cheese industry overview - eu, russia, georgia, armenia and arab countries

Armenian Development

Agency

Cheese market research for Armenian, Russian, Georgian, European and Arab markets

Cheese is milk's leap towards immortality. Cliff Fadiman

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TABLE OF CONTENTS LIST OF TABLES AND FIGURES ....................................................................................................... 5

Definition of Cheese ...................................................................................................................... 8

Major Classes of Cheese ................................................................................................................ 8

Etymology ...................................................................................................................................... 8

Harmonized System Codes (HS Code) for Cheese......................................................................... 9

Fast Facts about Cheese ................................................................................................................ 9

WORLD CHEESE MARKET OVERVIEW .......................................................................................... 10

EXECUTIVE SUMMARY ............................................................................................................ 10

MARKET OVERVIEW ................................................................................................................ 10

CONCLUSION ........................................................................................................................... 17

REFERENCES ............................................................................................................................ 18

ARMENIAN CHEESE MARKET BRIEF OVERVIEW .......................................................................... 19

BRIEF OVERVIEW ..................................................................................................................... 19

MARKET DATA ......................................................................................................................... 19

FOREIGN TRADE ...................................................................................................................... 20

REFERENCES ............................................................................................................................ 23

RUSSIAN CHEESE MARKET OVERVIEW ........................................................................................ 23


DOMESTIC PRODUCTION VOLUMES ....................................................................................... 23

KEY MARKET TRENDS .............................................................................................................. 28

FOOD RETAIL SECTOR AND THE LARGEST CHEESE PRODUCERS ............................................. 28

COMPETITION FIELD ................................................................................................................ 31

CONSUMER PREFERENCES ...................................................................................................... 33

PRICES ...................................................................................................................................... 35

IMPORTS .................................................................................................................................. 36

EXPORTS .................................................................................................................................. 38

PROSPECTS .............................................................................................................................. 39

REFERENCES ............................................................................................................................ 41

GEORGIAN CHEESE MARKET OVERVIEW .................................................................................... 43



KEY MARKET TRENDS .............................................................................................................. 45



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PRICES ...................................................................................................................................... 50

EXTERNAL TRADE .................................................................................................................... 51

PROSPECTS .............................................................................................................................. 52

REFERENCES ............................................................................................................................ 52

EUROPEAN CHEESE MARKET OVERVIEW .................................................................................... 54


MARKET OVERVIEW ................................................................................................................ 55

DRIVERS OF CHANGE: EU GROWTH RATES FALLING .............................................................. 56

STRATEGIES FOR CHEESE COMPANIES .................................................................................... 60

CONSOLIDATING MARKET POSITIONS .................................................................................... 61

IMPROVING VALUE-ADD POTENTIAL IN RETAIL MARKET ....................................................... 62

DEVELOPING SECONDARY PROCESSING AND DEDICATED SERVICES FOR RETAILERS ............ 63

CREATING FLEXIBILITY IN PRODUCT PORTFOLIO .................................................................... 64

DEVELOPING EXPORT BUSINESS ............................................................................................. 64

WHICH CUSTOMER SERVICE MODELS WILL PROVIDE SUSTAINABLE RETURNS? ................... 69

CONCLUSION ........................................................................................................................... 70

REFERENCES ............................................................................................................................ 71

CHEESE MARKET OVERVIEW OF THE UNITED ARAB EMIRATES .................................................. 72






PRICES ...................................................................................................................................... 79

IMPORTS .................................................................................................................................. 80

EXPORTS .................................................................................................................................. 81

PROSPECTS .............................................................................................................................. 81

REFERENCES ............................................................................................................................ 83

CHEESE MARKET OVERVIEW OF SAUDI ARABIA ......................................................................... 84





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PRICES ...................................................................................................................................... 89

IMPORTS .................................................................................................................................. 90

EXPORTS .................................................................................................................................. 90

PROSPECTS .............................................................................................................................. 91

REFERENCES ............................................................................................................................ 93

CHEESE MARKET OVERVIEW OF ALGERIA ................................................................................... 93





IMPORTS .................................................................................................................................. 98

EXPORTS ................................................................................................................................ 100

PROSPECTS ............................................................................................................................ 101

REFERENCES .......................................................................................................................... 103

CHEESE MARKET OVERVIEW OF EGYPT .................................................................................... 103

EXECUTIVE SUMMARY .......................................................................................................... 103

DOMESTIC PRODUCTION VOLUMES ..................................................................................... 105

FOOD RETAIL SECTOR AND THE LARGEST CHEESE PRODUCERS ........................................... 107

CONSUMER PREFERENCES .................................................................................................... 109

PRICES .................................................................................................................................... 110

IMPORTS ................................................................................................................................ 110

EXPORTS ................................................................................................................................ 111

