Global cheese sales declined marginally in 2002, in line with the overall trend for the past five years, according to market research group Euromonitor. But health, convenience and the unique status offered by schemes such as the Protected Designation of Origin programme run by the EU could offer major opportunities for boosting cheese sales in the future.
In line with trends in the rest of the packaged food market, health, convenience and quality have been significant growth drivers underpinning development in the cheese sector and driving growth in western Europe, North America and Australasia, according to Euromonitor, with manufacturers slowly realising that adding value is a more worthwhile strategy than shifting tonnage through price promotions - one of the main reasons for the decline in cheese sales over the last five years.
The key area of innovation in cheeses has been in packaging and cheese formats that respond to demand for convenience, the market research group said. Packaging innovations such as single-serve cream-cheese cups and Kraft's Rip-Ums Cheese Strips have helped add value to the sector. Within the unprocessed hard cheese sub-sector, pre-shredded, grated, cubed and sliced varieties led sales growth in many developed markets in 2002. Bags with more user-friendly sliding zips to ensure product freshness further boosted sales.
In developed markets, a key factor influencing demand for cheese was the perceived nutritional benefit due to its calcium and protein content. In western Europe, the largest regional market for cheese, health fears associated with BSE and dioxins also benefited cheese as it appealed to consumers as a safe alternative to meat. Organic, pre- and probiotic, and light cheeses also added value to the sector.
In the large US market, calcium-enriched cheese products were marketed directly to women and children and the elderly, as the consumer groups most likely to suffer from calcium deficiency and osteoporosis. However, improving or adding to cheese as a product is fairly difficult, although a wide number of producers experimented with flavourings and aimed to enhance the nutritional value of cheese via addition of vitamins and minerals. Product innovations have had their greatest success in the processed cheese sub-sector.
Speciality cheeses drive sales
A key growth driver in the unprocessed cheese sub-sector was the rise in gourmet, speciality and locally produced products, including brie and camembert. Unprocessed cheese is characteristic of western Europe and other developed markets rather than emerging markets, where manufacturing and storage capabilities favour processed cheeses.
In markets such as the US, Italy and France, demand for premium 'ethnic' cheeses was the key factor behind value growth in 2002 for hard cheeses, while in the UK continental cheeses like feta and halumi also saw strong growth. Growing sophistication in consumer tastes has been driven by increased travel and development of the restaurant sector.
Demand for quality and naturalness has also seen the growth of artisanal cheeses. Such has been the success of artisanal products that leading players even launched products that aimed to imitate artisanal standards of taste, texture and packaging, such as Galbani's Santa Lucia and Vallelata mozzarella brands in Italy.
PDO promoting speciality productions?
In 1993 European legislation came into force providing for the protection of food names on a geographical or traditional recipe basis within the European Union. Protected Designation of Origin (PDO) status is open to products sourced and manufactured in a unique fashion within a particular geographical area.
A key UK example is Stilton cheese. To be called Stilton, the raw material must be sourced and the product manufactured in the counties of Leicestershire, Derbyshire or Nottinghamshire to a defined local recipe. The name comes from the town of Stilton itself, where the first record of the cheese being sold is from 1727. No other cheese within the EU, no matter how similar in appearance, taste or texture can be called Stilton.
Other PDO cheeses include Roquefort, from France, and Gorgonzola from Italy, with nearly 150 cheeses in total having PDO status throughout Europe.
The EU believes that protecting geographical names in this fashion is central to promoting quality produce. As such, manufacturers and retailers ought to be able to add value to their cheese range by promoting PDO cheeses and emphasising the unique characteristics, history and quality of each, much in the same way as is done for wine, according to Euromonitor.
Moreover, according to the EU, some regions could benefit economically and socially as a consequence of PDO. The system formalises a means of identifying, protecting and distinguishing specialist products, in addition to fuelling local economies.
But the PDO scheme has not been welcomed by everyone, not least producers outside the designated regions. For products prohibited from using protected names, there can be significant difficulty getting the message across. How are consumers to know, for example, that 'Italian grated cheese' is actually Parmesan?
PDO cannot be applied to generic food types, so in many cases a PDO uses a regional appellation plus the generic name. Thus we have Brie de Mehun, or Camembert de Normandie. However, what exactly constitutes a generic name is a matter for considerable debate and remains a key cause of friction between Member States in the EU.
The most recent example of PDO cheese - and the surrounding controversy - is that of Feta, which was registered as a PDO in October 2002, despite opposition from a number of countries, including Denmark which is a significant Feta producer. The decision is currently being challenged in the European Court of Justice (ECJ). In addition, the decision on whether Parmesan is a generic name, or a direct translation of Parmigiano Reggiano, which already has PDO status, is still unresolved and may be facing another court case.
Other countries getting involved
These disputes are not restricted to EU Member States. Both the US and Australia claim that PDO is inconsistent with WTO rules banning trade discrimination and that the scheme has a significant impact on the marketing of their products within the EU.
These countries feel that PDO could also usefully be awarded to their regionally specific produce, but the EU claims not to be under any obligation to do so under existing agreements like TRIPS. While recent amendments to PDO legislation do allow for the registration of third-country products, the EU is requesting a reciprocal approach which would protect EU products abroad, but which the US and Australia are unhappy with - in particular with reference to drinks products such as sherry and Champagne.
Thus, claims Euromonitor, PDO can in certain cases promote the growth of speciality and gourmet cheeses by applying a clear system of registration and recognition. However, when the designation is applied to generic-type names like Feta, the knock-on effects in terms of consumer confusion and an inability to identify the product they want could negatively impact the growth of such cheeses, while the associated costs for manufacturers having to rename and re-advertise their products are also great.
Whether cheese producers prefer to solve these problems through the courts, or through strong branding activity, remains to be seen.
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