This week on Special Sauce we are returning to the topic of the horrendous toll the pandemic has taken on the food culture. Today, we’re talking cheese. In the first of two far-ranging interviews, I spoke to cheesemaker Sheila Flanagan, co-owner of Nettle Meadow Farm, and Saxelby Cheesemongers owner Anne Saxelby.
Sheila, a former corporate lawyer, explains in excruciating detail the effects the pandemic has had on her business. Those details include layoffs involving many of her employees and giving away $75,000 worth of unsold cheese because it would have gone bad otherwise. And the fact that the pandemic happened just as Sheila was expanding has made it that much worse.
Anne Saxelby paints a similar picture from her cheesemonger perspective. And yet, somehow, some way, both Sheila and Anne feel they will make it through this difficult period and get to the other side. All Serious Eaters have to root for them, and we can do our part by buying cheese from both of them online here.
This episode of Special Sauce also marks the return of our "Ask Kenji" feature. Today, given our interviewees, I thought it was only right that Kenji answer a dairy-related question, about butter. (Sheila Flanagan, in addition to cheese, makes a delicious ,lightly salted butter, too.)
So enjoy the cheese and butter talk on today's episode of Special Sauce, and please stay safe and healthy.
Production note: With everyone hunkered down in place we are no longer able to record Special Sauce in a fully equipped studio with an experienced and skilled engineer. So if the sound quality of this episode isn't up to snuff, know that we are working on all aspects of the production within the context of the new reality we're all living in. Better things and better sound lie ahead.
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Ed Levine: Welcome to Special Sauce, Serious Eats podcast about food and life. This week we are returning to the horrendous toll the pandemic has taken on the food culture. Today, we’re talking cheese. In the first of two far-ranging interviews I spoke to cheesemaker and co-owner Sheila Flanagan of Nettle Meadow Farm and Artisan Cheese and Saxelby Cheesemongers owner Anne Saxelby.
Anne Saxelby: So my name's Anne Saxelby. I'm the founder and co-owner of Saxelby Cheesemongers. We are a retailer and wholesale distributor in New York.
Sheila Flanagan: And I am Sheila Flanagan. I'm one of the two owners and head cheese maker at Nettle Meadow in the Southern Adirondacks. We make all sorts of mixed milk, goat's milk, cow's milk, sheep milk cheeses, send them all over the country.
EL: Yeah. You send them to Martha's Vineyard because I've been buying and eating your cheeses and butter in copious amounts in the last few days in anticipation of this interview.
SF: That's great. I'm glad you're even getting the butter, too. Fantastic.
EL: Yeah. Why don't we start, sort of just give us a snapshot of the picture of your business before the pandemic hit?
AS: Yeah. So over the years, our business had really shifted from being predominantly retail to predominantly wholesale. So in the beginning of 2020, I would say that 50% of our overall business was wholesale. 70% of that was to restaurants. The other 30% was to retail shops, which we do, but not quite as much of. So that's where we were really focusing all of our energy. We had hired a new salesperson back in the fall of 2019 to help us grow our restaurant business. And we were off to a great start. I mean, in January and February 2020, our wholesale was up 16% from where it was in 2019.
AS: We were just gaining some really awesome momentum. And so when everything kind of hit the fan in March, I mean, obviously it was a huge bummer for everybody, but that definitely changed what we were doing.
EL: Yeah. And did it sort of go off a cliff?
AS: Overnight. People refused their orders on Friday, March 13th, and that was it.
EL: Wow. Wow. Okay. And Sheila, tell us about the evolution of your operation.
SF: Sure, sure. So my partner Lorraine and I bought the business in 2005. And I remember, I think Anne visited in 2007 or 2008. And I remember her describing the place as rustic and I was like, "We're not rustic." We were so rustic. She was so right. And so we had, I think, two little pasteurizers back then and a few lambs and maybe 100 really ragtag goats.
EL: They weren't well-groomed goats?
SF: They weren't well-groomed, but they were working girls and we're very proud of our working girls and our working heritage of our farm. But when we bought the place, it had a lot of work to be done and it was super small scale. There were two little 15 gallon pasteurizers and one of them didn't even work. So it was tiny.
EL: What were you two doing before you bought the place?