PROSPECTS ............................................................................................................................ 112

REFERENCES .......................................................................................................................... 114

Cheese & Cheese Product Labeling Guidelines ......................................................................... 114

Glossary of Commonly Used Cheese Making Terms ................................................................. 117

ANNEX ....................................................................................................................................... 119


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LIST OF TABLES AND FIGURES

1. WORLD CHEESE MARKET OVERVIEW Pie Chart 1. World Dairy Production for 2011 Graph 1. Dairy Production Table 1. Production of Cheese Table 2. Top Cheese Producers Graph 2. World Cheese Production Table 3. Per Capita Production of Cheese Table 4. Top Cheese Consumers (kg per capita) Table 5. Top Cheese Exporters in Monetary Value Chart 1. Consumer Trends in Dairy Production

2. ARMENIAN CHEESE MARKET BRIEF OVERVIEW

Table 6. Production of Cheese and Milk in Armenia Table 7. Average Annual Per Capita Consumption of Cheese (of all types) in Armenia Table 8. Average Prices of Cheese and Milk in Armenia Table 9. Foreign Trade of Cheese and Milk in Armenia Table 10. Armenian Exports of Cheese and Curds by Countries Table 11. Armenian Imports of Cheese and Curds by Countries

3. RUSSIAN CHEESE MARKET OVERVIEW Pie Chart 2. Dairy Production in Russia for 2011 Graph 3. Cheese Production Volumes of Russia Graph 4. Per Capita Production of Cheese in Russia Table 12. Spreadable Processed Cheese by Type in Russia: % Value Breakdown Table 13. Unprocessed Cheese by Type in Russia: % Value Breakdown Table 14. Sales of Cheese by Distribution Format in Russia Table 15. Cheese Company Shares in Russia Table 16. Sales of Cheese by Category in Russia Graph 5. Sales of Cheese in Russia Table 17. Forecast Sales of Cheese by Category in Russia

4. GEORGIAN CHEESE MARKET OVERVIEW Table 18. Cheese Production Volumes in Georgia Table 19. Spreadable Processed Cheese by Type in Georgia: % Value Breakdown Table 20. Sales of Cheese by Distribution Format in Georgia Table 21. Cheese Company Shares in Georgia Table 22. Sales of Cheese by Category in Georgia Graph 6. Sales of Cheese in Georgia Graph 7. Foreign Trade of Cheese and Curds in Georgia Table 23. Cheese and Curds in Georgia Table 24. Forecast Sales of Cheese by Category in Georgia

5. EUROPEAN CHEESE MARKET OVERVIEW Pie Chart 3. Dairy Production in Europe for 2011 Figure 1. Per Capita Cheese Consumption by Market Segment, Selected EU Countries, 2010


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Figure 2. Development of Milk Value for Different Product Outlets in the EU, Jan 2001 to May 2011

Figure 3. Gouda Cheese Margin Developments, Jan 2007 to May 2011 Figure 4. Brand Share of Leading Cheese Suppliers in EU, 2002 to 2009 Figure 5. Volume Developments in Europe’s Main Export Markets, 2002 to 2010 Figure 6. Average Export Value for Cheese, Selected Countries, 2010 Figure 7. Cheese Imports by Region, Europe’s Main Cheese Export Destinations, 2002 to

2010

6. CHEESE MARKET OVERVIEW OF THE UNITED ARAB EMIRATES Table 25. Spreadable Processed Cheese by Type in the UAE: % Value Breakdown Table 26. Sales of Cheese by Distribution Format in the UAE Table 27. Cheese Company Shares in the UAE Table 28. Sales of Cheese by Category in the UAE Graph 8. Sales of Cheese in the UAE Table 29. UAE Imports of Cheese and Curds Table 30. UAE Exports of Cheese and Curds Table 31. Forecast Sales of Cheese by Category in the UAE

7. CHEESE MARKET OVERVIEW OF SAUDI ARABIA Graph 9. Cheese and Fresh Cows' Milk Production in Saudi Arabia Graph 10. Per Capita Production of Cheese in Saudi Arabia Table 32. Spreadable Processed Cheese by Type in Saudi Arabia: % Value Breakdown Table 33. Unprocessed Cheese by Type in Saudi Arabia: % Value Breakdown Table 34. Sales of Cheese by Distribution Format in Saudi Arabia Table 35. Cheese Company Shares in Saudi Arabia Table 36. Sales of Cheese by Category in Saudi Arabia Graph 11. Sales of Cheese in Saudi Arabia Table 37. Cheese and Curd Imports by Saudi Arabia Table 38. Cheese and Curd Exports of Saudi Arabia Table 39. Forecast Sales of Cheese by Category in Saudi Arabia

