Authors: Michael Moss
Ultimately, Block won. Processed or not, the government stopped buying the excess dairy. Washington tried to help out by discouraging, in the form of incentives, excess production. It paid operators $955 million
to make less milk, and the country’s dairies pledged to do their part by sending 339,000 milk cows to an early slaughter. This effort, however, was riddled with loopholes and ended with negligible results when the dairy operators simply rebuilt their herds by adding fresh cows.
In 1983, a sympathetic Congress devised another solution. Cows weren’t the problem, the elected officials decided, not even the modern supercharged cow. The problem was the consumer, who had caused this whole surplus problem to start with. The people simply weren’t drinking enough milk, so Congress created a system to boost the consumption of dairy products. (The law was actually called the Dairy and Tobacco Adjustment Act, since it also offered some aid and comfort to the cigarette industry.) Under this plan, the federal government allowed a special assessment to be levied on every milk producer in the country, with the money to be spent on marketing schemes that were aimed at making milk and cheese more alluring.
This left only one question: Why would people who shun fatty milk eat more fatty cheese?
The answer, in part, is because they had no choice. There is no nonfat cheese worth eating, at least nothing that comes close to the real thing. The dairy industry has put some effort into finding a way to make low-fat cheese as attractive as low-fat milk, but by and large the taste and texture of these fat-stripped cheeses is appalling. As a result, more than 90 percent of the cheese sold today remains full fat.
There is another reason, however, why people who shun whole milk will devour a full-fat cheese. Cheese has something going for it that whole milk does not: It is not as readily identified as a fatty food. True, cheese is loaded with fat, especially with saturated fat, the kind that is linked to heart disease. It has much less of the other kind of fat, unsaturated, that nutritionists have increasingly come to view as a good fat. Better sources of this good fat are oils like canola, olive, and safflower. But in one of the great perversions of nutritional science, the bad fat, saturated, doesn’t look or feel like fat. It remains solid at room temperature, where it locks up with the protein molecules and hides from view.
Not everyone in the country is worried about fat, of course. There are many people who drink whole milk and eat cheese and eat it in huge quantities, enjoying it for its unique flavors and velvety mouthfeel. I met one such person in the winter of 2010, and his affection for cheese was a marvel to see. His name is Ulfert Broockmann, and he’s a German-born cheese expert who spent forty-seven years as a technician in the dairy industry. He did two five-year stints with Kraft, ending in 1984, though there is no love lost between him and the company. He said he won a substantial legal settlement from Kraft after being fired, which he attributed to his disgruntlement with the company’s turn toward speedier cheese production. He disliked especially the increased use of enzymes to replace the aging process.
“They made everything cheaper,” he said during my visit to his home in Libertyville, Illinois, just twenty miles from the company’s headquarters. “It’s a shame.”
As we talked cheese at his dining room table, I asked to see his larder. One entire shelf of his refrigerator was devoted to cheese. He had cheddar and jack, blue and Gorgonzola, Brie, Camembert, and Swiss, neatly arranged on ceramic plates. I started salivating, but eating cheese in the Broockmann household requires time and discipline. It can’t be rushed. Before he eats any cheese, he told me, he takes it out of the fridge and sets it on the counter to warm up to room temperature, which brings out the flavors and tang. For a man in his early seventies, Broockmann was impressively fit, tall, and slim, still capable of 100-mile rides on his bike, and he is unconcerned about the fat in his food. In fact, he credits his good health to a diet that is heavy on cheese.
“I eat it in the morning, with bread,” he told me. “It’s a European-type breakfast. We set out four or five types, with butter. And I eat it at night, with a glass of wine.” None of the cheese he buys, not an ounce, is made by Kraft. He said that he can taste high amounts of enzymes, and he prefers artisanal brands that still rely on eighteen months or more of aging.
For all his love of cheese, however, Broockmann’s ways with the stuff were not going to fix the dairy industry’s problem of having too much milk and milkfat. He is way too particular about what he considers cheese and far too methodical in how he eats it. To triple the per capita consumption to 33 pounds, cheese would have to be eaten much faster, in newer, more convenient ways, and in much looser formulations. It wasn’t long after Broockmann left Kraft that officials there got to work on a more realistic solution to the milkfat mountain.
