My wife and I have a little tradition. Once a week, we make nachos and fill out crossword puzzles together.
For years, our weekly shopping list included at least one large bag of Haolam grated mozzarella cheese.
Until it all changed and there was only one option on the shelves: Nature’s Best.
Nature’s Best. For quite some time now, this new dairy brand is the only company with hard cheeses in the aisles of most kosher stores in Montreal.
Expectedly and understandably, the community wants to know what’s going on. Rumours have been circling Facebook as Jewish Montrealers question and discuss this new phenomenon. Curious about what happened to my favorite snack, I too set out to get to the bottom of the story and to uncover the truth about the cheese situation.
I sat down with Rabbi Saul Emanuel of the MK for a candid and open conversation, and followed up with a face to face meeting with Ari Lipsey, one of the business owners of Nature’s Best. I also reached out to Mehadrin milk in an effort to get their input but did not receive a response.
What I found out what informative, educational, and a little controversial and I’m happy to share it with you all.
Milk wars
For years, Mehadrin was the only milk available to Chalav Yisrael keeping Canadians. Then, in 2014, a competitor emerged. Based out of Ontario, Nature’s Farm brought the price of milk down for the entire Canadian community by about 20%, or a dollar per 2-litre carton.
Their milk was distributed in stores across Canada, but it was difficult to break into the kosher stores in Montreal. This is due to a number of factors but perhaps mostly due to the fact that it’s easy to say no to milk from Ontario if you have a local milk producer.
The fact was, Nature’s Best had no leverage to ensure that stores in Montreal would sell their milk. They decided that the best way to be successful would be to produce domestic dairy products such as shredded mozzarella cheese.
The Dairy Board
Now, suppose you are a farmer and a cheese producer orders 40,000 litres of milk at an agreed price of ten dollars. After milking the cows, the cheese producer doubles back, and informs you that he doesn’t really need it now. He offers you a new price, five dollars, or you can keep your milk.
This obviously puts the farmer in a terrible predicament. The milk is ready to go and must be moved. He doesn’t have time to run around and find a buyer to purchase at full price. He has no choice; he must sell at the lower price. Farms used to go broke for this reason.
Our neighbours in the United States solved this dilemma by using tax dollars to subsidize dairy farmers (roughly $4 billion annually). Canada’s response was to create a Supply Management System, which means that they established Control Boards for all dairy, eggs, chickens, turkeys and other perishable foods.
These boards control the price of the products and restrict their supply by limiting the amount produced in Canada. They also inhibit imports with massive tariffs. Thus companies such as Nature’s Best never purchase milk directly from the farmer. They are forced to buy from the Dairy Board, who handles everything from start to finish.
This is why milk, cheese, chicken and eggs, kosher or not, retail for cheaper in the United States. Thanks to government subsidies, those products don’t cost as much in the stores as they do here in Canada. Essentially, however, Americans make up for it when they pay taxes.
Here in Canada, consumers only pay for their dairy once, but at what critics estimate to be 38% to 300% higher retail prices than most other countries.
Supplementary Quota
In the event that a product does not exist in Canada, the government allows companies to import it, duty free, and sell it in our stores. This is called a Supplementary Quota.
However, should a Canadian manufacturer start producing enough volume of said item, the government will be under the legal obligation to apply the marketing board rules and “shut the border” in order to protect the Canadian producer. They do this by raising tariffs astronomically on similar imported products. This is to ensure that the Canadian domestic market is not obliterated by the subsidized US market.
Chalav Yisrael is a niche market and many Chalav Yisrael products cannot be obtained from Canadian manufacturers. Because these items are not being produced in Canada, Canadian consumers are able to purchase certain Chalav Yisrael dairy goods at prices comparable to the United States.
