1500 East North Street
Little Chute, Wisconsin 54140
U.S.A.
Telephone: (920) 788-3524
Fax: (920) 788-9725
Web site: http://www.kaukaunacheese.com

Wholly Owned Subsidiary of Fromageries Bel
Founded: 1918 as South Kaukauna Dairy
Employees: 350
Sales: $101.9 million (2004)
NAIC: 311513 Cheese Manufacturing

Located in Little Chute, Wisconsin, Bel/Kaukauna USA is the American subsidiary of Paris-based Fromageries Bel. The company makes a variety of processed cheese products. Kaukauna spreadable cheese is packaged in cups and tubs and is available in a wide variety of flavors, from sharp cheddar to port wine. The Kaukauna brand is also found on cheese balls and cheese logs, which are offered in flavors similar to the spreadable product, and on a variety of Mexican sauces & dips, which include cheese items as well as salsa and French onion and ranch dips. In addition, the company manufactures and markets a number of brands picked up from its corporate parent, including spreadable cheese brands WisPride, Merkts, Owl's Nest, and Connoisseur; The Laughing Cow processed cheese wedges; Mini Baybel natural cheeses; and Price's pimiento cheese spreads. In addition to its Wisconsin operation, Bel/Kaukauna also operates a plant in Leitchfield, Kentucky, and a satellite sales office in Fort Lee, New Jersey.

Founding Family Immigrates to Wisconsin in the 1800s

Kaukauna Cheese was founded by Hubert Fassbender in Kaukauna, Wisconsin. His father, Peter Fassbender, was born in Prussia in 1838 and moved with his mother and stepfather to the United States in 1856, landing in New York and settling in Wisconsin. In 1862 he was married and a year later bought farmland in Outagamie county, where he and his wife raised nine children, including Hubert, the sixth in line, born in 1875. Over the years the elder Fassbender bought more land to grow a dairy operation and in 1887 built a cheese factory, with the milk coming from his own cows as well as neighboring farms. When he was 14 Hubert Fassbender began to learn the cheese making trade in his father's factory. In 1901 Peter Fassbender sold his farm to a son, Joseph P. Fassbender, and sold the factory to Hubert, who rebuilt the facility, turning it into one of the largest creameries and cheese factories in the area. Using Appleton, Wisconsin, as his main distribution point, Fassbender began shipping his product all over the country.

In 1918 Fassbender started a distribution company known as South Kaukana Dairy, which became known as Kaukauna Dairy Company, and eventually took the name of Kaukauna Cheese. When Prohibition came to an end in 1933 his distribution company handled another favorite Wisconsin product: beer. According to the Wisconsin Center for Dairy Research, Fassbender became a pioneer in spreadable cheese through his beer depot business. Known as cold pack cheese, spreadable cheese, unlike processed cheese, mixed cheeses and other ingredients together with the use of heat. It was a good way to make use of old cheese beginning to dry up and was no doubt produced by frugal people long before Hubert Fassbender began tinkering with the idea. After he had started delivering beer, tavern owners asked if he had something the patrons could wash down with that beer. The idea of the free lunch was hardly new, and cheese makers had long depended on the sale of cheese to barrooms, which offered it along with bread, ham, eggs, pickles, and the rest of the usual spread of a free lunch.

Early 1930s Introduction of "Club Cheese"

Using his extensive background in cheese making, Fassbender looked for a way to make use of excess cheese while satisfying the request of his beer customers. After some experimentation he perfected the production of cold pack cheese that could be spread at room temperature. In brief, the method combined finely ground natural cheese with whey solids, dry milk, and any number of flavorings. In 1933 he began providing the cheese to customers—taverns, clubs, and hotels—if they bought enough beer. It proved popular with patrons who nick-named it "club cheese." According to great-nephew Gary Fessbender, interviewed by the Wisconsin Center for Dairy Research, customers after a while were more interested in Fassbender's club cheese than his beer. Thus, in 1933, Fassbender created the Kaukauna Klub brand of cold packed cheese, marketed in a gray stone crock container about four inches in diameter, using the slogan, "It spreads like butter." After first establishing the business by selling the crocks to taverns, Fassbender sold it in retail channels and gradually made it into a national brand. Other Wisconsin cheese makers followed his example and began launching their own brands of club cheese. A major reason why Kaukauna Klub had staying power was that its founder did not simply see the product as a way to make use of scraps. According to company information, he once said, "We must never waste our care nor risk the flavor of Kaukauna Klub trying to work with cheese that isn't worthy of the effort."