8. CHEESE MARKET OVERVIEW OF ALGERIA Table 40. Spreadable Processed Cheese by Type in Algeria: % Value Breakdown Graph 12. Cheese & Fresh Cows' Milk Production in Algeria Table 41. Sales of Cheese by Distribution Format in Algeria Table 42. Cheese Company Shares in Algeria Table 43. Sales of Cheese by Category in Algeria Graph 13. Sales of Cheese in Algeria Table 44. Cheese & Butter Imports Comparison in 2010 and 2011 Table 45. Cheese and Curds Imports of Algeria Table 46. Cheese and Curds Exports of Algeria Table 47. Forecast Sales of Cheese by Category in Algeria

9. CHEESE MARKET OVERVIEW OF EGYPT Graph 14. Per Capita Production of Cheese in Egypt Table 48. Spreadable Processed Cheese by Type in Egypt: % Value Breakdown Table 49. Unprocessed Cheese by Type in Egypt: % Value Breakdown Graph 15. Production of Fresh Cows' Milk & Cheese in Egypt Table 50. Sales of Cheese by Distribution Format in Egypt Table 51. Cheese Company Shares in Egypt


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Table 52. Sales of Cheese by Category in Egypt Graph 16. Sales of Cheese in Egypt Table 53. Cheese and Curds Imports of Egypt Table 54. Cheese and Curds Exports of Egypt Table 55. Forecast Sales of Cheese by Category in Egypt

10. Cheese & Cheese Product Labeling Guidelines Table 56. Common or Usual Names for Typical Ingredients Used in Dairy Products


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Definition of Cheese

Cheese is a foodstuff made from curdled milk of various animals including cows, goats, sheep and water buffalo. Rennet is often used to induce milk to curdle, although some cheeses are curdled with acids like vinegar or lemon juice. Rennet is an enzyme obtained traditionally from the stomach lining of bovine calves, but more frequently in modern times a microbiological (laboratory produced) substitute is often used. Bacteria are added to cheese to reduce the pH and develop flavor, and some cheeses also have molds, either on the outer skin. Cheese colors range from snow white to deep yellow. In some parts of the world, such as Wisconsin in the USA, the milk fat is low in beta-carotene making the cheese a paler yellow than normal. In this case it is common to add annatto plant dye as a coloring agent. As a response to the loss of diversity in mass-produced cheeses, a cottage industry has grown up around home cheese making in some locations.

Major Classes of Cheese

• white molde (e.g. Camembert) • blue mold cheese (e.g. Roquefort) • red surface bacteria cheese (all "stinky" cheeses) • hard grating cheeses (e.g. parmesan) • cheese with eyes (e.g. Swiss, or Emmental) • pasta filata cheese (e.g. Mozzarella) • hard cheese (e.g. Cheddar) • semi-hard cheese (e.g. Edam and Gouda) • soft, unripened cheese (e.g. cottage) • whey cheeses (e.g. Brunost, Mysost, and Gjetost)

Etymology

The word “cheese” comes from Latin “caseus” from which the modern word “casein” is closely derived. The earliest source is from the proto-Indo-European root “kwat” that means “to ferment, become sour”.

http://www.guajara.com/wiki/en/wikipedia/c/ca/camembert.html

http://www.guajara.com/wiki/en/wikipedia/r/ro/roquefort_cheese.html

http://www.guajara.com/wiki/en/wikipedia/p/pa/parmigiano_reggiano.html

http://www.guajara.com/wiki/en/wikipedia/s/sw/swiss_cheese.html

http://www.guajara.com/wiki/en/wikipedia/m/mo/mozzarella_cheese.html

http://www.guajara.com/wiki/en/wikipedia/c/ch/cheddar_cheese.html

http://www.guajara.com/wiki/en/wikipedia/e/ed/edam_cheese.html

http://www.guajara.com/wiki/en/wikipedia/g/go/gouda_cheese.html

http://www.guajara.com/wiki/en/wikipedia/c/cu/curd.html

http://www.guajara.com/wiki/en/wikipedia/g/gj/gjetost_cheese.html


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Harmonized System Codes (HS Code) for Cheese 0406 Cheese and Curd 040610 Fresh cheese “unripened or uncured cheese,” including whey cheese

and curd 040620 Grated or powdered cheese 040630 Processed cheese not grated or powdered 040640 Blue-veined cheese and other cheese containing veins produced by

“Penicillium roqueforti” 040690 Cheese (excluding fresh cheese, including whey cheese, curd,

processed cheese, blue veined cheese and other cheese containing veins produced by “Penicillium roqueforti” and grated or powdered cheese)

Fast Facts about Cheese

Archaeological surveys show that cheese was being made from the milk of cows and goats in Mesopotamia before 6000 B.C.

There are more than 400 kinds of cheese and over 2000 names.

