INSIGHT ON: Economic Development – Cheesy returns

Posted on Mar 1, 2015 :: Economic Development , Insight On
Sean P. Johnson
Posted by , Insight on Business Staff Writer
The feta cheese produced at Agropur’s facility in Weyauwega has captured multiple awards in recent years. The company has announced plans to invest $55 million in the plant to expand its production capabilities. Courtesy of Agropur

The feta cheese produced at Agropur’s facility in Weyauwega has captured multiple awards in recent years. The company has announced plans to invest $55 million in the plant to expand its production capabilities. Courtesy of Agropur

Cheese has always been big business for Wisconsin.

Wisconsin has claimed the title as the largest cheese producer in the U.S. since 1910 — the state produced nearly 3 billion pounds of cheese in 2013, more than 25 percent of all the cheese produced.

On its own, the state ranks as the fourth most productive cheese producing region in the world.

What might surprise those on the outside looking in, however, is that much of Wisconsin’s cheese is produced in smaller communities like Weyauwega, where there is easy access to quality raw materials and artisan skills have been handed down through generations.

“There is a lot of tradition, skill and work ethic among our employees, and we are recognized in the market for having high quality products,” says Doug Simon, president of the USA Cheese Business Unit for Agropur.

That skilled workforce was one of the reasons Agropur opted to invest nearly $55 million to expand the capacity of its plant in Weyauwega.

“We have the people there who have the know-how,” says Dominique Benoit, senior vice president for institutional affairs and communication with Agropur. “They make high quality cheese.”

Feta cheese made at Agropur’s Weyauwega plant was named Best of Class in the feta class at the 2014 World Championship Cheese Contest held in Madison, and also garnered Best of Class honors in the feta class in the 2013 United States Championship Cheese Contest.

As demand for feta cheese grows, so has production in Wisconsin, from just 8.1 million pounds in 1993 to 80.1 million pounds in 2013, according to statistics from the Wisconsin Department of Agriculture, Trade and Consumer Protection.

The expanded production capacity will help Agropur capture more of that growing market and continue its role as a market leader for feta cheese.

But with three other cheese plants in Wisconsin, and eight plants around the U.S., there was no guarantee the expansion would occur in Weyauwega.

Agropur is Canada’s largest dairy cooperative in terms of annualized sales — $3.8 billion in the last fiscal year, processes milk at 36 plants across North America and has 7,500 employees. In addition to Weyauwega, its Wisconsin cheese plant locations include La Crosse, Little Chute and Luxemburg.

With nearly 150 jobs on the line, the stakes were high for the state’s economic development agency to step in to make sure it was the plant in Weyauwega that expanded.

“They could have gone anywhere. It was very competitive, not just in the Midwest but all over the country,” says Mark Maley, public information manager for Wisconsin Economic Development Corp. “For us, the emphasis was to first retain the jobs, then get the expansion.”

WEDC will provide Agropur with $1.65 million in tax credits for the project, which the company will receive only if it retains the current 146 jobs at the facility, creates 20 more and makes a minimum $55 million capital investment in the Weyauwega plant.

Maley says the state and region win on three levels: it retains the jobs, strengthens the state’s dairy industry and creates additional opportunities for local businesses.

“Anytime you get a $55 million investment, that’s going to help local suppliers and local contractors,” Maley says.

More than the tax incentives, Maley says the access to local dairy farmers and the skill of its workforce played critical roles in keeping the plant in rural Waupaca County.

Benoit downplayed the possibility the expanded production facilities might have been located elsewhere, but agreed the access to quality milk supplies was a definite strength of the area.

“We have relationships that go back for many years,” he says.

Agropur acquired the Weyauwega plant in 2008 when it bought Trega Foods, which traces its roots in the area through the former Weyauwega Milk Products Co., founded in 1906 by Jacob Wagner.

The expanded feta cheese production lines are expected to be ready for operation in 2016.

“We are a leader in feta cheese production and this will allow us to maintain that leadership position,” Simon says. “We are very excited about this investment and in the future of the Wisconsin dairy industry as it provides employment opportunities and a stable home for milk produced in the area.”