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Bel Brands USA Officially Opens New $144 Million Mini Babybel Cheese Plant In Brookings, SD
Brookings, SD—Bel Group executives from the US and Paris joined federal, state and local political leaders and other guests here last Friday for a ribbon-cutting ceremony for Bel’s new $144 million Mini Babybel facility.
The Brookings facility is the largest industrial capital expenditure in Bel Group’s history. Construction of the 170,000-square-foot facility on a 48-acre site began in July of 2012, and applies state-of-the-art and proprietary manufacturing processes developed in Bel’s Evron, France, facility.
This is Bel’s third US manufacturing facility; the other two are located in Leitchfield, KY, and Little Chute, WI.
Bel Brands USA, a subsidiary of Paris-based Bel Group, has already hired 215 new employees and is expected to have 250 hourly and salaried employees on staff by the end of this year.
Mini Babybel is a creamy, portable cheese; each piece is individually wrapped in its signature red wax and cellophane and comes in seven varieties.
Mini Babybel is sold in retail grocery, specialty and club stores in mesh multi-packs and is also now available in new single-serving units for convenience and drug store channels.
“Our Mini Babybel volumes have practically tripled over the
past five years. Last year, sales of Mini Babybel increased by 24 percent,” said Frederic Nalis, CEO of Bel Americas and president and CEO of Bel Brands USA.
“Today, Mini Babybel represents a third of our volumes,” Nalis continued. “We invested $144 million to build the new plant, which has a production capacity of more than 22 million pounds, or approximately 1.5 million Mini Babybel portions every day.”
The Brookings plant will use about 500,000 pounds of milk per day, which is being purchased through Dairy Farmers of America and Land O’Lakes.
“We invested $144 million to build the new plant, which has a production capacity of more than 22 million pounds, or approximately 1.5 million Mini Babybel portions every day.”
—Frederic Nalis, Bel Brands USA
In addition to the Brookings plant, Mini Babybel is produced in Bel’s Leitchfield, KY, plant, which is also the sole US production facility for The Laughing Cow cheese wedges. For the foreseeable future, Bel Brands USA will rely on production of Mini Babybel in Brookings and Leitchfield. Certain Mini Babybel products will also continue to be sourced from the facility in Evron, France.
“The inauguration of our third
plant in the United States is a historic event for the Group,” said Antoine Fievet, the Bel Group’s chairman and chief executive officer. “It incarnates our willingness to dare, which is one of our company values.
“We introduced Mini Babybel to the United States in 1979,” Fievet continued. “Since then, the brand has established itself as a healthy and fun snack to be eaten on the go, making it particularly well-suited to American eating habits.
“This new production site, which represents the largest industrial capital expenditure in our company’s history, is fully in line with our growth potential on the American continent,” Fievet added.
So why did Bel decide to build another US cheese plant? Mini Babybel sales have nearly tripled in the last six years, so sourcing Mini Babybel from France “was not really making a lot of sense,” Nalis noted in a presentation Tuesday at the 2014 ADPI Dairy Ingredient Seminar in Shell Beach, CA.
More specifically on the sales increases, Nalis said Mini Babybel sales in the US grew 29 percent in 2009, 25 percent in 2010, 24 percent in 2011, 3 percent in 2012 and 23 percent in 2013. The company expects double-digit growth again in 2014.
Why build its new cheese plant in South Dakota? The state has a solid milk industry that’s been growing “quite strongly” for the past 10 years, and continues to try to attract dairy farmers from states such as California to relocate to South Dakota, Nalis explained.
Also, South Dakota’s business climate is very good, and there is a quality workforce, both in terms of qualifications and work ethic, Nalis continued. A “great” incentive package was put together by not only the state of South Dakota
but also the city of Brookings.
Brookings is also home to South Dakota State University, and eight members from Bel’s management are SDSU graduates. Bel already has interns from SDSU working at its plant and has given research projects to SDSU students.
As far as Bel’s prospects in the US are concerned, the company expects average growth rates of around 7.5 percent per annum, which is far ahead of projected cheese market growth in the US, Nalis said.
For Mini Babybel, this means Bel will have to open its second line in Brookings, doubling the plant’s capacity, before 2020. That’s another 24 million pounds of annual cheese capacity and another 500,000 pounds of milk needed every day, Nalis pointed out.
Bel Today And Tomorrow
Bel is the third player worldwide in branded cheese, trailing only Lactalis and Kraft Foods, Nalis said.
Four of Bel’s core brands rank among the world’s 12 leading cheese brands, Nalis said. That includes Laughing Cow (La Vache Qui Rit in French), which ranks fourth behind Kraft, Philadelphia, and President; Babybel, which ranks ninth; Leerdammer, which ranks 11th; and Kiri, which ranks 12th. Bel’s Boursin brand ranks 21st.
Bel produced 970 million pounds of cheese in 2013, and will “probably” reach a billion pounds this year, Nalis said. Last year, the company produced some 16 billion individual portions of cheese, representing 57 percent of Bel Group’s sales. Bel cheese is sold in more than 130 countries worldwide.
Western Europe accounts for 40 percent of Bel’s sales, while northeast Europe accounts for 22 percent of sales, the Americas and the Asia-Pacific region account for 15 percent, the Near and Middle East for 13 percent, and Africa for 10 percent, Nalis said.
Bel posted net sales of $3.5 billion last year, up 2.7 percent.
Nalis explained that Bel focuses most of its efforts on three segments of the cheese business that are growth markets for the company: spreads, such as Laughing Cow wedges and Boursin; natural (as opposed to processed) slices, such as Leerdammer and Bonbel; and snacks, such as Mini Babybel.
Bel’s brands “travel well” around the world; the company’s five core brands are strongest in five different countries:
The biggest market for Laughing Cow is Algeria; Mini Babybel is strongest in the US; Leerdammer’s biggest market is Germany; Kiri’s biggest market is Saudi Arabia; Boursin’s biggest market is France.
Bel Group In The US Since 1970
The Bel Group initially came to the US in 1970, when it established its Bel USA subsidiary in New York City. In 1994, the company purchased Price’s, a pimiento cheese spread brand.
Two years later, Bel purchased a Little Chute, WI-based company with a portfolio of regional cheese spread brands, including Kaukauna, Merkts and Wispride.
In 2007, the Bel Group decided to focus its growth efforts on the US and in particular on two core brands: The Laughing Cow and Mini Babybel. Two years later, after acquiring the Boursin brand from Unilever, Bel decided to accelerate Boursin’s development in North America.