SF: Making tons of money as corporate lawyers. Yeah, so it was definitely still... you know in some ways we kind of were ready for this horror of COVID-19 because we had gone from riches to rags overnight. And so it's just kind of reliving that experience all over again.
EL: It sounds like, like a lot of people, you were relentlessly downwardly mobile.
SF: Yes. For sure. For sure. Well, we had great dreams of building a very good high-end artisan cheese company giving, the thing that's different about Nettle Meadow that we wanted to do was give all of these goats a better life so that they weren't just used for five or six years and then sent off somewhere to be made into meat but instead to actually give them a retirement program and that's what makes us different from other places. So we came, we worked with these tiny pasteurizers. We bought a 30 gallon pasteurizer in, I think, 2006, and we bought a 100 gallon pasteurizer probably in 2009 and then we bought another and then we bought another. And so we've been kind of enlarging our cheese plant as we've gone along. And we went from one tiny little 15 by 12 foot room aging facility into the entire cement building, which I think is something like 30 by 120.
SF: And it's just not enough space. So we bought goats. We partnered with 11 different farm families in the area. We've had a lot of success. I mean, people like the cups. They like the variety. They like the story. They like reading about the different animals. So we were doing well and I had moved into a lot of sales. We had hired a full-time sales and marketing person at the beginning of this year. We had signed a contract to buy a 14,000 square foot log dude ranch facility that needed to be completely refurbished, but has an amazing 7,000 square foot basement, which is all stone cellar for additional aging space and for an additional cheese plant and for a restaurant. So all of these things were going on in March. The lots of 11 farm families over the last three years who have become extremely reliant on us, 18 other employees whose families have become extremely reliant on us to keep the lights on and the paychecks going.
SF: And then we started to hear stories, starting to get worried and somewhere, I think Anne is right there in the heart of it all. So she knew March 13th that there was trouble. I think it was more like St. Patrick's Day for us that we were like, "Oh my goodness, March 17th, the bottom is falling out.” And our sales went from, "Gosh, we're on a great trajectory. We're going to do better the next year or better than last year" to less than 30%. I think we got like 17% of an average March orders on that week of March 17. And then the next week was almost as bad. And the next week after that was, I think maybe we got up to like a 24% of average and we have a farm bank that we work with and I called immediately and said, "We're not going to make it through a week on this, guys." And so, because of the relationships we've had, we were able to hook right into some of the loans that were available very quickly. Had we not done that, I don't think there would have been enough grain and cheese to go around.
EL: Wow. And you're in Warrensburg, New York, right? So that's like two hours north of New York?
SF: It's three and a half, three and a half. Lake George region.
EL: I've also heard actually from one, Anne Saxelby, that you're also a judge in the town.
AS: Yes, I am. That's my sidelight. Every Tuesday afternoon, I listened to criminal cases, civil cases, a little bit of everything. So it's just a little piece of that hat left from my history as a corporate lawyer. Gives me a reason to maintain my California bar card.
EL: So could we see a television show like Judge Sheila?
SF: Oh boy. That would be, yes. That would be fun. That would be fun. I could have goats and sheep in the courtroom maybe. Maybe I could work on that in my spare time. Yeah, no, that is something I do. And that's something else actually. So many things are just at a halt. Like I have not had a court session now in three months. Even my court clerk, that's somebody who relies on her paycheck, and she's been on unemployment now for three months.
EL: Do both in you have problems even getting paid for the cheese that people had bought previously?
AS: Oh yeah. I mean, well, I can speak to that first. I mean, Sheila, I know we're late paying you. And I mean, and so we rely on restaurants to pay us who are notoriously bad payers. I'm sorry to any chefs out there who might be listening to this, but the restaurants that we give terms to, and it depends, some people pay on time, but oftentimes we do have to chase people. And so the metric trickles down and that was happening before the COVID-19 pandemic. And so then when the pandemic hit and restaurants closed, a lot of them actually froze their bank accounts. So if they had sent checks out to us, we tried to cash a few and they bounced.
AS: So now we're dealing with over $100,000 in unpaid invoices from before when this happened and we're still keeping the business going. Like Sheila was talking about, we were lucky to get a PPP loan, which obviously we're not using the funds for that. We're using the funds for payroll and other things, but yeah, it’s really tough.