Kaukauna Cheese was sold to Minneapolis-based International Multifoods Corporation in 1971. Multifoods had started out as a flour milling operation, best known for the Robin Hood brand. At one point the company, along with General Mills and Pillsbury, was a member of the "Big Three" in U.S flour milling, but Robin Hood always lagged behind the others in brand recognition. In the early 1960s the company began an aggressive diversification effort into the consumer foods markets and over the next decade acquired more than 40 companies, including a number of niche-market food products companies like Kaukauna Cheese.

With the financial backing of its new corporate parent, Kaukauna Cheese in 1974 opened new facilities in an industrial park in Little Chute, Wisconsin. With more specialized equipment now at its disposal, the company would emerge during the 1970s as America's largest manufacturer of cheeseballs and cheeselogs. Then, in the 1980s, Kaukauna Cheese expanded its product offering to include a line of Mexican-style cheese dips and other sauces.

Multifoods was a billion dollar company by 1980, having enjoyed a decade-long period of strong growth. The increases continued until 1984, but disturbing signs were emerging. Nearly all of its consumer products were losing market share and only one, Kretschmer Wheat Germ, was a market leader. Multifoods lacked focus, the byproduct of an indiscriminate buying spree as well as meager brand recognition for the Multifoods name. The company now undertook a restructuring program, a selling and buying of assets that over the course of several years transformed Multifoods from a flour milling and consumer foods company into a major foodservice distribution and manufacturing company.

Regaining Independence in the Mid-1980s

One of the subsidiaries Multifoods chose to divest was the Kaukauna Cheese operations. In 1986 a Kaukauna management team, led by Robert Gilbert and private investors, formed Kaukauna Cheese Corp. to buy the business. The transaction was completed in early 1987 and Kaukauna Cheese was once again an independent company, with Gilbert serving as president and chief executive officer.

That independence lasted a decade. During that time Kaukauna Cheese made headlines by becoming the first company, in 1991, to use the all-natural fat substitute, Simplesse 100, developed by NutraSweet using a whey protein concentrate. The "light" cheese category was extremely competitive, and for several years Kaukauna Cheese's entry had experienced flat sales. The new product, called Kaukauna Lite 50, reflecting a 50 percent reduction in fat, was produced in four varieties and sold side by side with the company's other cold pack products. Other cheese makers would soon follow the company's lead and introduce their own products using Simplesse 100.

Kaukauna Cheese was doing well in the mid-1990s, generating annual sales in the $50 million range, but when it was approached by Fromageries Bel about selling the business, management listened. "I'm not going to live forever," Gilbert told the Milwaukee Journal Sentinel. "In life, you can't pick your moments, and this is a company we respect, they approached us, and discussions took off from there." In February 1996 the two parties announced they had reached an agreement. Fromageries Bel's New Jersey-based subsidiary, Bel Cheese USA, Inc., would purchase the assets of Kaukauna Cheese, which included a manufacturing and distribution facility in Little Chute, a retail store in the town, and a refrigerated ware-house in Neenah, Wisconsin.

Gilbert also received a contractual assurance that the operation would not be relocated. Given that Kaukauna Cheese had recently moved into a new $3.5 million plant and produced as much sales as all Bel Cheese USA products combined, there was no desire on the part of the new corporate parent to move the operations. But it was an important commitment nonetheless, given the problems Bel Cheese USA had encountered with another Wisconsin cheese spread maker, Wispride. About a year earlier Wispride's plant was closed, costing about 120 people their jobs, as Wispride production was moved to Leitchfield, Kentucky. In November 1995, Wisconsin Attorney General Jim Doyle filed suit against Bel Cheese USA, alleging that its use of the Wispride trademark, which indicated the cheese products came from Wisconsin, amounted to false advertising.

Company Perspectives:

Innovation, quality and a friendly approach define who we are.

