After layoffs and community concern, the Tillamook cheese factory repositions with a new CEO.
BY JON BELL
Above: Heading up a dairy co-op has been a shift for Tillamook CEO Patrick Criteser, who came from Coffee Bean International. “The farmer-owned co-op is not just a marketing tagline,” he says. “It’s the reality.” // Photo by Sierra Breshears
Below: Though much of Tillamook’s packaging production was moved to Idaho and Utah last year, the cheese factory still runs a packaging line in Tillamook.
When Patrick Criteser came to the Tillamook County Creamery Association as its new CEO in August, he liked what he saw.
Fresh off an eight-year stint with Portland coffee roaster Coffee Bean International, a company whose sales grew by more than 300% during his tenure, Criteser had been looking for an opportunity to contribute to a solid Oregon company, one with both a long history and a promising future. At Tillamook, that’s just what he found.
“Tillamook has such a long-standing heritage, and I think it really reflects the community where it’s based,” says Criteser, a native Oregonian. “It’s well grounded and genuine and committed to the long view of things. At the same time, there are also some aspirations for growing the company and some opportunities in front of us.”
Established by a handful of small Tillamook Valley creameries in 1909, the TCCA today is a co-op owned by more than 100 dairy farm families. Between its two plants in Tillamook and Boardman, it produces more than 188 million pounds of cheese each year. The Tillamook facility also makes 18,000 gallons of ice cream per day, or 5.6 million gallons a year. In addition, the TCCA works with partners in Oregon to make yogurt and sour cream and with others here and in California for its butter.
Tillamook has an annual revenue of approximately $500 million, and with roughly 600 employees — most of them in Oregon, primarily in Tillamook, but also in Boardman and Tigard — it is one of the area’s largest employers.
Like many small communities, Tillamook has seen better days. But Mayor Suzanne Weber is hopeful that the city can work with local businesses, including TCCA, to revitalize the town.
// Photo by Sierra Breshears
The creamery has long been a household name in the Northwest with reams of loyal fans who wouldn’t think of melting anything but Tillamook cheddar on their grilled cheese. But outside the region, even though its products are available in all 50 states, the brand is still a relative stranger. That’s something that Criteser and the TCCA are working to change.
“It’s interesting to be a part of a company that is so well-known in some communities and so unknown in others,” Criteser says, adding that it’s challenging for Tillamook to break the hold that brands like Kraft have on retail shelf space elsewhere in the country.
Before Criteser arrived — after former CEO Harold Strunk stepped down in June — Tillamook was already well into an expanded, multiyear, multimillion-dollar marketing campaign that’s working to expose the brand to new consumers. The campaign has included advertisements, a digital marketing and social media push — Tillamook dedicates five employees to digital marketing, and its Facebook page is liked by nearly 300,000 people — and the “Loaf Love Tour,” which has brand ambassadors visiting hundreds of cities in converted VW buses sharing Tillamook products.
Although the marketing efforts have hit multiple states, the main focus has been Texas, where response has been encouraging.
“As we move into different areas, we’re having to have a different conversation with consumers to introduce them to the product and the brand,” Criteser says. “Once we do that, we get a great response.”
Criteser says Tillamook will continue to work on expanding its reach. He also says there’s room to introduce existing fans to Tillamook products that might be new to them or to new offerings altogether.
Tillamook cheese is a familiar Northwest favorite. In the long term, the company hopes to make itself better known around the country.
Closer to home, Tillamook has a century-old reputation for supporting farmers, providing lasting jobs in the community and generating plenty of tourism activity. The cheese factory alone draws more than 1 million visitors each year, sampling some 30,000 pounds of cheese annually and selling close to 3,000 ice cream cones and dishes each day during the peak summer months.
“Tillamook is the hub for the whole county,” says Suzanne Weber, mayor of Tillamook.
Which is partly why news of employee layoffs in early 2012 stung so badly. Last February the association cut nearly 50 packaging positions from its facility to reduce transportation costs. Up until then, about half of Tillamook’s cheese had been made at a factory in Boardman, trucked to Tillamook for aging, shipped to Idaho for shredding, slicing and packaging, sent back to Tillamook to be warehoused and, eventually, distributed to customers. By outsourcing to two facilities in Idaho and Utah that cut, package and distribute the cheese, Tillamook aimed to save millions, according to then-CEO Strunk.
The news hit hard in Tillamook. Vitriolic comments and accusations of a sellout sprouted up in response to media stories. Someone started a Facebook page called “I used to buy Tillamook Cheese when it was made in Tillamook” in protest.
But the initial flare-up seemed to cool off, and many viewed the job losses not as a one-time hit but as one more layer of the region’s larger economic troubles.
“We had already lost a lot of jobs in the public sector, which made a pretty big impact here as well,” Weber says. “The cheese factory is one of the major employers, but I can’t say that I can see that [the layoffs] have resulted in a loss of business downtown or anything like that. Small towns like this are just the last to recover from a bad economy.”
That said, Weber says she thinks there’s room for Tillamook to become more involved with the greater community, and to use its clout and appeal to help revitalize what used to be a much more energetic city.
“When I moved here 30 years ago, every business was full, but that vibrant flow of energy has gone away,” she says. “We are working hard to engage the cheese factory to work with us.”
Though TCCA cut nearly 50 positions last year, it still employs close to 600 people, and its Tillamook factory draws more than 1 million visitors per year.
// Photo by Sierra Breshears
Though cutting positions was a tough decision, Joe Rocha, a third-generation dairy farmer and chairman of the TCCA board, says it made the most sense from a business perspective. The creamery did what it could to assist those employees who had been impacted, he says, and since then it’s made capital investments in its facilities and even added some positions back, albeit not in packaging. At press time, Tillamook had 13 job openings posted on its website, all of them in Oregon.
“We seem to be through that,” Rocha says of the disharmony the layoffs may have caused.
Of Tillamook’s current trajectory for growth by expanding into new markets, Rocha says the board and the farmers are supportive. With the layoffs now firmly in the rearview mirror, he says the major concerns are related more to the overall health of the economy and ensuring that the Tillamook brand takes its long-standing reputation with it wherever it may go. (During his most recent trade mission to Asia this fall, Gov. John Kitzhaber actually came across Tillamook cheese on the shelves of a Hong Kong grocery store.)
“I really think the farmers have the goal that their families will continue to live and work on the farms, and that their children will keep coming back and taking over the farms,” says Rocha, a married father of four boys, two of whom will likely take the reins of his Tillamook farm, R&R Dairy, when the time comes. “For us to do that, we have to continue to have a successful brand and company, so that really always remains the focus in everything that we do.”
Jon Bell is a Portland journalist and a regular contributor to Oregon Business. Reach him at [email protected].