I
n the early stages of its quest to make cheese more convenient to eat, Kraft stumbled badly. The company’s cheese division managers started with one of their biggest brands, Philadelphia Cream Cheese. The idea was that busy people would use cream cheese more readily if it was sold not in its famous foil-wrapped blocks but pre-sliced and -wrapped in 1.2-ounce portions. In May 1989, the company
made three hundred thousand
pounds of sliced cream cheese and shipped it to test markets in upstate New York and Kansas City. Kraft’s cheese division had predicted a jump in annual sales of $61 million and 27 million pounds of additional cheese being eaten, explaining its reasoning in an internal memo that was distributed that summer to other company officials. Cream cheese in brick form was being used mainly on bagels and toast, and only for breakfast. The new sliced version would extend that reach into lunch and dinner, with lots of new recipes made easier by the handiness of the slices.
“The introduction of new forms of cream cheese drives cream cheese consumption,” the memo said. “Usage of cream cheese during lunch and dinner occasions represents a significant opportunity for greater cream cheese consumption.”
The slices, however, flopped. Consumers were put off by the whole concept; in this case, Kraft determined that the added convenience didn’t compensate for the pleasure people took in taking a knife to the brick themselves.
Fortunately for Kraft, the company had recently been purchased by Philip Morris, and its top lieutenant, Geoffrey Bible, had just arrived at Kraft headquarters in 2000 when the disappointing data came in, marking the cream cheese venture as a failure. He did not hold back in dispensing guidance to the cheese managers. To come up with winners, he reminded them, one has to think long and hard about just what it is people like.
“Now, I don’t mean to pick on Philadelphia Cream Cheese, because it’s a shining star in our product crown,” Bible said in one meeting. “But here’s an example of what happens when you take your eye off the customer and pursue an interesting technology too far without validating it first, with consumer input. We figured out how to create a cream cheese slice and put it on the shelf. It was a very impressive technological accomplishment. The question was did it really address a need? Sure, we were the only people in the world who could do it. Unfortunately, we were also apparently the only people in the world who cared. No one bought it. You know what we found out too late about consumers and their cream cheese? They’d rather spread it themselves! It’s fun! The great thing about cream
cheese is the wretched excess of how much you can glom onto your bagel in the morning. It turns out involvement is part of consumer need when it comes to cream cheese.”
The cheese managers took Bible’s words to heart. Cream cheese was no Oreo cookie, but it could be fun, too. They also saw no reason that they couldn’t adopt the marketing strategy deployed by that other great sugary product, Coke. If Coca-Cola could get people to drink more Coke by targeting those who already drank a lot, why couldn’t Kraft do the same with cheese? The managers even adopted Coke’s language, referring to cheese lovers as “heavy users.” To target them, they produced a new line of flavored cheese spreads called Kraft Crockery that hit on both these themes. “The fun is spreading,” promised the advertising.
In an internal memo on tactics, the cheese managers pulled back the curtain on their strategy. “These products will be targeted to people who snack on cheese, primarily heavy cheese users,” it said.
“Media selection will be skewed to female principal shoppers who are heavy processed cheese users, representing 67 percent of total processed cheese volume. The copy strategy positions Crockery as a whole new way to add fun, exciting new cheese tastes to any food.”
As sales of the Crockery line boomed, Kraft realized something else about cheese that made it every bit as attractive as sugary food, if not more so. People have their limits on sweetness. They can take only so much sugar in their food, and thereafter their liking—and sales—will drop. This is the famous bliss point that food scientists study and parse. But cheese is different. Cheese has fat, and as Adam Drewnowski in Seattle and other food scientists had discovered, the more fat in our food, the better we like it. This meant that cheese could be added to other food products without any worries that people would walk away. To the contrary, the added fat could be counted upon to make them more attractive.
Much of Kraft’s early efforts in this arena focused on the company’s famous Macaroni & Cheese. Known internally as “the Blue Box,” it sold for a mere $1.19 and was a stalwart seller. But it was the eighteen new versions—most of them featuring added cheese—that would push the Blue
Box into the club of elite mega-brands, with sales of $300 million a year. The lineup included Potatoes & Cheese, Pasta & Cheese, and Rice & Cheese, with each of the broad categories sliced into several subtypes, like Cheddar Broccoli, Cheddar Chicken, Cheddar Pilaf, and Three Cheese. In their strategy memos on this move, the cheese managers referred to the Blue Box “leveraging its cheesiest point of difference.”
