www.registerguard.com | © The Register-Guard, Eugene, Oregon
January 12, 2004
Cheese only, if you please: Heavy-hitting cheese maker goes to bat for a name that tens of thousands simply call "home"
By Winston Ross
The Register-Guard
TILLAMOOK - Long before Wal-Mart ruled retail, before Rupert Murdoch bought broadcast media, 10 dairy farmers in the lush green pastures of the Tillamook Valley decided that bigger was better.
They threw in $25 per factory and in 1909 formed the Tillamook County Creamery Association, makers of the now world-famous Tillamook Cheese.
In the past decade, the company has gone from a well-known regional brand to a cheese behemoth, with lucrative contracts in Costco and Wal-Mart stores. In 2001, the company doubled in size by adding a factory in Eastern Oregon. Last year, the creamery boasted $270 million in sales and produced 300,000 pounds of cheese a day. Its 2-pound block of cheddar is the most popular natural branded cheese in America.
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 "Cheese well worth stealing" is the theme of the creamery's recent advertising campaign, a sign of its brand power. |
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For decades, that's been a benefit to the community. As the rest of the coast has struggled with declining timber revenues, Tillamook has been buoyed by an insatiable interest in cheese. Up to a million visitors tour the 85,000-square-foot cheese factory each year, pumping untold quantities of cash into the local economy.
Cheese is important to Oregonians: According to the Oregon Dairy Commission, we consume a third more per capita than the national average.
But lately, some residents along the coast are starting to wonder whether the company has let all this success go to its head.
After 20 years of distributing their products together, owners of the Tillamook Country Smoker filed a federal lawsuit against the creamery in May to pre-empt the cheese maker's attempt to force the meat curer to change its name.
Last week the Bandon City Council took its own jab at the creamery's trademark tactics. When the creamery bought Bandon Cheese in 2000, it acquired the name as a federally registered trademark, and has told some businesses who use "Bandon" that they might have to find a new name. That prompted the city to ask the state attorney general to investigate the company's own use of the moniker - given that there's not a curd of cheese now made in Bandon.
And along the way, several lower-profile, quiet battles of the brands have taken shape - though in most cases, companies have simply bowed to the creamery's demands.
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 Tillamook Creamery receives milk from dairy farmers in the 1890s. At the time of Tillamook County Creamery Association's 1909 founding, 16 large factories and three private farm factories operated in the county's green pastures. The company is fighting to control use of the name. Photo: Tillamook County Creamery Association |
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"We're trying to survive," says Jim McMullen, president and chief executive officer. "Just like any other business.
"We don't see that we have a choice."
Critics say the creamery has gone far past protecting itself, and is pushing around small-business owners so that it can sell other products under the Tillamook name. To argue that only the creamery is allowed to use the name, even if narrowed just to food products, means to many that the cheese makers think they own the town.
"I think it's terrible," said Leonard "Bud" Gienger, a dairy farmer, former chairman of the creamery's board of directors and part owner of the Tillamook Country Smoker. "They're getting the image of a big bully.
"I think it will hurt (creamery) sales."
A long history
In 1918, the creamery developed its first advertising campaign and became the first community in the nation to market cheese under a brand name, according to Archie Satterfield's book "The Tillamook Way," on sale at the factory.
Two years later, the company tried to patent its name, but the application was rejected, Satterfield wrote. So in 1921, the creamery registered a federal trademark.
In the decades that followed, the small cheese factories around it joined the creamery, and the farmer's cooperative grew steadily, in size and notoriety. Today there are 146 members, each with an average of 200 cows.
The only real bump in the road came in the 1960s, when the farmers locked horns over a disagreement about how to market surplus milk. The dispute, which led to actual fisticuffs, split the co-op into two groups - both of which continued to use the same brand name to make cheese.
In 1967, the original group sued the castoffs, in an attempt to force them to stop using the Tillamook name, and lost. But the point became moot when the creamery bought out its competitor for $3.5 million that same year.
Despite simmering tempers, the creamery continued to flourish, reaping tremendous rewards for its community. The creamery paid out $12 million in wages to Tillamook employees last year and $80 million in milk receipts for Tillamook County, as its second largest employer, with some 470 people drawing a paycheck. The creamery has returned hundreds of thousands of dollars in profits to the community through donations. It fenced more than 90 miles of streamsides in Tillamook to keep cows from damaging riparian areas, and it planted more than 400,000 native trees and shrubs to cool local streams and rivers.
In the 1990s, the company reached a cattle guard: As big box retailers such as Costco and Wal-Mart began to dominate the marketplace, it became clear that the creamery was going to have to go big or go home.
"Everybody's trying to get enough market share so they can't get squeezed out," McMullen says. "We're not any different than Coke, Pepsi, Hershey's or Kraft."
