May 24, 2004

Kraft cheese: The horror?

The Wall Street Journal had a good front-page article Friday on how big food companies like Kraft, Unlilever, Campbell Soup and others are losing sales as customers turn away from processed foods. Here's a free link, which should be good for a week.

Of interest here is the lengthy discussion of Kraft's cheese business. Did you know they patented processed cheese in 1916? That they have a whole category known as "aerosol cheese?" That they grew for almost a decade simply on the strength of their idea to pre-shred cheese?

I have excerpted a section from the article here. However, I must warn you that:

The material you are about to read is graphic in nature and not intended for consumption by minors. If you have a heart condition, upset stomach or are eating lunch, you should stop reading right now. Use of the word a "cheese" in the preceding introduction is not legally binding but rather serves as journalistic shorthand for a variety of generally orange product types including but not limited to "Cheez" and "Kraft Deluxe processed slices." Reader discretion is advised.

From the WSJ article:

To understand the challenge Kraft faces, consider cheese, its single biggest product. In 1916, J.L. Kraft's patent for processed cheese helped catapult Kraft from a commodity business to a unique cheese company with a product that came off assembly lines with more consistent quality than natural cheese and stayed on shelves longer without spoiling.

The company's next cheese breakthrough was Velveeta in the late 1920s. Then in the 1940s, Kraft scientists started working on a way to produce cheese in slices. Using a "chill roll" machine that caused hot cheese quickly to cool as it revolved over a cold drum, a sheet of cheese could be uniformly sliced into three-inch squares and stacked. Within one year of its national introduction in 1950, Kraft Deluxe processed slices became the most successful product introduction in the company's then nearly 50-year history. Cheez Whiz hit store shelves soon after.

The company has honed its skills, chopping and processing cheese into snackable forms, over several decades, as consumers demanded more convenience. Starting in the early 1990s, "shredding cheese drove the business for many, many years," says Mr. Deromedi, who once headed the unit and still avows an "incredibly strong" passion for the cheese business. "We've had great success just slicing our chunks of cheese, or adding reclosable packaging."

There's more in the article, but here's a summary of the additional facts:


  • Kraft now has five types of "bagged cheese cubes" and a wide mouth jar of Cheez Whiz for dipping.
  • Asiago sales jumped 43 percent last year, according to Information Resources Inc.
  • Also last year, sales of "Kraft aerosol cheese," including Cheez Whiz, fell 10 percent, its processed cheese fell 2 percent and natural cheese sales grew 5 percent.
  • Sales by top U.S. brie purveyor Lactalis SA of France grew about 10 percent a year over the past three years

Posted by ryan at May 24, 2004 12:08 PM | TrackBack