After the acquisition of Kaukauna Cheese, Fromageries Bel reorganized its U.S. subsidiary, not only streamlining the operation but eliminating the nettlesome problem with Wispride. In late 1996 and early 1997 Fromageries Bel announced a number of sweeping changes. First, the production of Wispride products was transferred to the Little Chute plant. The move was not made to settle the pending lawsuit with the state of Wisconsin, but was just an ancillary benefit. The company maintained that cost studies it conducted revealed the Wispride line would be less expensive to produce in Kaukauna's newer plant. Fromageries Bel also decided to downsize the Fort Lee, New Jersey office, making it a satellite sales office and shifting administrative positions to Little Chute. The New Jersey office and its marketing team would continue to market the Bel brands and Price's brands, while Wispride marketing would be taken over by the Kaukauna marketing group. Moreover, the sales force of Kaukauna Cheese and Bel Cheese USA were to be integrated, resulting in staff reductions. Regional managers would now be responsible for the line of products produced by Bel Cheese USA and Kaukauna Cheese. Finally, Fromageries Bel decided to rename its U.S. operations Bel/Kaukauna USA. The head of Bel Cheese USA, Patrick Robbe, a French native, was reassigned to Paris, and Kaukauna's Robert Gilbert took over the presidency of the combined enterprise. While the changes resulted in the loss of jobs in Kentucky and New Jersey, it also meant that Little Chute would be adding about 40 production jobs, several managers, and another half-dozen clerical employees. The Little Chute plant would increase its poundage volume by about 25 percent over the previous year. "I would say that the latest round of decisions solidified our position for the future," Gilbert told Appleton, Wisconsin's Post-Crescent, "and shows that Fromageries Bel is fully committed to its operations in the United States."

To accommodate its enlarged business in Little Chute, Bel/Kaukauna expanded its offices and production facilities. That extra room would be needed in 2002, when the company acquired a number of brands from Ohio-based Lakeview Farms Inc. It added the Merkts and Owl's Nest cheese spread brand and several private-label brands.

Over the years Kaukauna Cheese had won an abundance of awards for its products. Under French ownership that would not change. In 2003, for example, the company's sharp cheddar cold pack cheese won first place in a countrywide contest sponsored by the Wisconsin Cheese Makers Association. In that same year, at the Wisconsin State Fair, the same product won the Governor's Sweepstakes Award.

Bel/Kaukauna received a major break in 2003 when "The South Beach Diet" book, which became a runaway bestseller, included a wedge of Laughing Cow light cheese and a pear as an afternoon snack in a sample meal plan. As a result the demand for Bel/Kaukauna's Laughing Cow wedges skyrocketed. The company could not make the product fast enough and had to expand production in its Kentucky plant and import product from France, where it originated in 1921. The logo came from the smiling cow pictures stenciled on the trucks that supplied food to French soldiers in the field during World War I. "If you are an old cheese warrior like me, this breaks your heart," Gilbert told the Wisconsin State Journal. "I fought and clawed for every pound I could get in this business and it breaks my heart that we aren't able to ship more." He had to be content to take advantage of the trend as much as possible while he could. "If other fads are any indication, if other diets are any indication, people will tend to slip away and fall away," Gilbert told the Journal. "But hopefully when they do, they are going to remember that Laughing Cow tastes great."

Principal Operating Units

Kaukauna; WisPride; Merkts; Owl's Nest; Price's; The Laughing Cow; MiniBabyBel; Connoisseur.

Principal Competitors

Kraft Foods North America, Inc.; Saputo Cheese USA Inc.; Sargento Foods Inc.

Key Dates:

1887:: Peter Fassbender builds a cheese factory in Kaukauna, Wisconsin.
1901:: The factory is sold to son Hubert Fassbender, who turns it into one of the largest creameries and cheese factories in the area.
1918:: Fassbender starts a distribution company known as South Kaukana Dairy, which eventually takes the name of Kaukauna Cheese.
1933:: Fassbender creates the Kaukauna Klub brand of cold packed cheese, which becomes a national brand.
1971:: Kaukauna Cheese is sold to Minneapolis-based International Multifoods Corporation.
1987:: A Kaukauna management team completes the purchase of the business, with Robert Gilbert serving as president and chief executive officer.
1991:: Kaukauna Cheese becomes the first company to use the all-natural fat substitute, Simplesse 100, developed by NutraSweet using a whey protein concentrate.
1996:: Fromageries Bel's New Jersey-based subsidiary, Bel Cheese USA, Inc., purchases the assets of Kaukauna Cheese.
1997:: Kaukauna Cheese undergoes substantial reorganization, and Fromageries Bel decides to rename its U.S. operations Bel/Kaukauna USA.
2002:: The company acquires a number of brands from Ohio-based Lakeview Farms Inc.
2003:: Bel/Kaukauna receives a major break when The South Beach Diet book, which became a runaway bestseller, includes a wedge of Laughing Cow light cheese and a pear as an afternoon snack in a sample meal plan.