Guest Columns

Perspective:
Dairy Investment

The next challenge for U.S. cheese: Scaling without adding complexity

Julien Biolley

Julien Biolley is director of business development and marketing, food and beverage, at Milwaukee-based Novonesis Inc. Biolley has served in the dairy industry in Europe and North America for more than 15 years and is a guest columnist for this week’s Cheese Market News®.

The U.S. dairy industry is undergoing a period of major industrial investment.

Across the country, producers and processors are expanding farms and plants, modernizing equipment and building new capabilities to capture growth in cheese, dairy ingredients and high-protein products. The scale of this investment reflects confidence in the long-term outlook for dairy.

But it also raises a more difficult question: Can the industry convert additional capacity into additional value?

That question matters because the dairy industry is becoming more complex. Domestic cheese consumption remains strong, but growth is no longer as linear as it once appeared. Foodservice continues to play an important role, while changing eating habits and pressure on household budgets are creating a more selective consumer. At the same time, exports are becoming an increasingly important outlet for U.S. cheese production.

Global customers are looking for competitive pricing, reliable supply and products that perform consistently across different applications and markets. For manufacturers, adding capacity is only part of the equation. The ability to use that capacity efficiently, and adapt it as markets change, may become just as important.

Protein adds another dimension.

Demand for dairy proteins and protein-rich foods is running hot, supporting investment not only in cheese, but also in whey, milk proteins and related processing capabilities. For manufacturers, the opportunity is therefore not simply to produce more. It is to decide how milk solids, assets and capacity can be directed toward the most attractive opportunities as markets and margins evolve.

A modern cheese plant must increasingly manage different products, formats and customer requirements without creating unnecessary complexity. It must be able to adjust production while protecting yield, quality and consistency. Just as importantly, performance must be repeatable.

This is where flexibility becomes a strategic capability rather than an operational convenience.

A process that works well only when a small number of highly experienced people are present is difficult to scale. A process that is robust, intuitive and supported by the right technology is far easier to reproduce across shifts, lines and even plants.

That becomes particularly important as skilled labor remains a challenge across manufacturing. The issue is not only recruiting people. It is also about training, transferring knowledge, reducing the impact of turnover and making increasingly advanced manufacturing systems easier to operate.

As plants become larger and more sophisticated, manufacturers also need to be more selective about where people spend their time and expertise.

Modern cheesemakers should be able to focus on making cheese.

That means questioning whether every supporting process still needs to be managed with the same level of internal complexity as in the past. Activities such as maintaining and growing starter cultures, for example, require specific expertise, process control and attention. As technology evolves, manufacturers have more options to simplify some of these steps and focus resources on milk conversion, cheese quality, functionality, yield and customer performance.

This is not simply about reducing labor. It is about designing an operating model that is easier to scale.

In this environment, industrial investment should perhaps be evaluated differently. The traditional question is straightforward: How many additional pounds can a new line produce?

But other questions may become equally important. How easily can production move between products? How consistently can performance be reproduced? How much specialist knowledge is required? And how quickly can a plant respond when customer needs or market conditions change?

These questions matter because a large investment can create impressive nominal capacity while still leaving a manufacturer exposed to difficult changeovers, operational bottlenecks or underutilized assets when demand shifts.

Flexibility creates options.

It allows manufacturers to respond to customers, enter new segments and rebalance production without rebuilding their industrial base each time the market changes. In a dairy market where exports, foodservice, retail and protein applications may evolve at different speeds, that optionality has real economic value.

Technology also has an important role to play. The next generation of manufacturing solutions must deliver more than strong technical performance under ideal conditions. They must help simplify operations, reduce variability, ensure quality standards are met and make results easier to reproduce at scale.

That requires more than equipment or individual ingredients. It requires process knowledge, technical collaboration and a deep understanding of how cheese plants actually operate.

The U.S. cheese industry is clearly investing for growth. The next competitive advantage, however, may not come from capacity alone. It may come from the ability to turn that capacity into flexible, repeatable and easy-to-operate capability.

Building more capacity is one challenge. Making that capacity work efficiently across changing markets, products and people may be the bigger one.

And as technology becomes increasingly scalable, the strategic question for cheese manufacturers may be simple: Are our operating models becoming equally scalable?

CMN

The views expressed by CMN’s guest columnists are their own opinions and do not necessarily reflect those of Cheese Market News®.

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