Sonoma Creamery Cuts Fresh Cheese Biz To Focus On Snacking

Sonoma Creamery is ending 92 years in the fresh cheese business after selling off the division to global specialty food importer The Atalanta Corporation in early May. According to CEO John Crean, the legacy cheese company has been shifting toward a snack-forward focus since launching its first cheese crisp in 2014.

Sonoma owns the manufacturing for its snack business, but the fresh cheese products are produced by co-manufacturers; no manufacturing assets or equipment were part of the sale. With the deal, Atalanta now holds all assets related to the fresh cheese business including Sonoma Cheese and Sonoma Jack names, supply and retail contracts, in addition to “92 years of brand equity,” Crean said.

“With their resources, both in sales and marketing, and also in product development, we’re very confident the historic Sonoma cheese brand will be in good hands,” said Crean “They’ll be able to not only shepherd that wonderful brand equity, but [also] grow the brand and create new opportunities for their own portfolio.”

As consumers continue to replace meal occasions with snacks, Crean believes it is the optimum time for Sonoma to meet them at the shelf with new innovations, including the recently launched Pizza Crisps in Pepperoni, Tomato Basil and Veggie Supreme flavors. The Sonoma brand has been at the forefront of innovation throughout its history and began blending fresh vegetables into its cheeses in the 1970’s, claiming to have created the original Pepper Jack cheese.

But experimenting in snacks came late in the brand’s life when Crean , who also serves as president and CEO of Estate Cheese Group (ECG), a cheese and dairy management and investment platform, led ECG’s acquisition of Sonoma Creamery from Korean food giant Pulmuone in 2011. Crean also previously co-founded private label wine, spirits and beer company, Winery Exchange.

“Our purchase of Sonoma and the brand was always predicated on the idea that we could expand into other categories and make more out of this historic brand than just the fresh cheese,” he said.

After initially buying Sonoma, the team worked to update the business, including the fresh cheese operations, brand logos, packaging and product assortment. By 2016, Crean said it was clear that the dynamics of the snack business were more attractive than fresh cheese both from a margin growth perspective as well as “extensibility beyond the refrigerated case.” Now, the brand’s snack portfolio includes a range of formats such as Cheese O’s and Pork Rind Cheese Crisps, available in numerous flavors from Savory Seed to Chipotle.

Crean said as the snacks began to scale up, the team started to deprioritize its fresh cheese marketing and new business development efforts. Then in 2017, Sonoma brought in $10 million from private equity firm Svoboda Capital Fund IV, L.P., securing its commitment to snacks with long term financial support.

In the years since, the company has experimented with some non-cheese based snacks as well including a seasonal vegetable crisp line made with whole slices of potato, carrot, cauliflower, sweet potato, tomato and okra. That product line also carries the name Sonoma Snacks, rather than Sonoma Creamery, but maintains the brand-look. However, Crean said the brand’s dedication to cheese snacks will remain central to future innovations.

“We want to separate that brand equity carefully and not diversify too broadly,” said Crean “We will stick to what we do well, and then continuously grow the brand in a steady fashion… We have experimented with some non-cheese based snacks… but primarily our engine and chassis, if you will, is based around cheese.”

The snacks are sold through UNFI and KeHE with the Pizza Crisps already securing shelf space at Kroger, H-E-B, Raley’s and Food Lion in the months since their launch at Expo West. Crean noted that the brand’s relationship with Costco has also helped reinforce its retail business, stating that the sampling and demoing programs help to inform the company’s approach to new distribution and driving consumer trials.

“Better-for-you aspects [like] clean label, simple ingredient deck, those are strong additional reasons to buy, but that’s not the main reason,” said Crean. “People will buy your snacks over and over again because they’re good tasting, have great mouthfeel, they’re addictive in a healthy way – that’s what creates the repeat purchase. That’s what really generates that intimate connection between your brand and the consumer.”

However, the market for baked cheese snacks is already fairly crowded. Brands such as Parm Crisps, Whisps, and John W.M Macy’s all sell extensive lineups of shelf stable cheese crisps. Additionally, Moon Cheese, which was divested by parent company Enwave to Creations Foods earlier this year in a shift away from the CPG snack space, sells a range of crisps, nut and cheese trail mixes (Blitz Mix) and Cheese Sticks.