Salerno Dairy

Canada wants to make sure everyone gets their fare share of milk.

To do this, the government has established a quota system for businesses that rely on dairy products.

This may be the fairest way to apportion a limited resource, but it does create quite the challenge for food produces that primarily rely on dairy products. In particular, cheese makers have to make difficult decisions about how to manage their milk quota.

“To stay in business in Canada you have to be as efficient as possible,” says Robin Ghosh, general manager of Salerno Dairy, based in Hamilton, Ontario. “This is more important here because Canada is on a quota system that determines how much milk processors such as us can get.”

As he explains, milk comes from the dairy farmers located in Ontario where the price per litre is fixed for the year. Ghosh says that the price can wax and wane from year to year, but even in a good year, the price for a litre of milk is among the highest in the world.

“Something needs to be done in this area,” he stresses.

The company can increase the milk it receives by bringing it in from the U.S., but only if the resulting products (cheese) are destined for markets in the U.S., says Ghosh.

“We are not so much in the U.S., but we are adapting to the export markets,” he says. “Canada also sets a quota for export, which means we can receive a certain amount of milk to produce cheese for export.”

However, at the end of the day, he adds, “You have to figure out how, with fixed materials, you are going to grow.”

Growth within his industry says Ghosh is a combination of finding as much efficiency within the production process as is possible while seeking out value added products with a higher profit margin.

For a mid-size company that makes a variety of cheeses, this means looking at the totality of the organization and leveraging all of its assets.

“The structure of the company is that it is purely a family-owned business that is still owned by the original Italian family that started it in 1959” says Ghosh. “Currently, the business is being run by the second generation and the third generation is just now coming into the business. They will be the future of the company’s management structure.”

However, while the third generation will provide a consistent vision of the company and their collective cheese making experience, with them will come a new generation of employees with expanded skill sets.

“Due to the use of new technology in this business, we are signing on a lot of new people in order to gather that input,” says Ghosh. “For the most part, these are people that are experienced technicians or recent college graduates.

“We are exclusively in the dairy business, so the background of our new employees at the university level ultimately has to come from that field of study - to bring some brains into the company. So far, the family has brought its experience, but the new folks are bringing new technological expertise and new ideas to our company, so that we can be better on the technical and business sides.”

Ghosh adds that the company’s family ownership and style of management is a definite asset when it comes to attracting and retaining good employees, as well as maintaining strong moral and motivation.

“Our company culture is different because it is a family-owned company,” he says. “The relationship between the owner and the employees is so much different and closer than you would commonly find in a corporate structure.

“People know each other well and everyone calls each other by their first name, even with the owners of the company. It is a bonding thing between the family and the people here, and because of this closeness we have a very low rate of turnover.”

As to the company’s products, Ghosh says Salerno only makes cheese, with its primary specialty being Italian cheeses.

“But we are also bringing other ethnic varieties of cheeses because Canada is a multicultural society and our products should reflect that,” he says.

For example, Ghosh says Salerno is producing cheeses in styles that reflect the tastes of those from the Middle East and India.

“The larger corporations either don’t want to cater to this market, or … with their high-speed lines, it takes too much to turn their line over to produce a number of specialty cheeses in terms of time and cost,” he says.

Salerno’s size allows quite a bit of flexibility, which includes the capacity to profitably cater to special orders from its customers.

“This is our growth area — customer service — and this is why we are successful today,” says Ghosh.

This flexibility is a significant reason why the company’s menu of offerings is more than a mile wide and an inch deep. The company makes cheeses within three distinct categories.

Within the soft cheese category Salerno makes ricotta, mascarpone, and cream cheese, among others.

Offerings in the semi-soft category include burrini, caciotte, mozzarella, monterey jack, and colby.

The hard/formed cheese category includes casata friulano, pepato, romano, and provolone.

The company also produces grated and shredded products and imported cheeses such as asiago, blue cheese, edam, feta, ementhal, monterey jack, colby, swiss, and others. The company also manufactures goat and sheep’s milk cheeses.

“Our mozzarella is the highest volume product,” says Ghosh. “A lot of companies will only make mozzarella and that’s it. They don’t offer any variety. We, on the other hand, are able to be broader than that.

“We are a niche market and the big companies don’t want to get into that. This is where we can compete, by offering a variety of high-quality specialty cheeses.”

The company also caters to those seeking low-fat alternatives.

“The company has a lot of flexibility to supply many customers, and we have the quality to keep them coming back,” says Ghosh.

In all, the company is able to produce approximately 3 million kilograms of cheese per year.

“Cheese making used to be an art, done by looking, by touching, by smelling the product as it was made,” says Ghosh. “Today, this is all done through the use of technology. It is taking away most of the art, and the science of it is playing a much larger role.”

Production is done via a continuous flow line that includes cheese vats, draining tables, cheese stretching machines (for Mozzarella), molding machine, salting machine, and packaging.

“The most important part of this process is pasteurization,” says Ghosh. “Anything we have to do has to be pasteurized.”

In France and much of Europe, there is a subset of cheeses known as raw cheese, which means they are not pasteurized. Many believe this gives the cheese a unique and superior flavor. However, these cheeses also come with a health risk, which has caused the U.S. to ban all raw cheese.

“We are allowed to make raw cheeses in Canada, but we don’t do that because it is very important not to confuse raw cheese with pasteurized cheese,” says Ghosh. “You have to avoid cross-contamination, which can be hard to control unless you segregate the plant.”

He adds that keeping all of the machinery up-to-date is important to making the process as efficient as possible.

“You can’t have a 20-year-old machine on the floor that is out of date, which is why we are continuously updating our equipment,” he says.

The actual supply chain for bringing milk into the facility, he adds, is run by the Dairy Farmers of Ontario, which is a professional group that aggregates milk from regional dairy farmers and acts as the distributor.

“We simply place a weekly order and they bring it to us,” says Ghosh.

Ghosh goes on to say that being an environmentally sound producer is important to the company.

“The cheese making process is a challenge due to the need to dispose of by-products such as whey,” he says. “To reduce the impact, Salerno has introduced new technologies such as Ultra-Filtration to produce a high valued product called Whey Protein Concentrate, which has many uses in the food industry. The company has also installed an onsite waste water treatment system to reduce the environmental impact on the city sewer system.”

Ghosh also says that Salerno Dairy Products Ltd. could not have succeeded to this point without the help and guidance from certain individuals and organizations especially Peter Gould and the Dairy Farmers of Ontario. He adds that the company also has excellent working relationships with both producers and processors in the Province of Ontario.