Cheese is one of the most concentrated sources of key nutrients, including calcium, protein, phosphorus and vitamins A, B12 and D.

It takes 10 pounds of milk to make 1 pound of cheese.

Cheese was once used as money.

The first commercial cheese factory was founded on February 3, 1815 in Switzerland.


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WORLD CHEESE MARKET OVERVIEW

EXECUTIVE SUMMARY

The history of cheese is as old as the human species and is linked to the taming

of domestic animals 10,000 years B.C.

The Dutch have been producing cheese since 400 A.D. It is believed that cheese

has originated in Mesopotamia, where it was produced approximately 8,000 years ago.

Cheese, an age old dairy delicacy prepared from milk of sheep, goat or cow continues

to be a popular addition to every day meal, thanks to the high amount of protein,

calcium, minerals and vitamins it contains. The consumption of cheese, has improved

significantly across the world over the years and subsequently the art of cheese

making has now evolved into a lucrative business. Consequently, the international

cheese trade started to increase on a regular basis.

MARKET OVERVIEW

Several countries experience a significant growth in cheese production. Cheese

manufacturing in South America (particularly in Brazil and Argentina) is increasing.

Whereas EU milk production is constrained by the Common Agricultural Policy and the

milk quota system, which also limits the scope for increase in cheese production.

The Australian and New Zealand milk production has expanded tremendously for

years, resulting rapid growth in cheese production and exports. Russia and Ukraine

seem to regain some of their former production strength.

Despite the economic recession has put a check on the cheese consumption

pattern across the world and mostly in the developing nations, the future outlook for

global cheese market still remains bright with consumption of cheese projected to

grow by more than 20% during 2008-2015. Purchasing decisions, being increasingly

guided by price (cheaper yet healthy) and wholesome foods are taking their place

somewhere in the centre of the consumers’ demands. Consumers are additionally

exhibiting shifting preferences from imported cheese brands to locally produced


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cheese. Post recession, the demand for organic cheese is slated to make a comeback

and the manufacturers expand their production supplies.

Innovation and product diversification will be the most prominent market

strategies for manufacturers and suppliers in the post recession period. The product

mix is poised to change from traditional types of cheeses to new cheeses that suit the

demand in developing dairy markets like China and India. The growing demand for

dairy products that meet consumers changing nutritional needs will result in the strong

growth for innovative and healthier cheese products, such as lactose-free goat cheese

products or half-fat and reduced fat cheeses.

Europe and the United States lead the global cheese market by consumption.

However, the global cheese industry now shifts towards emerging markets such as Asia

Pacific and Latin America. Cheese consumption in developed economies will be fraught

by challenges, such as a matured market profile, limited growth in population and

most importantly the fast aging population, which account for lesser per capita

consumption than younger generation. Therefore, any further development in cheese

consumption within these markets is likely to be marginal and only associated with

changes in form and type of dairy products consumed. Meanwhile, developing markets

such as Asia, Latin America and the combined market of Middle East and Africa, are

projected to display superior growth rates over the period of 2006-2015. Large

population and rising incomes in these nations will prove to be the major driving

factors for exceptional growth in dairy consumption and cheese is bound to feel the

trickling down effect of the forecasted sanguine business conditions in the upstream

dairy industry.

The graph below represents the percentage breakdown of world dairy

production for 2011.


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Source: www.portal.euromonitor.com

The percentage breakdown of world dairy production for 2011 shows that 94%

of dairy production is fresh cows’ milk, and 3% — cheese production.

The graph below gives the opportunity to compare the world dairy production

with the one in Europe and Russia.


Dairy production in Europe has not changed seriously since 2006. This refers to

the Russian diary production by and large. Conversely, the world dairy production has

a growing trend. During 6 years since 2006 the dairy production has increased by

approximately 9%.

Key players operating in this market include Arla Foods, amba.; Belaya Reka

Holding; Bongrain, SA.; Belgioioso Cheese, Inc.; Crystal Farms Cabot Creamery

1% 3% 1%

1%

94%

Pie Chart 1. World Dairy Production for 2011

Production of Butter & Ghee

Production of Cheese

Production of Dried Cows' Milk

Production of Evaporated Milk

Production of Fresh Cows' Milk

2006 2007 2008 2009 2010 2011

World 589099.8 602852 614381.4 617618 631177.4 640079

Europe 236324.8 236355.9 236939 235144.9 236452.4 236928.9

Russia 32315.2 33066.4 33269.7 33419.3 32951.7 33118.3

0100000200000300000400000500000600000700000

thsd

tons

Graph 1. Dairy Production

http://www.portal.euromonitor.com/



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Cooperative, Inc.; Dairy Farmers of America, Inc.; Derivados De Leche La Esmeralda;

