South African Cheese Industry

INTRODUCTION

The per capita consumption of cheese in South Africa has increased form 1 to 1.9 kg per year since 1995. This is great news for local manufacturers but is still much lower than many other cheese producing countries. The French top the list with 25 kg per year followed by Greece and Germany with 20kg and the Netherlands with 18kg. The English, Australians and New Zealanders are on 9kg and the Japanese just a bit better than South African on 2kg.

Traditionally, South Africans preferred milder cheeses but during the last ten years, have been experimenting with types which are more flavourful with a resultant growth in sales of these.

The worldwide trend of eating more meals outside the home is also prevalent in South Africa and the result is that more cheese is 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 cheese. 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.

PRODUCTION

South Africa produces about 82 000 metric ton of cheese per year from 800 million liters of milk. About 51% of this quantity is in the form of Cheddar (31%) and Gouda (20%) and the rest consists of other types, 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. However, French types are bound to make a serious attempt to lead in demand, once consumers discover their flavour profiles.

Some twelve big automated and modern factories are responsible for about 65% of all cheese made in South Africa while the largest factory can manufacture up to 45 metric ton of cheese per day, all of uniform quality. The rest is produced in medium to small cheeseries, some producing only 25 kg 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 in it.

CHEESE QUALITY

Cheese of outstanding quality is found in South Africa but new demands from consumers are forcing manufacturers to concentrate and improve their quality. Although an event like the South African Cheese Festival is introducing consumers to the eating pleasures of cheese, manufacturers will have to bear in mind that a more discerning consumer is going to demand a bigger 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 aims 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 and awarded to cheeses of exceptional quality, are marked with the Qualité mark, which enables consumers to easily identify these products on the shelves. The quality of these Award winners are monitored on a quarterly basis to ensure that the cheese lives up to its achieved status. Qualité Award winning cheeses are promoted along with Double Gold and Gold Veritas wines on a national level to expose these outstanding cheeses to discerning consumers.

South African cheese manufacturers should bear in mind that cheese quality does not only mean a good tasting cheese but also a cheese that complies with all the 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 and smaller cheeseries should do the same as many of these technologies are also available to them.

THE MARKET

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 ton per month of mozzarella-type cheese is used on pizzas in South Africa but that new opportunities in take-home food sectors 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 the fact 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 the supermarkets did not offer a large variety of cheeses and sold only the faster moving cheese types, which were handled as price-driven commodities. However, during the last ten years some have started to focus on specialty types and have had great success in making these available to the consumer. Supermarkets will remain an important link in the supply chain in getting a variety of cheeses to the consumer and it is foreseen that retailers and manufacturers should work closer to serve the interest of the cheese-eating consumer. 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 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 which are stocked.

EXPORTS

Although a limited number of South 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 its way into a few African countries and Indian Ocean Islands on a regular basis. There is no question that markets for South African cheeses exists 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 ripe.

CHALLENGES

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 help to increase consumption. At the moment the only serious and co-coordinated promotion of South African cheese is during the South African Cheese Festival.

Demand for existing and new cheeses will continue to grow for the foreseeable future, a fact which paints a positive future for cheese in South Africa. How local cheesemakers will rise to the challenge automatically becomes an objective for them. A significant part of he anticipates R13 billion additional spending by South African consumers, during the build-up to the 2010 World Cup and the foreign currency spending of 3 million visitors, will be spend on food. South African cheesemakers should make sure that they offer the correct cheeses for this opportunity, in order to grab a slice of this spenditure.

All serious cheese producing countries of the world have a cheese society with a duty to support, grow, and unite their cheesemaking members, while promoting the consumption of cheese as a food. South Africa lacks such a cheese society/association and cheeseries should unite in this way, 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 the world of good and ensure continued growth.