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The Cheese Market

Consumption, Production, Quality, Export and the Market

Since 1995, the per capita consumption of cheese in South Africa has increased form 1 to 1.9 kilograms each year. Although this is still much lower than many other cheese-producing countries, this is great news for local manufacturers. The French top the list with 25 kilograms per year followed by Greece and Germany with 20 kilograms and the Netherlands with 18 kilograms. The English, Australians and New Zealanders are on 9 kilograms, while the Japanese, on 2 kilograms, are just a bit better than South Africans.
 
Traditionally, South Africans have shown a preference for milder cheeses. In the last decade this has all changed, as we have begun to experiment more with types of cheeses that are more flavourful.

The worldwide trend of eating more meals outside the home is also prevalent in South Africa. More cheese is thus being consumed through prepared and recipe dishes eaten in this way. The 50% growth of processed cheese, mainly in the food service industry, is a good example of this lifestyle trend.

The popularity of television food programmes and glossy food books, which highlight the use of cheese as a food ingredient, have also moved South Africans to use more cheese in their dishes.  These are excellent ways to make cheese part of the diet and to utilise the nutritional value of it. Although South Africa will never reach the American level, where 38% of cheese is consumed through the catering and food-manufacturing sector, it remains a huge growth opportunity.

South Africa produces about 82 000 metric tonnes of cheese per year from 800 millions litres of milk. About 51% of this quantity is in the form of Cheddar (31%) and Gouda (20%). The remainder comprises other types and is headed by Mozzarella, Feta and Cream cheese. Specialty, or continental, cheeses are the new flavour heroes and for now Italian types are leading because of their versatility. French types are bound to make a serious attempt to lead in demand, however, once consumers discover their flavour profiles.

Twelve large, automated and modern factories are responsible for about 65% of all cheese made in South Africa, with the largest one able to manufacture up to 45 metric tonnes of cheese per day, all of uniform quality. The rest is produced in medium to small cheeseries, some producing only 25 kilograms per day. Cheese is manufactured in all the provinces of South Africa but there has been a shift by the medium and smaller manufacturers towards the Western and Eastern Cape coastal areas. This is in line with the fact that milk production has been shifting away from the inland areas to the southern coastal regions due to favourable weather conditions and the availability of water. The Western Cape is now the undisputed cheese province of South Africa as it is estimated that more than 50% of all cheese is produced here.

Cheese of outstanding quality is found in South Africa but new demands from consumers are forcing manufacturers to concentrate and improve their quality even further. Although an event such as the South African Cheese Festival is introducing consumers to the eating pleasures of cheese, manufacturers have to bear in mind that a more discerning consumer is going to demand a greater variety and excellent quality. International competition plays a big role in improving cheese quality and it is expected that South African cheese manufacturers will be forced to improve their quality even more when they become part of the global market.

The annual South African Dairy Championships aim to assist in improving quality, while manufacturers compete for the honour and recognition that a first prize brings. Cheeses, which are honoured with the coveted Qualité Awards awarded to cheeses of exceptional quality, are marked with the Qualité mark, enabling consumers to easily identify these products on the shelves. The quality of these award winners is monitored on a quarterly basis to ensure that the cheese lives up to it achieved status.
 
South African cheese manufacturers should note that cheese quality does not only mean a good tasting cheese but also a cheese that complies with food safety requirements. They have to appreciate that total quality is what is required to convince the consumer to continuously purchase a specific cheese. Bigger manufacturers are constantly seeking to improve their quality through modern technologies. Smaller cheeseries should do the same as many of these technologies are also available to them.

Although 84% of cheese consumers eat Cheddar and Gouda there is a growing demand for specialty cheeses. Until eight years ago, the consumption ratio for Cheddar and Gouda was 52:48 but the versatility of Cheddar has resulted in a ratio of 61:38. One reason for this change is newly found applications in the food manufacturing and catering sectors, which created new usage opportunities for Cheddar. It is foreseen that more applications for cheese would be found in these sectors which would further increase consumption. One obvious example is cheese platters in restaurants. South Africans have not yet fully been exposed to the pleasures of enjoying a cheese platter after a good meal and restaurants should take the opportunity to explore this eating experience. It is estimated that 1 000 metric tones per month of mozzarella-type cheese is used on pizzas in South Africa but that new opportunities in the take-home food sector could be responsible for further consumption growth.

Future consumption trends will depend greatly on the development of the new South African middle and upper classes. Improved economic situations and the fact that South Africa is experiencing a 9% annual growth in food purchasing will increase consumption of cheese in any form. Taking into account that cheese sales in South Africa are growing with 3% per annum against a world figure of 1.8% is encouraging, and should stimulate manufacturers to promote the variety, quality and availability of their cheeses.

Supermarkets dominate the retail sales of cheese and it is estimated that 75 - 85% of total cheese sales happen through this sector of retail. Traditionally, supermarkets did not offer a large variety of cheeses and sold only the faster-moving cheese types, which were handled as price-driven commodities. During the last ten years, some have started to focus on specialty types, enjoying great success in making these available to the consumer. Supermarkets will thus remain an important link in the supply chain in terms of getting a variety of cheeses to the consumer, though retailers and manufacturers should work closer to better serve the interests of the cheese-eating public. Supermarkets lack one serious attribute when it comes to cheese and this is cheese knowledge on the floor. Very few, if any, supermarket employee can offer the correct knowledge about the wide variety of cheeses they stock nowadays. Training of these employees will enhance their customer loyalty and the first group to do this will likely reap the benefits of good service and improved cheese sales. Personal experience with this type of employee training in the UK can vouch for it.
Delicatessens, gourmet farm stalls and morning markets are also playing a significant role in stocking a good range of regional cheeses together with other destination food products. The owner of such an outlet is quite often an informed source of information about the cheeses that are stocked.

Although a limited number of South African manufacturers have exported cheese to the European Union under the EU/SA Free Trade Agreement, South Africa is not yet a cheese exporting country with the result that most produce with only the domestic market in mind. Some smaller quantities do, however, find their way into a few African countries and Indian Ocean Islands on a regular basis. There is no question that markets for South African cheeses exist in the UK and USA but local manufacturers need to overcome the hurdles of EU certification, exchange rate and competitiveness. The USA does not require any certification of manufacturing plants but as no free trade agreement or country allocation exists between the USA and South Africa, price competitiveness becomes very important. Both these countries welcome cheeses from new origins and South Africa can be an exciting origin as it is not known as a quality cheese producer. Clever marketers can explore this fact when the time is right.

Any growing industry faces challenges and the cheese industry is no exception. Issues such as the training of young cheese makers, a good and reliable distribution system for the smaller and independent cheesery and offering good cheeses at affordable prices, remain some of these.

The intelligent promotion of cheese per sé through well executed campaigns is lacking and would also help to increase consumption. At the moment the only serious and co-coordinated promotion of South African cheese is during the South Africa Cheese Festival.

Demand for existing and new cheeses will continue to grow for the foreseeable future, a fact that paints a positive future for cheese in South Africa. How local cheese makers will rise to the challenge automatically becomes an objective for them.

All serious cheese producing countries of the world have a cheese society whose duty it is to support, grow, and unite their cheese-making members while promoting the consumption of cheese as a food. South Africa lacks such an association. In this way, cheeseries should unite while the going is good. The first task of such an association should be to draw up a Code of Practice, which will do the industry a world of good and ensure continued growth.


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