Dairy Crest Group, Plc.; Fonterra Group Cooperative Limited; Fromageries Bel, SA.;

Groupe Danone, S.A.; Great Lakes Cheese Company, Inc.; Grupo Industrial Lala, S.A. de

C.V.; Kraft Foods, Inc.; Land O' Lakes, Inc.; Leprino Foods Company, Inc.; Lactalis

McLelland, Ltd.; Meiji Dairies, Corp.; North Downs Dairy Co, Ltd.; Parmalat, S.p.A.;

Snow Brand Milk Products Co, Ltd.; Sancor Cooperativas Unidas Limitada; Saputo, Inc.;

Specialty Cheese Co, Inc.; Tillamook County Creamery Association; Valio Ltd.; Wyke

Farms, Ltd.; Wisconsin Cheese Group Inc., etc.

The table below represents the cheese production during the period of 2006-

2011.

Table 1. World Production of Cheese thsd tons

Country/Country Group Years

2006 2007 2008 2009 2010 2011 World 18962.1 19753.8 19914.9 19980.7 20544.7 20873.8 Asia Pacific 589.3 586.4 608.6 620.2 630.2 639.5 China 274.8 261.1 276.5 276.9 277.5 278.1 Japan 124.9 125.4 118.3 122.1 125.0 125.1 Armenia 14.7 16.9 17.3 17.5 17.1 17.7 Eastern Europe 2188.5 2269.7 2294.3 2320.3 2328.7 2361.6 Russia 587.0 602.6 602.2 614.2 603.4 607.5 Poland 579.7 594.2 594.1 633.5 664.2 685.3 Ukraine 234.5 263.9 253.6 248.3 239.0 233.2 Georgia 0.1 0.1 0.1 0.0 0.0 0.0 Middle East and Africa 1581.3 1822.0 1892.3 1785.7 1770.8 1817.5 Egypt 733.8 941.8 1039.1 940.2 940.2 966.0 Iran 293.3 300.6 254.6 275.9 271.8 267.7 Saudi Arabia 87.5 87.5 127.5 167.5 167.5 179.5 Western Europe 7930.5 8045.9 8030.4 8003.3 8158.4 8212.3 Germany 1971.1 1995.1 1991.6 2030.5 2078.4 2105.2 France 1827.8 1869.2 1860.6 1834.0 1897.7 1915.2 Italy 1121.9 1141.0 1147.2 1183.6 1173.9 1186.8 Netherlands 713.0 730.3 721.7 712.1 740.0 746.8


The cheese production in the world has a growing trend and despite the crisis,

it goes on rising. The figures above prove that the global financial crisis in 2009 has left

out the world cheese production. Moreover, in 2009 the world cheese production

increased by 65.8 thousand tons over the previous year, and by 564 thousand tons in



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2010 over 2009. In 2011, the world cheese production accounted 20873.8 thousand

tones which excels the production of the previous year by 329.1 thousand tons.

The following table shows top cheese producers in terms of tonnage.

Table 2. Top Cheese Producers Country thsd tons

United States 4275 Germany 1927 France 1884 Italy 1149 Netherlands 732 Poland 594 Brazil 495 Egypt 462 Argentina 425 Australia 395

Source: USDA, Food and Agricultural Organization

The US is a leader (4,275 thousand tons) in cheese production as the table above shows. The second and third places belong to Germany (1,927 thousand tons) and France (1,884 thousand tons).

The graph below represents the world cheese production volumes more

clearly.


2006 2007 2008 2009 2010 2011

World 18962.1 19753.8 19914.9 19980.7 20544.7 20873.8

18000

18500

19000

19500

20000

20500

21000

21500

thsd

tons

Graph 2. World Cheese Production



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The graph above shows that the world cheese production has the trend of

growth. In contrary, the per capita cheese production has remained comparably

constant. The table below can be set as a proof to it.