The creamery signed contracts with Costco and Wal-Mart, which required a huge expansion. In 2001, the company opened a second facility, in Boardman. Environmental regulations meant farmers couldn't squeeze more cows into Tillamook County, so much of the company's less-specialized cheese, such as medium cheddar and colby jack, are made in Eastern Oregon.
McMullen bristles at the notion that making Bandon or Tillamook Cheese in Boardman is deceptive. Hershey doesn't make all its chocolate in Pennsylvania and Philadelphia Cream Cheese was never made in Philly, he says.
Branding's importance
As the company doubled in size and garnered prime cooler space in most of the nation's supermarkets, the importance of brands became a hot topic, and not just at the creamery. The International Dairy Deli Bakery Association, of which the creamery is a member, published a book in 2002 called "Battle of the Brands," the result of a study of 900 consumers and 200 retailers nationwide.
Nearly a third of consumers surveyed said brand is what first gets their attention in the dairy department - above price. The group also cited a 2002 study by the Grocery Manufacturers of America that found that shoppers liked new products made by brands they already knew.
Throughout the '90s, as the focus on branding grew more intense, McMullen said, company officials discovered the Tillamook name in use elsewhere in America. That's not just a problem because someone else is profiting off the name, he notes. What if there's a recall of a product named Tillamook? It could be associated with all products by the same name.
"Brands stand for something," McMullen says. "Something you can trust, derive value from."
The company had to take a harder look at the sanctity of its brand, McMullen said. So in 1995, the creamery created its first brand management policy, which outlined procedures for dealing with other companies that want to use the name.
It also resulted in 130 letters sent to businesses in the past eight years, most of which make food products and all of which serve customers outside of Tillamook County. Businesses that stay in Tillamook aren't a problem, he said. It's in Boston and Texas where a consumer might get confused.
"Our only concern is other food products," said dairy farmer Norman Martin, a co-op member. "We don't have a problem with the Tillamook Ford Motor Company."
Business gripes
But businesses in Tillamook and Bandon do have a problem with being asked to change a name that they picked because it's where they live.
Last fall, Monika Zweifel scrapped her business name, "Chokes of Tillamook," despite the fact that all her artichokes are grown locally. Now she's "Oregon Coastal Flowers and Bulbs" - she sells other products as well. Zweifel simply didn't have the resources to fight the creamery, she said.
Nor did Bay City, which had pondered selling bottled water earlier this year under the name "Tillamook Mist" - until a sternly worded letter arrived from the creamery.
"Tillamook is the name of this county and has been its name for almost 150 years," wrote a "highly offended" Mayor Jim Cole to the creamery in May. "It is the name of Tillamook City, it is the name of Tillamook Bay and it is the name of Tillamook River. Tillamook is utilized in the name of several columns of businesses in the telephone book.
"The city hopes that the creamery will re-evaluate its position."
Nope, says McMullen. Besides the country smoker, the creamery is the only federally registered trademark in the country that uses the name Tillamook. While he declined to answer why the creamery thinks the smoker's trademark should be revoked, he reiterated that only the cheese plant should be allowed to use the name. The brand is too important, he says.
"We've even had to tell farmers not to put cheese stickers on their manure trucks," he said, so people won't associate cheese with manure. "We got the name first; that's the game. We didn't write the rules.
"This community wouldn't be what it is without the dairy industry."
Some folks in Tillamook say the dispute is a sad one. Floyd Bodyfelt, a retired professor emeritus from Oregon State University, worked in the creamery as a boy. For the past several decades, he's been an outside consultant for the company, through OSU. While a fan of the cheese maker's consistent quality, Bodyfelt finds the trademark debate "irritating," "arrogant" and "unfair" - but unlikely to hurt the company's bottom line.
"It could cause problems locally, but I doubt whether it has any implications nationally or internationally," he said.
Pete Sutton, who ran the company for 16 years during the '70s and '80s, says he never worried about other companies hurting the Tillamook brand.
"I don't know how you can get a trademark on a community name," he said. "It's just regrettable."
McMullen hopes the community can come to terms with the trademark disputes. He says he probably should have gone to Bandon personally to meet with city officials about Bandon Cheese. And, after a December news story about the flap, the company delivered 1,000 pounds of cheese last week to a Bandon Food Bank, which had complained that the company cut it off from discounts after buying Bandon Cheese.
Before the Bandon City Council's terse resolution, McMullen also invited the city's elected officials to visit the factory and have a face-to-face meeting.
He didn't get a reply.
Winston Ross can be reached at (541) 902-9030 or rgcoast@oregonfast.net.
Related:
Relationship sours between creamery, meat producer
