Demand for cream cheese hits Kraft Heinz

The Kraft Heinz factory, 7388 Utica Boulevard in Lowville, pictured Oct. 14. Kara Dry/Watertown Daily Times

LOWVILLE — Lowville milk producers are giving all they’ve got to Kraft Heinz as high demand for cream cheese continues.

Increased production is business as usual during the holidays, but like most things over the past two years, there’s nothing “normal” about it this time.

“They’ve increased production quite a bit. They’re taking all of our milk. I think they’re ordering milk from away, too, just to meet the demand,” said Brien L. Tabolt, general manager of Lowville Producers Dairy Cooperative. “To us it hasn’t really changed much of anything, really, other than the fact that we have had a hard time getting it in the store, too.”

That changed.

As of Wednesday, Mr. Tabolt said the cooperative’s Cheese Shop on Utica Boulevard next to the Kraft plant had shelves full of Philadelphia Cream Cheese bricks and tubs in various sizes.

They even have a cooler full of the 30- and 50-pound commercial bricks which are usually purchased by bagel shops and other eateries north and west of Albany that may pick up 10 or 15 at once, Mr. Tabolt said.

“(The increased demand) is a good thing for us,” he said. “Most of the time they take everything we can produce, but we went through a spell this summer where they just couldn’t do it and they ran into problems taking our supply. Now things are looking a lot better and I’m happy for them.”

Dairy prices are set by the U.S. Department of Agriculture every year. Neither the 165 farms in the dairy cooperative nor Kraft Heinz have the ability to change those prices,

In the short term, Mr. Tabolt said the increase in demand is not expected to have a substantial impact on the local economy — but ensuring all of the cooperative’s milk gets purchased is always a win.

When Kraft Heinz buys a substantial amount of milk beyond contracted amounts, there can be additional benefits to local farmers, Mr. Tabolt said, but because “it wasn’t that much more” he said the subject hasn’t been broached with the company.

The demand for cream cheese has been on the rise since the beginning of the pandemic in 2020.

According to information provided via email by a Kraft Heinz spokesperson, cream cheese retail sales were up 18% in 2020 compared to 2019, and remained high in 2021, while commercial sales of the popular spread whipped up by 75% in November this year compared to the same month last year.

“More people continue to eat breakfast at home and use cream cheese as an ingredient in easy desserts, such as cheesecakes,” Kraft Heinz said. “As consumers feel more comfortable leaving their homes and commuting in to their offices, we’ve seen food service demand, such as bagel shops, skyrocket this past year.”

The company said it has increased its food service production and is shipping about 35% more product compared to last year.

Information was not provided about how that increase compares to pre-pandemic demand during the Christmas season, which is notoriously higher than the rest of the year.

The company also would not comment on the impact of supply chain challenges — related to imported resins used to make packaging, for example — on the supply of its Philadelphia brand cream cheese.

Staffing challenges over the summer that were happening around the country took their toll on the local plant as well, but Mr. Tabolt said he believes they are “getting things figured out over there and it’s going well,” although there are still a number of job vacancies at the plant being advertised.

Lowville Mayor Joseph G. Beagle, who worked to help solve water usage issues with the company over the summer, said he has been impressed with how well Kraft Heinz has addressed the problem.

Even with increased production, the plant’s water usage has remained around 800,000 gallons daily, which is safely within its normal range, relieving water pressure on the local community.

The company is also taking some short-term actions to keep customers frustrated by the lack of cream cheese on shelves happy, by potentially diverting more than 5,500 pounds of cream cheese elsewhere in the supply chain.

Because Christmas is cheesecake-making season for many people, the Philadelphia brand announced Wednesday morning it will be reimbursing $20 each to 18,000 people who make or buy a dessert other than cheesecake for Christmas.

“Having a hard time putting cream cheese on shelves means having a hard time putting cheesecakes on tables, and we get that,” says the YouTube video explaining the “Spread the Feeling” campaign. “So this year, turn your famous cheese cake into famous brownies ... (or) anything that will make you feel anything in that cheesecake-shaped hole in your holiday heart ... because this year, if you can’t spread Philly, spread the feeling.”

People who register on the website on Friday and Saturday at noon will be sent a dedicated link where receipts can be uploaded to get the $20.

With cheesecake recipes requiring, on average, about five 8-ounce boxes of cream cheese, saving 18,000 cheesecakes could mean 5,625 pounds of cream cheese to be spread elsewhere.

In the long term, Kraft Heinz said it is “investing millions of dollars on Philadelphia cream cheese, including production.”

For Mr. Tabolt, as long as the milk contributed by member farms is purchased, his biggest concern is to continue to satisfy demand with well-stocked coolers.

“I am very glad (cream cheese) is doing so well. That makes a brighter future for Lewis County,” he said, “The more they sell, the better it is.”

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Johnson Newspapers 7.1

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