Table 3. Per Capita Production of Cheese kg

Country/Country Group Years

2006 2007 2008 2009 2010 2011 World 2.9 3.0 3.0 2.9 2.9 2.9 Asia Pacific 0.2 0.2 0.2 0.2 0.2 0.2 Azerbaijan 5.2 5.2 6.0 6.0 6.1 6.2 Armenia 4.8 5.5 5.6 5.7 5.7 5.7 Tajikistan 1.9 2.1 2.2 2.3 2.4 2.5 Eastern Europe 6.6 6.8 6.9 7.0 7.0 7.0 Lithuania 25.9 23.5 27.1 22.9 23.4 24.2 Poland 15.2 15.6 15.6 16.6 17.4 17.9 Belarus 11.8 12.5 14.4 15.1 16.4 17.3 Latvia 9.8 10.2 10.4 12.6 15.0 16.2 Russia 4.1 4.2 4.2 4.3 4.2 4.3 Georgia 0.0 0.0 0.0 0.0 0.0 0.0 Middle East and Africa 1.4 1.6 1.6 1.6 1.5 1.5 Israel 18.2 18.2 18.0 16.9 16.6 16.2 Egypt 10.1 12.7 13.7 12.2 11.9 12.0 Saudi Arabia 3.6 3.5 5.1 6.5 6.4 6.7 North America 15.3 15.4 15.5 15.6 16.0 16.2 Canada 11.9 12.3 11.9 11.6 12.2 12.3 USA 15.7 15.8 16.0 16.1 16.4 16.6 Western Europe 16.8 17.0 16.8 16.7 16.9 16.9 Denmark 61.7 63.5 60.6 58.2 52.8 50.9 Netherlands 43.7 44.6 44.0 43.2 44.6 44.8 Ireland 33.4 33.4 40.5 37.4 39.3 40.9 France 29.8 30.2 29.9 29.4 30.2 30.3 Iceland 28.5 29.9 31.4 29.1 28.6 28.7 Germany 23.9 24.4 24.2 24.8 25.4 25.8 Switzerland 26.2 26.1 26.3 25.8 25.9 25.8 Austria 22.8 23.2 23.0 22.6 23.5 23.6 Italy 19.1 19.3 19.2 19.7 19.5 19.6


The only reason that the world per capita production of cheese has remained

stable is the population growth as the production volumes has increased.

The table below shows top cheese consumers.



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Table 4. Top Cheese Consumers (kg per capita)

Country kg Greece 31.1 France 26.1 Iceland 25.4 Germany 22.6 Switzerland 21.4 Netherlands 21 Italy 20.9 Finland 20.7 Turkey 19.4 Sweden 18.9 Austria 17.4 Czech Republic 16.7 Israel 16.4 Norway 15.3 United States 14.8 Canada 12.3 Australia 12 Argentina 11.3 Hungary 11 United Kingdom 10.9 Poland 10.8


Per capita cheese consumption heads Greece with 31.1 kg. The second place

belongs to France (26.1 kg), and the third one belongs to Iceland (25.4 kg).

The table below shows top cheese exporters.

Table 5. Top Cheese Exporters in Monetary Value Country USD

France 2,658,441,000 Germany 2,416,973,000 Netherlands 2,099,353,000 Italy 1,253,580,000 Denmark 1,122,761,000 Australia 643,575,000 Belgium 567,590,000 Ireland 445,240,000 United Kingdom 374,156,000



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The top heads France with USD 2,658,441,000 exports of cheese. The second and third places belong to Germany (USD 2,416,973,000) and Netherlands (USD 2,099,353,000).

The consumer trends of dairy production in developing and developed markets are undoubtedly different; the needs of the developed markets depend mostly on food quality and the one of the developing markets depend mostly on its availability and convenience. More detailed view of both markets’ peculiarities is represented below.

The inclination towards healthier lifestyle makes the representatives of the developed markets require healthy food of organic origin. For convenience, it is preferable that the production may be consumed both by adults and children. Convenience implies the package formats.

The preferences of the developing markets’ representatives are different. Affordability and the attempts to combine low price, nutritional aspects of food and quality are the main peculiarities of the developing markets. Westernization and preference for foreign goods can also affect on these markets.

CONCLUSION

Among the dairy commodities, cheese prices have traditionally been more

stable — reflecting the wide variety of cheese available, each with its own distinct

characteristics making it less subject to the same degree of supply and demand

fluctuation as the standardized products, such as milk powder or butter. For most of

2011, cheese prices (cheddar) stayed within the range USD 4,400 to USD 4,500 per ton.

However, in October, they began to follow the downwards of other dairy products,

Chart 1. Consumer Trends in Dairy Production

DEVELOPED MARKETS

• Health • Products Both for Kids and

Adults • Authenticity • Provenance • Convenience

DEVELOPING MARKETS

• Affordability • Nutrition • Quality at Low Price • Westernization • Preference for Foreign

Goods


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and have remained around USD 4,000 per ton since until March. In April, prices

registered a further fall, to USD 3,700. Trade in cheese is forecast to grow by 3.1% in

2012, to 2.5 million tons, sustained by robust import demand. The world cheese

market is the most difficult dairy market to classify. One apparent anomaly is that a

number of major cheese producing and exporting countries are also important

importers, including (in order of volume) the United States, Australia, the EU and

Switzerland. Most often, purchases by this group of countries reflect import quotas

under trade agreements and also the highly specific nature of some cheeses, including

those with restrictions on the use of their names and areas of origin. Elsewhere,

several of the most important cheese importers, including the Russian Federation,

Japan, Egypt, Saudi Arabia, the Republic of Korea and Mexico, focus more on industrial

cheese, both for direct consumption and for use by the processing industry. The EU

remains the major cheese exporter, accounting for almost 30% of world trade, which

does not include the substantial amount of cheese that is traded among the EU

countries themselves. Other important exporters are Saudi Arabia, New Zealand, the

United States, Egypt, Australia, Belarus, Ukraine, Argentina, Switzerland, Uruguay and

Turkey.