SF: And if I can speak to that for a minute. I mean, I actually have been impressed with how many people have been able to pay us. As Anne was saying, I mean, nobody is able to pay on time really at this point. And it's interesting that, the smaller the company, the better chance it is that we're getting paid by them. The larger the company, especially if they were a restaurant distributor, the harder it is for us to chase down much money. And it's understandable. I mean, when you were a huge company, it's really hard to regroup and rebuild yourself to do something other than to sell to restaurants. And so some of those distributors that we've worked with over the years, I just hope that they are going to be around on the other end and that eventually, maybe by the holidays, we'll get paid by them.
EL: Got it. So you do most of your sales, not through the one salesperson you hired, but through distributors. Right? And that salesperson sort of supervises the relationships with the distributors. SF: Yes, exactly. Helps to target new retail locations and connect them up with distributors. That's the sort of thing that we do.
EL: What's so fascinating is, and heartbreaking too, is that you both have been doing this for a while. Right? And nobody goes into making cheese or selling cheese to afford to go out to the Hamptons by helicopter every weekend. In the best of times, your businesses are probably both pretty low margin businesses, right?
SF: For sure.
EL: Restaurants, they say, if they're making 10%, that's a lot. My guess is whether if you're a cheesemonger or a cheese maker, that 10% may be hard to achieve, too.
AS: Yeah. If we were in it to make millions, then we definitely be doing something else, something that's not perishable, but we do it because we love the products and we love the producers. And so, yeah, even in the best of times, it is tough, but it's very rewarding because you have all these relationships and you know you're supporting this virtuous cycle of sustainable agriculture and small business and rural economies and all these things that are so valuable. So I don't know, I never get discouraged because I know at the end of the day, that's what we're doing.
EL: And what about you, Sheila?
SF: I would agree. I mean, the years that we break even we celebrate. I mean, that's truly the way it is because we're farming. And so if there's an illness or there is a bad storm or there's so many different things that can just send your entire year down the drain, like a God awful virus. And, and who knew that, you pay for business interruption, who knew that there was actually boilerplate on your insurance policy that says, "Viruses excluded." I mean, insurance guys are very, very smart.
EL: Right. And you're a lawyer.
AS: That was a very nice thing to say. I would say something else.
EL: Yes. That's a charitable interpretation. You guys are doing what you love. You're not getting rich, but you're doing it because you think it's important. And so the thing that makes it also heartbreaking is that you were seemingly poised on the precipice of not mega riches, but solid sustainability.
AS: Sure. Well, for us, like Sheila said, too, every year is different and every year we're lucky and thankful if we break even because there's just so many different factors at play. It's like our retail shop. Now we have a retail shop in the Chelsea Market, which has also been pretty much decimated by this because Chelsea Market is closed upstairs and open in the basement. No one knows it's there and no one knows how to get in and et cetera, et cetera. No one wants to come to Chelsea Market because it was the highest foot traffic location in the city. And everyone's like, "No, we're going to stay away from there." But so that the retail shop fluctuates all the time. The wholesale business fluctuates all the time because you have different restaurants opening, restaurants closing, chefs coming, chefs going. It's a million relationships to maintain.
AS: And then we do some mail order direct to consumer as well, which is a whole other can of worms and learning that side of the business. So I always say it's like once a small business owner, always a small business owner. There's never a moment when you're just like, "Oh, we're good. We're coasting." Everything is constantly shifting and moving. I compare it. If you're a farmer, they say you're always fixing a fence. Like the minute you fix a fence, the fence is broken somewhere else. You got to go fix it over there. And so but we were. We were at a good moment when this happened and then we really took a big hit. So, but we're trying to, like Sheila was talking about, being a smaller business and a smaller distributor, I think works to our advantage in this situation because we were immediately like, "Okay, what are we going to do? Let's like throw some spaghetti at the wall. Let's reach out to people and see what they're up to and see how we can continue to sell cheese." And so we were lucky that there were a bunch of small retailers that were still open in New York City, particularly artisan butcher shops, places like The Meat Hook and Marlow & Daughters and Hudson & Charles and places like that, are selling a ton of cheese and a ton of meat. Because I think that this pandemic has also exposed some weaknesses, obviously in big distribution and big production, that now the smaller producers are still like, "Nope, we're good. We still have our supply chain intact. We still have our local farmers that we're working with. Our deliveries are coming in. The customers are housebound in the neighborhood. They're coming to shop here." So we've been working with them. A couple of other places we know started delivery services, places like Bien Cuit, they started a new company called Borough Provisions to deliver bread and cheese and other pantry items to people's homes. So we started working with them and then also a lot of restaurants have started doing restaurant boxes or take out boxes that diners can buy to eat at home. So like Dan Barber and his team at Blue Hill started their resource program where you can get a dairy box a week or a bread box a week. And so we've been lucky to loop in with some of those folks to get them for those programs as well.
