March 17, 2006
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CONCENTRATING ON FETA — Euphrates Inc. produces one type of cheese — Feta — but offers it in a number of different formats for foodservice. The company now is adding a retail line as well.

By Kate Sander

JOHNSTOWN, N.Y. — High-quality Feta made in a state-of-the-art plant following the most stringent of standards — that is the focus of Euphrates Inc., a relatively new entry on the U.S. cheesemaking scene.

Euphrates Inc. has been making cheese for three years now, and business is growing steadily, says company owner Hamdi Ulukaya.

It certainly has helped that while Euphrates is a newcomer to the U.S. cheese industry, Ulukaya is not new to the cheese business. A third-generation cheesemaker whose family owns Feta and yogurt operations in Slovakia and Turkey, Ulukaya attended college in New York in the mid-1990s. After brief consideration of importing the family’s Feta to the United States, in 1998 he and his family decided that there was potential for him to build a solid Feta business in the United States.

“We thought the quality of U.S. Feta was low then and that we could bring high-quality Feta production (to the United States),” he says.

One of Feta’s problems has been that its flavor is too strong and too salty for the American palate, Ulukaya says. Feta traditionally was salty because there wasn’t refrigeration, and salt was needed to preserve the cheese. Obviously that isn’t a concern in the United States today, so Ulukaya thought that by reducing the salt level and letting the cultures give the cheese its flavor, he could make a cheese similar to what his family is making in Europe and that would appeal to U.S. consumers.

Ulukaya and his family — which includes his brother Bilal, who currently operates a plant in Slovakia — began investigating the U.S. market. Ultimately they decided to build a plant from scratch in Johnstown, N.Y., and the building was completed in 1999. However, operations were sidelined when Ulukaya’s parents died within six months of each other.

The loss of his parents was difficult and stymied the business plan, but eventually the family began to move forward again. They imported equipment from Europe, and in 2002 Ulukaya and his staff began producing cheese. The company was named for the major river that flows near where Ulukaya grew up in Turkey.

Euphrates remained on the quiet side at first, getting a feel for the market as well as fine-tuning its cheese.

“We kept a low profile until we knew 100 percent we had a cheese we knew we were happy with,” Ulukaya says.

Today, Ulukaya is very pleased with the cheese his company is making. He believes the quality of milk in the United States is among the best in the world and that the quality of milk combined with the family’s cheesemaking know-how result in excellent cheese. Now, he and his staff are working on making inroads in markets across the country.

It only has helped, Ulukaya says, that in recent years Feta has enjoyed a surge in popularity in the United States. At first, Euphrates’ cheese was primarily marketed for foodservice in New York and other assorted points on the East Coast. Now it can be found coast-to-coast.

“The quality of cheese speaks for itself,” says Philip Alibrandi, the company’s national sales manager. “We’ve had customers say it’s the best Feta they’ve ever had. We’ve cut well against everybody.”

Up until now, the vast majority of Euphrates’ Feta, which is available in brine, vacuum packs and crumbles, has been sold in larger sizes for foodservice. However, the company will launch a retail line this spring. The line will include the company’s standard Feta offerings in consumer-sized packages as well as a few flavored varieties: Mediterranean, Tomato and Basil, and Herb.

“We don’t want to make it too crowded … we just want a few things to add to the line,” Ulukaya says of the decision to add flavored Feta to Euphrates’ lineup.

The cheeses will be available under Euphrates and the company’s Marmaris brand name as well as private label.

Growth has been steady, and the plant’s capacity is quite large, he says. The company presently employs about 35 people in production and sales.

“We don’t want to grow too fast, we want to grow healthy, in the 25-30 percent range annually,” he says.

To get the word out about the company’s products, Alibrandi says he relies on a great deal of face-to-face time with customers. The company places high priority on customer service.

“We’re very much quality-conscious and very much people-conscious,” Alibrandi says.

“We’re proud of our customer service,” Ulukaya adds. “Every single customer is important to us. We look out for their interests.”

In addition, it won’t be long before Feta isn’t the only product the company’s customers can buy from it. Last August, Ulukaya purchased a former yogurt plant in South Edmenston, N.Y., from Kraft. Newly-named Agro-Farma Inc., the facility will debut Greek-style yogurt next month. While Agro-Farma Inc. technically is a separate venture from Euphrates, the two companies enjoy a number of synergies and share sales staff.

The yogurt, free of artificial colors, flavors and added sugar, will come in plain and in fruit varieties that contain real pieces of fruit, Ulukaya says, noting this will give it a very “clean” label compared to standard yogurts presently on the market. The product line is being targeted toward restaurants as well as retail. Although it’s likely to appeal most to health-conscious consumers, Ulukaya aims to have the yogurt both in specialty food stores as well as mainstream stores. The products will be available under a company-owned brand name.

It’s difficult not to hear the enthusiasm in Ulukaya’s voice as he calls the product a “beautiful, beautiful line.” He expects that the yogurt will replace some imports of Greek-style yogurt, just as the company’s Feta already has displaced some European imports.

“It’s good enough to be competitive everywhere,” Ulukaya adds.

Alibrandi also has high hopes for the yogurt line. U.S. consumers are just becoming aware of Greek-style yogurt, and there is growing interest.

Presently, Agro-Farma Inc. employs 10 people. Ulukaya expects the company will have 30-35 employees by the middle of next year, and over the next four years, the company expects to employ 60-80 people.

As with Euphrates, Ulukaya wants Agro-Farma’s growth to be controlled and sustainable. The fact that the companies don’t produce numerous products allows them to do what they do best without distraction, he says.

“First and foremost we’re a Feta company,” Alibrandi says, “and we don’t teeter from that.”

“We’re strong in these two areas,” Ulukaya adds. “We want to focus on the Feta and yogurt we have.”

CMN