REFERENCES

www.portal.euromonitor.com

USDA, Food & Agricultural Organization



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ARMENIAN CHEESE MARKET BRIEF OVERVIEW

BRIEF OVERVIEW

Armenians have traditionally regarded cheese as an essential part of their diet. The art of cheese making is a carefully protected tradition. Armenians eat cheese at breakfast and as appetizer.

Despite the difficulties in cheese industry in Armenia, the producers do their best for making the production competitive in the market, and the entrepreneurs are investing much capital and energy in this time-honored industry. The farmers have been using summers for centuries in the high Alpine meadows to benefit from the lush meadows for milk production.

The most common types of Armenian cheeses are Lori and Chanakh. Both are salty, white cheeses aged in brine water. Lori, Chanakh, Suluguni, Mozzarella, Chechil, Smoked Chechil, Havarti, Holland, Cheddar, Emmental, Tashir, Camembert, Tomme and Blue cheeses are made from cow milk.

Another popular type of Armenian cheese is the String cheese. The strings are formed because of the special technology of pulling the cheese during processing.

Sheep cheeses have also been produced for centuries in Armenia. Kateh, Pemaggio and Blue cheeses are made from sheep milk.

MARKET DATA

For 2008-2011, the average production of cheese in Armenia amounted to 17.3 thousand tons. Despite the domestic milk production volumes decreased in 2009, the production volumes of cheese increased.

In 2011, the volumes of cheese production increased by 2.8% (in volume) over the 2010 record. In January-October 2012, the production volumes amounted to 15385.1 tons which is 0.2% more than the production volume of the relevant period of 2011 (see the table below).

Table 6. Production of Cheese and Milk in Armenia

Production Measuring Unit

2008, Jan-Dec

2009, Jan-Dec

2010, Jan-Dec

2011, Jan-Dec

2012, Jan-Oct

Cheese tons 17311.7 17464.7 17047.1 17525.0 15385.1 Milk mln liters 313.1 286.9 299.9 301.3 301.8

Source: www.armstat.am

According to the National Statistic Service data of Armenia, an average annual per capita consumption of cheese in Armenia is about 11 kilo.

http://www.armcheese.com/lori.html

http://www.armcheese.com/chanakh.html

http://www.armcheese.com/sheepcheeses.html

http://www.armstat.am/


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Table 7. Average Annual Per Capita Consumption of Cheese (of all types) in Armenia

kg

2008, Jan-Dec 2009, Jan-Dec 2010, Jan-Dec 2011, Jan-Dec 12.7 12.2 9.5 9.8


The pricing of cheeses and milk in Armenia is represented in the table below. The prices for cheese are correlated with the prices of milk. For 2007-2012, the average retail price for milk in Armenia amounted to AMD 323.2.

In 2012, the retail price of cheese “Chanakh” decreased by 9% over the previous year. And the retail price of cheese “Lori” decreased by 9.3% in 2011 over the 2010 record.

Table 8. Average Prices of Cheese and Milk in Armenia

Product Measuring Unit 2007 2008 2009 2010 2011 2012

Cheese "Chanakh" AMD per kilo 1403 1456 1461 1563 2019 1838 Cheese "Lori" AMD per kilo 1565 1641 1662 1795 2367 2148

Milk AMD per litre 296 304 326 328 342 343 Source: www.armstat.am

FOREIGN TRADE

The foreign trade of cheese and milk in Armenia is displayed in the table below.

Table 9. Foreign Trade of Cheese and Milk in Armenia tons

Category 2007 2008 2009 2010 2011 2012

Exports of Cheese 567.2 473.8 336.9 496.4 439.8 903.6 Imports of Cheese 877.3 760.0 569.1 725.8 1019.2 1056.2 Imports of Milk (all types) 5224.4 3494.0 4167.7 3636.1 3507.2 3066.5


In 2011, the imports of cheese exceeded the exports by almost 2.3 times and by 1.2 times in 2012. On average, about 536.3 tons of cheese has been exported from Armenia and 834.6 tons has been imported from Armenia annually since 2007. The volume of imported milk is on average 3849.3 tons annually.


21 | Page

The exports of cheese has almost doubled in 2012 in compaison with 2011 figure.

The figures for the Armenian exports of cheese and curds by countries are represented in the table below.

