How Tillamook cheese dodged supply chain snags during COVID

Business

"We’ve certainly been fortunate but we’ve also taken a lot of precautions."

CLACKAMAS COUNTY, Ore. (KOIN) — The coronavirus response hit food processors, particularly in the dairy industry, hard. Processors scrambled to adjust to changing demands and farmers worried they may be left with tens of thousands of gallons of milk and nowhere to send it.

One of Oregon’s flagship creameries, though, largely avoided those problems.

“We’ve certainly been fortunate but we’ve also taken a lot of precautions,” Tillamook County Creamery Association CEO Patrick Criteser told KOIN 6 News. Implementing social distancing measures in processing plants early on made a big difference, according to Criteser, as did the company’s integrated supply chain and “frequent contact” with suppliers and customers.

The Tillamook co-op sends dairy to two plants, one in Tillamook and one in Boardman. There, it’s converted to cheese and the blocks are stored for anywhere from 60 days to several years for the aged cheeses.

The bulk of Tillamook’s business is already designed to make products people can buy in the grocery store, which gave them an advantage during the COVID-19 response. While restaurant demand plummeted, store shelves were wiped clean.

“We saw a very significant increase in demand beginning in the middle of March,” Criteser said. “Overall 40-50% higher than the previous year.”

That tapered off after the initial rush of “pantry-stocking behavior,” but the company has still seen demand at 30-40% higher than normal as people continue to eat more meals at home.

Tillamook CEO Patrick Criteser says his co-op managed to avoid severe supply chain problems during the COVID-19 response (Skype)

One area where the industry struggled early on in the pandemic response was processing plants’ ability to pivot.

“Each processing plant generally has a certain purpose,” Kimmi Devaney, communications director for Dairy Farmers of Washington told KOIN 6 News back in April. “There’s a cheese plant, a milk plant, a butter plant, and a drying facility to create dry milk powder. The dry milk powder plant can’t just pivot and become a cheese plant. A cheese plant can’t just pivot and become a yogurt plant overnight.”

In some states, dairy farmers had to dump tens of thousands of gallons of raw milk because there was nowhere to send it as the processors struggled to adapt.

Oregon State University professor of Supply Chain and Operations Management Zhaohui Wu told KOIN 6 News the effects of that loss go beyond the farmer.

“Then they will be bailed out by the government,” Wu said. “You many cases. So there’s a societal cost, it’s tax dollar.”

Processors also had to change the way they package existing products. For example, they may have previously packaged things like dry milk powder or cheese in massive quantities for exports or restaurant use.

“The packaging is different and the cut is different,” Wu said. “And as for the cheese the same way and the most of the cheese we use for pizza restaurants and now we don’t really do so much cheese.”

Zhaohui Wu had a lot more to say about the current state of our food supply. Find out how the pandemic is highlighting some problems that have been around for decades by listening to the podcast below or downloading it from Apple Podcasts, GooglePlay, Spotify, Stitcher or Podbean.

Criteser said Tillamook was able to reroute the comparatively small amount of product it would normally send restaurants.

“(Stores are) noticing people go in and buy, you know, five bags of something and carry that out of the store with them,” he said. “So they’re actually looking for some larger pack size options.”

Essentially, instead of a customer buying five one-pound bags of shredded cheese, they might be able to find one five-pound bag of shreds.

“We feel very fortunate that business has been strong,” Criteser said. That’s why the company pledged to donate $4 million in COVID-19 relief funds. Read more about that in our previous story.

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