Let’s take an example. In the US, Chalav Yisrael cottage cheese is subsidized by the government and costs $3.99 a tub for the consumer. In Canada, Mehadrin produces cottage cheese and therefore, the cost of bringing in cottage cheese is through the roof and not an option for import. The price of the same size, Canadian-made, container, factoring in the extra Cholov Yisroel costs plus the Dairy Board controlled price, is $7.99.
This begs the question: If this is the case, why can I sometimes find American tubs of cottage cheese on the shelves of Canadian stores?
“The reason is because Mehadrin can tell the government that they’re not making enough to meet the demand and then they can import from the US,” explained Lipsey. “Once we start producing cottage cheese, the government will come to us and tell us that Mehadrin says they don’t have enough cottage cheese. They’ll ask us, ‘What’s your volume?’ We’ll give them our volume and that will be that. And the price of cottage cheese will go down just like it did with milk. Because competition is good for the consumer.”
Are you following so far? Good, let’s complicate things further.
Tariff Rate Quotas
For those who still want to import American cheese at a reasonable price, there is another option: Leasing Tariff Rate Quotas (TRQ), when they are available. When Canada’s Supply Management System was introduced, it was grandfathered in. This means that those who were already importing were given a quota of allowable imports to avoid damaging their existing business. That quota was given historically and there is a limited number of quotas.
Companies that are not using their extra quota, lease or sell it on the market. “Technically, you can lease quota and use it to bring in American cheese,” said Lipsey. “This is what was done previously in 2008 by importers (Editor’s note: referring to Noshers). When we did our business plan, we looked at the market price for leased quota and surmised that the cost would translate to about 75 cents more per packet of sliced cheese, $2 more per eight ounce bag of shredded cheese,and an additional $4 for a two pound bag. Quota is limited so large imports are impossible. However, there has been a major increase in European quota thanks to the CETA agreement.”
Kashering the plant
Nature’s Best products are certified kosher by the MK, the Belz Hechsher, and Rabbi Ochs. When they initially contacted the MK, they were provided with a detailed list of actions to take in order to make their plant Kosher.
“We have an obligation to give certification to Canadian companies who abide by the conditions of our Hechsher,” said Rabbi Saul Emanuel. “We are here to provide for the community, wherever it may be in Canada. We are an independent Kashruth supervising agency, run by 10 Rabbanim and an office staff. We are not a business partner, and we have nothing to do with government policy.”
Last April, Nature’s Best started working on cheese production. “We didn’t produce our first brick of cheese until July,” admitted Lipsey. “We had a lot of challenges Kashering our plant up to the level of MK Mehadrin but we managed to do it. I believe we have the most kosher plant in North America, but it took four months.”
For example, when it came to boiling the massive vat at 212, Lipsey and his partner Joe Bitton had to ensure the boiling water wouldn’t warp the metal. Rabbi Berel Bell and Rabbi Wolf Ber Lerner visited at different times to Kasher the plant.
“When Rabbi Lerner was there, everything started up and the pasteurizer wasn’t working,” recalled Lipsey. “He said to me, say Tehillim. I said Tehillim and miraculously the pasteurizer went on.”
The plant does their own production using Chalav Yisrael cultures and milk, which means no rekashering, double Kashering or exceptions.
Bagging Problems
Chalav Yisrael consumers are used to the taste of cheese which contains only 21% fat but quality cheese is not diluted. Nature’s Best worked hard to ensure that their Havarti is a full fat Havarti. Their Monterey Jacks and Goudas are also both full fat, made in their purest form.
After performing three test runs with the Chalav Yisrael cultures to ensure their product tasted like Canadian cheese, Nature’s Best successfully started selling cheese by the block to pizza stores and restaurants.
The next step, packaging for the individual consumer, incurred some temporary challenges.
Their vision was a natural cheese, without cellulose. Cellulose chemically helps stop clumping and deters mold. This problem can be fixed mechanically, using nitrogen pockets. In order to obtain this magic machine, the company had to show sales, and so they decided to shred and package their cheese in large bags.
