That’s a Wrap: Simple Innovation Moves Cheese For Big Dairy Company

Chief Executive Officer

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Innovation comes in many forms to manufacturers, and it’s not always the most complex advance that is the most effective. Crystal Farms is proving that with its latest product twist: a cheese slice.

That’s right. The Minneapolis-based brand already was the largest cheese processor in the Upper Midwest, with its shreds and slices, chunks and cream cheeses. But then the company’s director of product development, Katie Egan, came up with yet another form of cheese that is turning out to a big winner for the unit of St. Louis-based Post Holdings: a round slice of cheese just thick enough and just big enough to serve as a substitute for bread or tortillas to wrap sandwiches or tacos.

All of this occurred before Roxanne Bernstein took over as Crystal Farms’ new president and general manager in March. But her tenure will benefit from a simple innovation that Egan pushed into form as a new twist on the cheese category that already is helping Crystal Farms expand margins and push into retailers beyond its regional base.

“The immediate reaction from everyone, like retailer customers, is, ‘This is just a slice of cheese!’” Egan acknowledged to Chief Executive. “But their second comment always is that this is the beautiful nature of [Cheese Wraps]. The innovation is in its simplicity.”

Egan expounded, “The beauty of this innovation was not looking in our own category and asking what need wasn’t being met by cheese, but looking at the entire grocery store and rising food trends and figuring out where consumers weren’t happy with the options they had.”

Indeed, Cheese Wraps are embodied simplicity. But at just the right size and thickness to replace a tortilla, and with packaging features such as a piece of deli paper in between each slice, they demand a price premium of 20 to 25 percent over standard cheese slices, Egan said. Wraps “have a more substantial package than your average hunk of cheese, as well as a different function, and we had to price in all of the steps it takes to get from fluid milk to a cheese wrap. But we still see it as a value to the consumer. It’s not going to be the cheapest thing on the shelf, but what we’re offering as a consumer proposition matches the price we’re asking them to pay.”

Cheese Wraps took some doing to perfect – and details would be important for a product that wasn’t presenting innovations in taste or ingredients or other promotable attributes. It was a Goldilocks sort of exercise to get all of these factors just right.

For example, Egan explained, the package couldn’t be too big. “There are [merchandising] constraints. We have to get it onto the shelves for anyone to be able to buy it, and if the wraps were too large, there wouldn’t have been anywhere to put them within the store.”

Early indications are that American consumers are happy with the formula Crystal Farms created in Cheese Wraps, which currently come in Mozzarella and Marble Jack varieties. A third flavor, cheddar, is coming in January.

Crystal Farms also continues to churn for other possible innovations under the umbrella of coming up with repurposing of its basic products. Nibblers, for instance, are a new line the company has put into limited test marketing: individual portions of cheese cubes that are “targeted at lunch-box occasions and having something different to put there that is a high-protein snack without the fillers and other stuff that often is in kids’ foods,” Egan said.

“In our pipeline, we have things that are unique because of their simplicity—‘Why didn’t I think of that?’ things—as well as things that are completely in left field and would take some consumer education to get people to understand what these offerings are,” Egan said.

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