EL: And have you gotten more aggressive in terms of your mail order business? Because that's a whole other business.
AS: It is insane. Yeah. I mean, and if anything, our mail order business really took off after this happened, and it's been really interesting because before the pandemic, we never invested in digital advertising or digital marketing, anything like that, just because the price to enter and really play that game is so high that we were just never comfortable making that kind of investment because we didn't know what we were going to get back. But now that people are stuck at home, they're actually looking for us. They're looking for good food. They're looking for. And it's one of the few kind of small comforts that people can buy and do for themselves at home that's a nice thing. Buy some nice cheese or some nice wine. So we've seen just people finding us organically on the web and also through listings that other folks have put together, which is really nice, like Bon Appetit put together a list of retailers that they like that you can order from. And this blog that's called The Spruce Eats. They put together their own lists. And so stuff like that has been tremendously helpful to us because people are finding us via those channels, which is really awesome.
EL: And what about you, Sheila? I mean, you had to make a series of immediate pivots too, right?
SF: For sure. I mean, we were in the middle of construction on this new location and we had to determine, "Okay, what part of that can we do? Does it even make sense to expand when our business has been reduced to about a third of what it was?" And it really taught us to be more in tune with how much of our business was going to restaurants. We never really got a good sense until that day when we realized, "Oh, we must be selling an awful." And then we found out how many schools where our cheese was being distributed to and how many large event locations like Madison Square Garden was using our cheese. And so all of these things piled up to mean no sales for us. So we did pivot and, much like Anne was saying, I felt that it was a great idea for someday to be able to set up on our website a direct order, but it was pricey and it was time that I felt like should be spent on other things.
SF: And so I waited and then March came around and I called my digital management company. I said, "Okay, now's the time. Let's get that site up. How many days, how many weeks?" And I had to learn how to enter all that stuff onto the website myself, because it seemed that urgent. So we've done some good sales there. I mean, it doesn't make up the difference, but it certainly has been building, which is nice. I don't know that we're capable of what's necessary in the summertime, but we're certainly doing our best to get cheese out, at least in the local area, to the Adirondacks.
EL: Are there things that you've successfully pivoted to now that won't necessarily be true in the summer? Is there a seasonal issue that you're going to be dealing with?
SF: I hope that we're able to do everything in the summer, I hope with just a little bit more insulation and ice. The spring in the summer is when we have the most milk. So we have a glut of milk and we don't have the flexibility that the cheddar makers do or the Gouda makers do to maybe age that out for another six months. We have to find a home for our cheese in the next 90 days or in the next 30 days or it's going to a local food bank and we have done a lot of that. And I'm hopeful in the next year or two people will remember that so far Nettle Meadow has donated over $75,000 worth of cheese to regional banks.
SF: That's amazing. Anne, what about you? Is there a seasonal nature to your business?
AS: Yeah, well, the fourth quarter in the food business is always the best because people are having parties and events and giving gifts and just eating more and indulging more in general. So the fourth quarter is always the best for us. Summertime is typically a slower time for us because people just leave New York. So we've seen it this week. I mean, Memorial Day was Monday and our day today for wholesale. I was over at the warehouse earlier today. We had four deliveries. And it's interesting because I've been talking with folks and so people generally will leave town, maybe for a few weeks or maybe for a month, but people this summer are like, "We are gone. We're renting a house for like the entire summer. We're getting out of the city." In fact I'm sitting in my friend's apartment right now. So that's why I have a quiet place without my kids yelling and screaming. And they're gone for the summer. So many people are leaving New York that I'm really worried about this summer and what that's going to mean. And I hope that we can continue to reach people via mail order throughout the summer.