Delays followed the arrival of these bags to the stores, one month turned into three, and still no nitrogen machine. “It went on and on, and there were some problems with those bags,” Lipsey admitted. “Some products had a shorter shelf life than anticipated, and the cheese, while tasting good, had some issues with its dryness.”
Eventually the machine was delivered and they were able to introduce their three pack. “The advantage of the three pack is that if there’s an issue with mold in one pack, which occasionally happens with all shredded cheeses, the other two packs aren’t affected. Before, with any large bag, if it started to mold, you had to throw out the whole bag. That’s no longer an issue.”
Today, Nature’s Best cheese is used by 99% of kosher restaurants across Canada. Its products line the aisles of stores in every Canadian city.
And while it took some getting used to, the nachos at the Hershcovich home are more delicious than ever, thanks to their high quality, full flavour cheese.
Q. What are you planning on making next?
There’s been a lot of complaints about the shelf life of heavy cream and that’s what we’re working on. We’re going to start with fresh mozzarella too, as there seems to be a general supply issue from the United States. We’re also looking to get into yogurts because we have a plant that makes it already and sells it to the non-kosher market. We would just have to Kasher it and start using Chalav Yisrael cultures.
We’re going to have as many dairy products as possible so that no one can say that they can’t buy from us because then they won’t be able to get x, y and z. Choice is good for the consumer. But we would make it more as a protective measure rather than to raise the duties at the border.
Some customers have voiced concern that we are not a full-service dairy provider. Our vision is to build a full Chalav Yisrael production line as robust and as high quality as what’s available to other Canadian consumers, kosher or not. Our goal is to get calls asking specifically for the cheese that we make.
Q. There have been complaints on social media about the smell of the cheese. Is that something you’re working to fix or an isolated problem?
I think what happened is that there was probably a puncture in the pouch. People sometimes are rough with it, bang it, and don’t notice that the seal is opened. Because it’s a natural cheese and there’s no preservative in it, if it sits for a few days, you can get the smell.
We’re trying to make the seal stronger, but that’s also going to have to be an adjustment for the consumer. We’re looking at putting an adhesive. The seals currently work as follows: The air is removed and nitrogen is placed inside instead, which works as a vacuum pack.
Q. Have you considered vacuum packing the cheese tightly without air?
Vacuum packing shouldn’t be that way. They should be using gas flush. It’s more expensive, but it’s better because otherwise when you vacuum pack it tightly and then open it, it can crush the product.
Look at non kosher lettuce, for example. It’s all gas flushed. It’s an industry standard for everything. For potato chips, for anything you buy.
Q. Another complaint has been the fact that it doesn’t melt like other Chalav Yisrael cheese. Is there a reason for this?
You can make a meltier cheese if you add moisture to it, but the problem is that you’re effectively watering it down. You’re watering down the taste. It’ll melt and goop but lack flavour. We wanted to make a Chalav Yisrael cheese that mirrored proper Canadian cheese. We remove the moisture in order to get the full flavour of the cheese. That’s why people who have tasted Chalav Stam and Chalav Yisrael like our product. We’re not diluting it. It’s like having a fine dry wine after growing up with a sweet concord like Manischewitz.
However, we are looking at doing a brand with more moisture, and have already tested it in some restaurants with great success.
Q. What has been the response to your cheese in pizza stores and restaurants?
As of today, the vast majority of our market is very happy with our cheese and we are working with the few who aren’t. Our main goal is to produce high quality, full flavour cheese and we are always working to improve our product. We constantly take feedback, and tailor our foodservice cheese to their needs. We just launched feta and the response has been great. At this stage we are 99% of the Chalav Yisrael cheese you’re going to eat in restaurants across Canada.
Q. What would you tell a customer who asks why your cheese isn’t in their local store?
Tell your providers to order. We’re not maxed out in capacity in milk production. And remember, you will benefit even if you don’t buy it.
