Last week, Cowgirl Creamery co-founders Sue Conley and Peggy Smith announced the sale of their business to Swiss dairy giant Emmi. Emmi bought everything: the two retail cheese shops (in San Francisco and Point Reyes Station); the two creameries that turn out Mt. Tam, Red Hawk and the rest of the Cowgirl repertoire; and Tomales Bay Foods, the affiliated distribution company. Conley and Smith will continue to run the enterprise.
Coming so soon after Emmi’s purchase of Redwood Hill Farm & Creamery late last year, the transaction rattled some cheese fans. (Emmi also bought Cypress Grove Chevre, makers of Humboldt Fog, in 2010.) What the hey?
I spoke to Conley last week about why she and Smith sold their 20-year-old business, why they chose a Swiss buyer and what they plan to do next.
Two days after the announcement, how are you feeling?
Really positive. I did read your comment about Redwood Hill, and I agree: Isn’t there another solution besides a foreign company? But honestly, this is the best company I know in our field, and they have proven to be good partners for Mary Keehn (at Cypress Grove). We watched the way she’s been able to continue to grow her business with nothing but support and never interference.
Is this purchase good or bad for American cheese lovers?
I think it’s good because we want the company to continue to grow and offer opportunities for cheesemakers and cheesemongers. Peggy and I are at an age where we’re not willing to take the risk of borrowing large amounts of money. For the last 20 years, we’ve financed everything by mortgaging our homes and pouring everything into our business. And as the company grows, it’s becoming more complicated. We need a higher level of financial management and human resources. So it’s kind of beyond our skill set.
Looking back at 20 years of building these businesses, what were some of the personal high points?
We’re in every part of the business—distribution, retail, cheesemaking—so we’ve touched almost every cheesemaker and monger in the country in one way or the other and that’s been fantastic. Secondly, the opportunity to open a store in the Ferry Building was key to our growth because that gave us access not only to San Franciscans but to visitors from all over the world. So it developed our name, which is a fun name, into an internationally known brand. It was incredibly risky, but the landlord did not look at our books; we were very fragile. We’re lucky that (the landlord) liked us.
I know you love all your “children” equally, but which Cowgirl Creamery cheese are you most proud of? Which one comes closest to what you want it to be?
The cheesemakers we have now are better than I ever was. They continue to improve all the cheeses. But with this investment, the first thing we’re going to work on is bringing our cottage cheese back. (In the past) we made only 60 pounds a week, so maybe 120 people bought it, but they ask me every week at the farmers’ market when we’re bringing it back. It’s a water hog, but with new technology, we can make a better system for saving water.
With the expansion, do you anticipate just making more of your current lineup, or do you expect to add new cheeses?
Cowgirl Creamery Wagon Wheel | Meg Smith Photography
We want to work on Wagon Wheel. We haven’t had enough aging room for it. Right now we can only make about 16 a week. We’ll also make a little more Mt. Tam, but we won’t be a Mt. Tam factory. We want to keep it as handmade and precious as it is. Then we’ll begin to work on new cheeses.
Do you expect to use Emmi’s expertise to modify your processes?
Only in one area and that would be brining. There might be a better way to brine Mt. Tam. The way we do it now, it gets a bit knocked around. But we won’t change the batch size or the way we form the cheese.
Why do you think American companies have not stepped forward to purchase businesses like yours, Cypress Grove and Redwood Hill?
I don’t know an American company focused on the artisan cheese sector. American companies seem to be focused on fast growth or on building to sell. Emmi is in it for the long term. They are interested in growing businesses slowly and sustainably and focusing on milk and farmers.
So your values lined up.
Correct. And maybe it’s just that our part of the industry is so new that no company is large enough to take it on.
With this new parent, what’s the likelihood of Cowgirl cheeses being exported to Europe?
That’s not in the plan, although Matthias (Kunz, an Emmi executive) thinks a more logical place to export would be Canada or Mexico. Emmi has a distribution company in each of those countries. That would be interesting to me, but right now we don’t have enough cheese to supply California.
And the Flip Side
Matthias Kunz oversees Emmi’s operations in the Americas. Based in Switzerland, he responded to my questions about the Cowgirl purchase via e-mail.
News reports say Emmi will provide capital for expansion. Will you also provide technical expertise? Should we expect Cowgirl Creamery cheeses to change?
MK: We are not working to change the way Cowgirl Creamery makes cheese. We love them just the way they are.
All three of your U.S. acquisitions have been in Northern California. Why does Emmi consider this a good place to invest?
We did not make these decisions because of location but because of the culture and spirit of these companies. The most likely explanation for the concentration of great, branded, community-oriented artisanal cheesemakers in Northern California is that the region nurtures these values.
Why do you think an American buyer did not emerge for any of these three businesses? What did a Swiss company see that potential American investors did not?
My understanding is that American buyers did approach some of these companies but with a different path—that path being fast growth with an eye to selling in three to five years. Emmi has a “slow but steady” philosophy, and that had a strong appeal for these three.
American consumers tend to be skeptical of large food businesses. Why should they feel differently about Emmi?
If they look at the track record, they will see what has happened with Cypress Grove. The company is still run by the staff that was there before the merger. They have been able to keep and deepen their distinct company culture. Emmi put money into the community, helped develop a new production facility and a state-of-the-art goat farm that we hope will serve as a model goat dairy. This has helped rejuvenate the farming community in Humboldt County. We see value in building communities, not exploiting them.