EL: Yeah. Because the restaurants are, even if they come back and I don't know how many are going to come back with social distancing, right, because if it wasn't a tenable business with being able to fill every seat, it's going to be less of a tenable business if you can only have 50% of your seats filled.
AS: Or 25. I've heard like 25% capacity. Yeah. It's not a math equation that works.
EL: Yeah. You've obviously made these pivots. What percentage are you up to in terms of revenue from when the pandemic first?
AS: Okay. I can look. Hang on. I'm going to look right now while we're on the phone, but, Sheila, if you know, go for it.
SF: I did look it up sadly on Tuesday night when I did my last billing for May and I thought, "Well, this week and last week were great. I mean, we half filled the truck. How bad could it be?" And I compared May of this year to May of last year. And we did 51% of what we did last May, but when we're coming off an April of about 28% and a March of 40%, it's pretty ugly. I will say that we have opened, while she's looking for the numbers, just to fill the time, we have opened up the retail store, which is just a cheese shop here in Lake Luzerne at the new location. And we did, I think that all of those people leaving the city are renting houses in Lake Luzerne. We did a substantial amount of sales this last weekend. And we're hopeful because PPP and the farm credit union only lasts so long. And so we are hoping that we get a little seasonal bump from the people coming to the farmer's market and whatnot this summer.
AS: Oh yeah, no, that's, that is true. And yeah, so I always wonder for cheese makers what that seasonal fluctuation looks like, because for us, it's so dramatic being in the city.
SF: We always squirrel some money away in the summer for holiday bonuses and things because we know that sometimes the holidays are good, but always the summer is good for us and we worry will that happen this year because people are afraid to leave their houses. So you know and people are afraid to go to farmer's markets, so we're not sure that we'll do the same bang up business that we usually do.
EL: And Sheila, so do you sell at some farmer's markets near your farm?
EL: But you don't come to New York, do you? That's a little too far, right?
SF: We don't. We looked into it at some point, but I think we're just outside of the mileage or something for that. So it was difficult, but we go as far south as Troy and Albany and Delmar. We do about 10 markets a weekend in the summer.
EL: Have those markets reopened and are you doing as much business with them?
SF: Some of the markets have contracted a bit and so only the most senior people. It's just one of those things where we were so joyous last year that we were stepping into the Troy farmer's market, which is one of the biggest and best farmer's markets in the state. But this summer, at least so far, they've contracted because the city doesn't want that many people coming in. And so that market we're not able to do. I think all of the rest of them will open or have opened, but again, not as much fanfare because the idea is you don't want to be bringing people to town. And I just don't know how you do that in the Adirondacks in the summertime.
AS: Well, overall our sales, I'm actually surprised by this. So January, well, and I think this is still because we've got a strong start to the year. So for the year overall through the end of today we're down 14%, but for the month of May, our sales were down 36%. For the month of April, our sales were down 35%. And for the month of March, about the same, yeah. They're down about 30%.
EL: But your businesses can't be maintained being down 35%. Right?
AS: Yeah. And well, and we actually did have to lay a bunch of people off. Before the pandemic hit, we had 10 full-time employees plus my business partner and myself. And then we were down to three employees and then we were recently able to hire one person back full-time at the warehouse and a driver back part-time. So we were 10. Now we're four and a half.
AS: So yeah. But your overhead and all that remains the same. So yeah, it's difficult. And it's funny because right now we are, since we're constantly reinventing everything, it feels like we're working 10 times as hard for a much smaller sale. Yeah. The importance of chefs and restaurants to the American artisan cheese industry, this pandemic has really laid that bare because without the support of the chefs and restaurants, it's just so hard to make up that volume because no matter how many people come to a farmer's market or buy a box of cheese online, it's not just buying 10 pounds of something to put in a dish.