Kraft used this same strategy to increase consumption of its packaged, just-add-meat dinners like Velveeta Cheesy Skillets, which featured added cheese and were spun off into varieties like Ultimate Cheeseburger Mac, Nacho Supreme, and Zesty BBQ Chicken. They sold for a mere $2.39, but contained up to fifteen grams of saturated fat per package—a fat load that soared even higher when the recipe was completed by adding the mixture to ground beef. In the television ad campaign for these meal supplements, a strapping and handsome blacksmith dips a ladle into a pot of melted yellow cheese and brings the thick velvety goo up slowly while singing, in baritone, “Liquid Go-o-o-o-o-o-o-ld.”
Kraft’s use of added cheese as a lure in its packaged foods, of course, sent other food manufacturers scrambling to keep up. As an analytical firm called Packaged Facts noted in tracking this gold rush,
“There exists an opportunity for cheese ingredients in every aisle of the supermarket.” Walmart, for one, started selling its own brand of soup called Loaded Baked Potato that included processed cheddar cheese, and contained 9 grams of saturated fat—more than half of a day’s recommended maximum. Its affiliate, Sam’s Club, came up with a four-cheese artichoke dip. Nestlé, through its Stouffer’s brand of ready-to-eat packaged foods, brought out a frozen Three Cheese & Ham Panini and added cheddar to its Grilled Mesquite-Style Chicken.
One of the biggest free-for-alls took place in the freezer aisle. Frozen pizza used to be made with the bare minimum amount of cheese, as manufacturers were always looking for ways to save on ingredient costs. But the new math on cheese turned that upside down. The more cheese that was added, the better the pizzas sold, and the better they sold, the more Kraft could charge. Kraft and other companies started turning out frozen pizza
that boasted two, three, and four different cheeses, including even a tangy blue, and then they tucked more cheese into the crust. By 2009, frozen pizza had reached $4 billion in annual sales, with Kraft alone pulling in $1.6 billion from DiGiorno and its other brands, and there appeared to be no end in sight.
For years, Kraft had been keeping an eye on the public’s concern about the health implications of eating too many fatty foods. In a confidential strategic plan the company drew up in 1993, Kraft cited this nutritional worry first among the topmost “weaknesses” in the company’s cheese-filled lineup of products. It possessed, Kraft lamented, “a portfolio weighted towards businesses in categories that lack vitality because they are out of consumer favor due to ingredient and/or fat orientation.”
And yet, the food industry’s rush to embrace cheese—the fattest of all fat-based products—as a way to increase sales put Kraft’s cheese division on a tear. In this same strategic plan, Kraft said,
“Competition is intensifying across all categories. Spending is up. Healthy Choice (Con Agra) has entered Cheese. Competitive strategies are converging, with all Peers trying to establish category leadership positions. Peer leaders are reportedly targeting 3+ percent annual growth volume. The implications for Kraft USDA is that we need to leverage our scale and do ‘faster, better, and more completely’ versus the competition.” By 1995, Kraft was reporting to Philip Morris officials that it had achieved a string of “strong years,” hitting $5 billion in revenue and two billion pounds in cheese.
With the industry working so hard to turn cheese into an ingredient to tuck away in other foods, the consumption rates climbed precipitously, with hardly anyone noticing. Even consumer advocates, in their efforts to steer Americans toward healthier diets, overlooked cheese. The Department of Agriculture, however, tracks all of the basic staples that Americans eat, and it has
kept a close watch on cheese. And nearly every year, the numbers in its tally set a record. Where Americans, on average, were eating 11 pounds of cheese a year in 1970, they were up to 18 pounds in 1980, 25 pounds by 1990, 30 pounds in 2000, and 33 pounds by 2007, when the rates dipped in the recession before resuming their surge.
Remarkably, the growth in cheese has mirrored the plunge in whole milk, which American consumers identified—mistakenly, it turned out—as the primary source of the saturated fat they wanted to avoid. Milk drinking went from 25 gallons per person in 1970 to the current average of six. For the country as a whole, trading cheese for milk has been a poor bargain indeed. The net gain per person at the current rates is roughly 200 grams of saturated fat a year. Few people, of course, realized how much more cheese they were eating. But by 2010, the floodgates for cheese—as an ingredient—were opened wide.