Smoked Gouda producer in Blue Mounds sold

Olga Hernandez, seen here in 2012, hangs a 6-pound link of Gouda cheese, part of a batch destined for the smoker, at Dairyfood USA in Blue Mounds. The company, the largest producer of smoked Gouda in the country, has been purchased by Borgman Capital of Milwaukee, which plans to merge the company with Gilman Cheese.

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A Dane County company that is the largest supplier of smoked Gouda in the country has been sold.

Borgman Capital, a Milwaukee-based private equity firm, has announced it has purchased Dairyfood USA and will merge the Blue Mounds company with Gilman Cheese Corp. The move will allow Gilman Cheese, located in Taylor County in northwestern Wisconsin and with 184 employees, to offer an expanded product mix and production capacity to its customers around the world, Borgman officials said.

Dairyfood USA, its roots established in 1953 and with 149 employees, produces private label products including smoked links and loaves, snack wedges, portion-control cups, dips and spreads, cut bars, and non-dairy products. Products are also sold under house brand names such as Glacier Ridge Farms, Queso de Casa and Sonoma Jacks. The company’s customers include retail, food service, airlines and gift pack suppliers.

“Throughout the selling process, it became distinctly obvious that Borgman Capital was the right choice to lead Dairyfood USA in its next chapter. The professionalism, honesty and genuine respect for our team and culture is what set them apart from other buyers,” Daniel Culligan, president and CEO of Dairyfood USA said in a statement. “I am confident that the future is extremely bright for Dairyfood USA and Gilman Cheese.”

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Borgman Capital acquired Gilman Cheese Corp. in February 2019. Following Culligan’s planned retirement, Gilman president David Delgado will oversee integration of the organization alongside Dairyfood USA and Gilman management teams, said Sequoya Borgman, founder and managing director of Borgman Capital.

Based in downtown Milwaukee, Borgman Capital is focused on “lower-middle market companies” in the Midwest. Its portfolio includes Lift Products Inc., a manufacturer of ergonomic industrial equipment; Solution Dynamics, a national distributor of warehouse, storage and industrial equipment; AscendTek, a parent company for the regional operations that provide project management to maintain, service and construct telecommunications infrastructure; and Southeastern Meats, which specializes in frozen meats, vegetables, sandwiches and bakery products.

Sonoma Jacks cheese packaging at Dairyfood USA in Blue Mounds.

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Dairyfood USA has European roots. It started as Stauffer Cheese in 1953 after Alex Stauffer, who owned a processed cheese company in Hungary, escaped from the Soviet-occupied country and settled in Blue Mounds. It was purchased by a large Austrian dairy co-op in 1982 and was renamed Lactoprot USA in 1995.

After the Artax group purchased it in 1998, it changed its name to Dairyfood USA in 2007 to better reflect the company’s expanding focus on consumer products. Culligan, who joined the company at about the same time Artax bought it, previously worked for a sausage company as vice president in charge of sales and marketing.

“There is no doubt that Wisconsin is blessed with a large number of artisanal cheese producers. Fortunately, there will always be a demand for extended-life cheese products, due to concerns of handling issues for natural products, increased merchandising and marketing opportunities,” Culligan told the Wisconsin State Journal in 2017. “Dairyfood’s goal is to produce cheese products that replicate the flavor and texture of natural cheese, but require less concern of handling, improved melting functionality and the extra margin of safety associated with the methodology we employ in production.”

Dairyfood USA, along Highway 18-151 in Blue Mounds, has a long history of processing cheese and traces its roots to 1953.

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That year, Culligan said his company processed about 10 million pounds of smoked Gouda annually. The company doesn’t make its own cheese but instead buys it in bulk from producers in the Upper Midwest and processes it into its products, most of which are sold under other companies’ brands.

The addition of Dairyfood USA further diversifies Borgman’s portfolio and further bolsters Gilman Cheese.

“We are excited about the synergies and growth opportunities ahead,” Borgman said. “We are proud to bring together two leading cheese processors in our home state and continue to support the communities of Blue Mounds and Gilman.”

Photos: World Championship Cheese Contest at Monona Terrace

Larry Bell, with LBell Consulting from Green Bay, judges mozzarella during the World Championship Cheese Contest at Monona Terrace in Madison, Wis., Tuesday, March 1, 2022. AMBER ARNOLD, STATE JOURNAL

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Greg Kinate, with Winona Foods from Little Suamico, left, and Luis Jiménez-Maroto, with Center for Dairy Research from Mexico, judge cheese curds during the World Championship Cheese Contest at Monona Terrace in Madison, Wis., Tuesday, March 1, 2022. AMBER ARNOLD, STATE JOURNAL

AMBER ARNOLD

(From left) Franco Sessa, with Whitestone Cheese from Auckland, New Zealand, and Terry Lensmire, with Lensmire Dairy Consulting from Manitowoc, judge string cheese during the World Championship Cheese Contest at Monona Terrace in Madison, Wis., Tuesday, March 1, 2022. AMBER ARNOLD, STATE JOURNAL

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A sample of rindless Swiss is taken for judging during the World Championship Cheese Contest at Monona Terrace.

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Thierry Martin, of Canada, and Alieen Kacvinsky, of Madison, at right, judge swiss cheese during the World Championship Cheese Contest at Monona Terrace in Madison, Wis., Tuesday, March 1, 2022. AMBER ARNOLD, STATE JOURNAL

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John Jaeggi, of Brooklyn, Wisconsin, left, and Roland Sahli, of Switzerland, judge rindless swiss during the World Championship Cheese Contest at Monona Terrace in Madison, Wis., Tuesday, March 1, 2022. AMBER ARNOLD, STATE JOURNAL

AMBER ARNOLD

Judging is underway during the World Championship Cheese Contest at Monona Terrace in Madison, Wis., Tuesday, March 1, 2022. AMBER ARNOLD, STATE JOURNAL

AMBER ARNOLD

Judging is underway during the World Championship Cheese Contest at Monona Terrace in Madison, Wis., Tuesday, March 1, 2022. AMBER ARNOLD, STATE JOURNAL

AMBER ARNOLD

David Wentz, with Sargento Food Inc. from Plymouth, left, and Don Tribby, with International Flavors and Fragrances from Springfield, Missouri, judge medium cheddar during the World Championship Cheese Contest at Monona Terrace in Madison, Wis., Tuesday, March 1, 2022. AMBER ARNOLD, STATE JOURNAL

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