SF: I was just going to say that's incredibly important. And one of the things that Anne just said, I say probably 40 times a day now, which is that we are working 10 times harder to sell that single one piece of cheese. And that is just amazing. I don't think that economically it's sustainable. I don't think that it's physically sustainable. I mean, it's not just me. I mean, I am working longer hours and I'm working physically harder, but my employees are all working harder, longer, faster to try to make the same paycheck. And we're all just like running around like little mice on a treadmill. And it's true that it makes you appreciate the chef so much and it isn't really sustainable. I mean, we're just, I mean, we're acting in kind of this suspended reality that we think that somehow human beings are incredibly creative and thoughtful and will find a way to fill that void. But we can't continue at 52%. I mean, I think that we'll have a little breathing room because the farmer's markets will come in and people will move into Lake Luzerne and we'll be able to sell some cheese for a couple of months. But when we hit September, I think that's when the reality is going to hit. And we survive and we find ways to sell in retail and sell to people picking up at their homes or something, or else I really don't know what's going to become of artisan cheese makers and cheesemongers. I just don't know.
EL: Wow, Sheila Flanagan and Anne Saxelby are two extraordinary women doing extraordinary work in the cheese world in the face of daunting odds in these challenging times. And since I have had Sheila’s seriously delicious butter I thought this interview gives us an opportunity to bring back our Ask Kenji segment, especially because this week’s question concerns butter.
EL: So now it's time for the question of the week that our listeners have been sending in to Serious Eats for our chief culinary consultant, Kenji López-Alt, the author of The Food Lab.
Kenji López-Alt: How are you doing, Ed?
EL: Good, man. How are you?
KLA: Pretty good.
EL: So I don't know. I might butcher this last name. So Steve Garbacz, please forgive me. It's Kenji's fault. Okay? Because, so Steve wrote in that he's been fighting his coworkers, re: butter, and this is something that you and I have discussed in many different situations. Okay to leave out for days or weeks or put it in the fridge?
KLA: So yeah, we've talked about this specifically, I think in the context of pizza, fried chicken and mozzarella.
KLA: Fresh mozzarella, which are all things that you don't put in the fridge ever. Right?
EL: Right. Much to my wife's chagrin.
KLA: So with butter. So it really depends what you mean by okay. Butter is going to take a long time for it to go bad because it's relatively low moisture, like low water activity. So it's relatively hard for bad things to grow in it. So it'll probably be fine out on the counter as far as like being okay to eat and not harming you. However, the flavor of butter does change even in one of those little sort of butter, those little jar things with the water seal where you put the butter upside down, the little bells, even with one of those, which has a very good seal, you're still going to get some amounts of oxidation of the fats and a little bit of like, sort of, I don't know, like sort of warm semi-rancid flavors will start to develop over time.
KLA: Where I live in the Bay area, I tried for a while leaving butter out on my counter, but I don't have air conditioning and the summer can get pretty hot. And many times I've found that after even just a couple of days, my butter would start to taste sort of like cheese, which you know, it's not necessarily bad, but it's different.
EL: It's fermented. That's so interesting because I went to Razza, this pizzeria in Jersey City, and he served butter that he'd allowed to ferment so that it tasted almost like blue cheese.
KLA: Yeah. So yeah, so sometimes my butter would get to that level. Like it would taste like, yeah, blue cheese or like a little bit sort of like Parmesan-y aromas to it. Yeah. I guess it's fine on your toast. It's good with honey, but it's not necessarily something everyone wants. So I mean, the answer is like, there's not really a debate. It's if you like your butter at room temperature and you don't mind those flavors developing, then leave it at room temperature. And if you don't then leave it in the fridge.
EL: Got it.
KLA: I don't think there's a hard and fast answer there. Whichever you prefer.
EL: Will anyone get sick from leaving butter out? I mean, I guess for months.
KLA: If you leave it long enough, yeah.
EL: But I mean longer than a few days, it would take, right?
KLA: It really depends on the specific environment you're in. It depends how clean your butter was to start with, how clean the knife you're sticking in there is, what temperature your kitchen is. It depends on a lot of different things.
EL: There's a lot of variables. All right, Steve, it's a tough question. It's a much tougher question than we thought, but I think we got it covered for you. Thanks, Kenji, man. We'll see you next week.
EL: That’s Special Sauce for this week. Thanks for making us part of your life. So long Serious Eaters. Please stay safe and healthy. We’ll see you next time.
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