Photo: Cabot Creamery President and CEO Ed Townley holds the Sofi Award for Cabot’s Centennial Cheddar. Cabot, part of Agri-Mark Cooperative, is celebrating its 100th anniversary this year. Courtesy photo.
by Bruce Edwards Vermont Business Magazine Over the years, Vermont has garnered a well-earned reputation for its quality products. At or near the top of that least is one of the state’s oldest companies – Cabot Creamery and its award winning cheeses.
This year Cabot is celebrating its 100th anniversary, a milestone that eludes most businesses.
“For a co-op to not only survive, (but) live and thrive for a hundred years is a real tribute to the owners, which are the farmers and the investment they have made in the Cabot products and in their brand recognition over the course of the last 100 years,” said Cabot President and CEO Ed Townley.
Photo: Ed Townley, Cabot President and CEO. Courtesy photo.
Townley said the proof is in the awards the Cabot brand has received over the years. This year alone, he said Cabot was honored with the most awards in its history for its cheese and butter products.
Cabot has expanded since its first started making butter in 1919 in Cabot.
Cheddar and cottage cheese were added in 1930, new production facilities came online through the 1970s and 1980s, including a visitor center in Cabot. In 1992, Cabot merged with Agri-Mark Cooperative allowing it to expand with a rebuilt plant for butter production in West Springfield, Mass. That was followed by Agri-Mark’s addition of a plant in Middlebury for cheese and later whey production. In 2003. Chateaugay Cooperative merged with Cabot and Agri-Mark, adding the McCadam brand Chateaugay plant in New York.
Today, Cabot cheese is found in all 50 states and in major supermarkets.
“We really have spread nationally although our core business, about 60 percent of what we sell, is in the Northeast,” said Townley, who has been with the co-op 16 years.
Photo: Cabot cheese. Courtesy photo.
Cabot makes a variety of dairy products but cheese is the most profitable and consumes most of the milk the Agri-Mark co-op makes, he said.
Agri-Mark has 872 farm members of which 230 to 240 are in Vermont, Townley said.
“We’re a closed co-op at this point mainly because we have more than enough milk to satisfy our needs,” he said.
With 1,500 cows, one of Cabot’s largest farms is the Audet family’s Blue Spruce Farm in Bridport.
Marie Audet said the farm and Cabot share the same values.
Photo: Marie Audet of Blue Spruce Farm in Bridport, VT. Courtesy photo.
“In order to be a farmer you have to live in a community that welcomes you and you have to be part of that community,” Audet said.
She said that sense of community is reflected in events like Open Farm Sundays.
“It’s hard enough to be in agriculture so it’s nice to have this extended sense of community all the way through to the people who love our products,” Audet said.
For the 100th Cabot anniversary, the farm hosted a series of events including one at the Shelburne Museum.
She said it was heartwarming when the hundreds of people who attended “stopped to get cheese and thank us and tell us how great our product is.”
Cabot makes butter, yogurt, cottage cheese and sour cream. But it’s the cheese that drives Cabot’s reputation.
“Every time we get another award for our cheese we know what that means to all of us … it raises us up another notch,” Audet said.
Agri-Mark produces 3.2 billion pounds of milk a year and turns out 155 million pounds of cheese.
Of the co-op’s 920 employees, 600 are in Vermont including Cabot, Middlebury and at the Cabot headquarters in Waitsfield.
For dairy farmers, the roller coaster ride of milk prices makes for economic uncertainty.
From a high of $24 a hundredweight in 2014, prices plummeted to $15 to $16 a hundredweight, Townley said. This year, prices have recovered a bit to $18 a hundredweight.
Over the last three years low milk prices contributed to putting almost 100 of the co-op’s farms out of business, he said.
Being a co-op member helps cushion the blow with farmers receiving the added benefit of a premium for their milk.
“The farmers get a benefit from the co-op in that we subsidize some of their transportation, the hauling of the milk, and we also give them premiums for the quality of the milk and beyond that we pay the federal order pricing,” Townley said. “Then with the sales of our product and the profits that the company makes 100 percent of those profits are owned by those farmers.”
He said profits are distributed in two ways: in a partial cash distribution with the rest reinvested in the co-op.
At the time Cabot merged with Agri-Mark in 1992, the Cabot business was about $35 million in annual sales. Today, annual sales top $600 million, Townley said.
The trade war with China has impacted the sale of whey from the Middlebury plant, the co-op’s largest cheese plant. Whey, a byproduct of cheese production, is used in protein drinks but most of what is sold, called permeate, is exported to China as animal feed.
“It’s not a major product (whey) for us but it had a major effect because of both the price and the amount of demand coming out of China,” Townley said.
The 25 percent tariff imposed by China last year wiped out the slim profit margin on whey exports resulting in a loss, Townley said.
Although a very low-value product, he said the Middlebury plant was selling 40 million pounds to China. “At 30 cents (a pound) it’s a break even product,” he said. With the tariff, he said the co-op was losing $2.4 million on its whey exports.
China has since rescinded the tariff but a bigger problem has emerged. Townley said an outbreak of African swine flu in China has devastated the country’s pork industry, resulting in a glut of whey permeate on the world market.
Townley said it will likely be at least a year before China’s hog industry begins to return to normal.
Cheese is a very competitive industry and Cabot is taking steps to expand its product offerings.
“We don’t have a mac and cheese at this point but that’s something we think about,” Townley said.
For dog lovers, he said Cabot this fall is coming out with a series of Cabot dog treats.
He said “with the American public on the go” the marketplace is demanding more convenience.
The co-op sells convenient cracker cuts and will soon come out with a line of sliced cheeses on a peg board in a resealable package, he said.
Townley said the Cabot brand and Agri-Mark are not only important to its member farmers but to the state’s economy.
“We are an exporter and we bring dollars in and the farmers who are getting the money are spending all that money locally,” he said.
For a little company, Audet said Cabot and Agri-Mark “have done pretty well.”
Bruce Edwards is a freelance writer from Southern Vermont.