Table 10. Armenian Exports of Cheese and Curds by Countries

Country Measuring Unit 2010 2011 2012

USA tons 95.9 69.7 36.2

thsd USD 474.8 353.9 183.9

UAE tons 3.2 1.3 0.8

thsd USD 21.8 12.7 6.8

Netherlands kg 16.6 — —

thsd USD 0.1 — —

Ukraine kg 85.7 — —


Russia tons 393.5 368.9 859.4

thsd USD 1181.2 1488.4 2113.1

Georgia tons 3.8 — 7.3

thsd USD 10.1 — 31.6 Source: www.customs.am

The volumes of exports of cheese and curds from Armenia to Russia have a growing trend. In 2011, the exports of cheese and curds to Russia increased by 26% in value and decreased by 6.3% in volume over the 2010 record. This discrepancy occurred due to prices.

Table 11. Armenian Imports of Cheese and Curds by Countries

Country Measuring Unit 2010 2011 2012

USA tons 0.4 — 2.2

thsd USD 3.8 — 18.6

Austria tons — 1.4 6.2

thsd USD — 4.9 35.8

Belarus tons 4.3 5.7 1.9

thsd USD 23.8 33.1 12.9

Belgium tons 1.6 — —


Bulgaria tons 10.3 28.4 6.6

thsd USD 36.9 72.4 24.3

Germany tons 333.3 420.4 378.3

thsd USD 2020.4 2786.6 2429.3

Denmark tons 11.6 16.6 9.8

thsd USD 83.2 142.5 68


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Ireland tons — 20 —

thsd USD — 68 —

Italy tons 8.3 13.9 20.2

thsd USD 89.8 154 172.5

Spain tons — — 0.006

thsd USD — — 0.1

Iran tons — 9.2 5.6

thsd USD — 31.8 19.4

Poland tons 16.2 20.3 12.9

thsd USD 81.9 106 64.1

Lithuania tons — 4.8 5.8

thsd USD — 30.7 37.1

Greece tons 2.3 2 2.1

thsd USD 19.6 20.4 20.7

Morocco tons 0.03 — —


UK tons — 0.154 0.022

thsd USD — 3.2 0.7

Netherlands tons 8.8 6.3 5.8

thsd USD 59.5 53.5 46.6

New Zealand tons 9.4 79.2 343

thsd USD 33.2 269.3 1193.8

Switzerland tons 6 0.01 0.002

thsd USD 20.7 0.3 0

Ukraine tons 49.4 84.4 23.9

thsd USD 168.8 282 76.3

Czech Republic tons — — 0.015

thsd USD — — 0.1

Romania tons 26.3 29.3 —

thsd USD 91 97 —

Russia tons 194.9 213 162.6

thsd USD 882.4 1052.7 791.4

Serbia tons — 0.28 0.788

thsd USD — 2.4 4.3

Slovakia tons — — 0.002

thsd USD — — 0

Finland tons 41.1 57.5 59.2

thsd USD 179.7 303.2 327.4

France tons 1.8 6.5 9.2

thsd USD 33.7 79.9 90.6 Source: www.customs.am


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REFERENCES

www.armstat.am

www.customs.am

http://www.armcheese.com/armcheeses.html

RUSSIAN CHEESE MARKET OVERVIEW

EXECUTIVE SUMMARY

Dairy products are one of the most popular and important goods for the

Russian population. One of these main products is cheese. According to statistics

cheese is a daily ration of most Russians. In Soviet Union only solid and melting cheese

were presented in Russia, and the range was poor.

In the early 1990's, cheese market was considerably changed and variety of cheese

kinds has appeared: moldy cheese, cheese with various additions (nuts, ham, paprika,

mushrooms, etc.) and many others.

Geographically, cheese producers in Russia are mainly located in Ural, Volga

and West Siberian regions. These regions produce more than half of total cheese

volume.

The problems existing in the Russian cheese market are as follows:

• raw material base downturn, which was due to the large reduction of livestock and raw milk production;

• lack of normal standards of quality of milk, which significantly impairs the quality of cheese.

Therefore, imported cheeses have an advantage over the Russian cheeses in terms of quality.

DOMESTIC PRODUCTION VOLUMES

The pie chart below represents the percentage breakdown of the dairy

production in Russia for 2011.

http://www.armstat.am/

http://www.customs.am/

http://www.armcheese.com/armcheeses.html


24 | Page


The percentage breakdown of the Russian dairy production shows that 97% of

dairy production belongs to fresh cows’ milk. Production of cheese accounts 2%.

Despite the crisis, the cheese production volumes have not suffered a lot. Just

vice versa. The cheese production reached a peak in 2009. It increased by almost 2%

over the previous year. The following year was a year of decrease, but in 2011 the

trend of growth became obvious.


0%2%

0%1%

97%

Pie Chart 2. Dairy Production in Russia for 2011






2006 2007 2008 2009 2010 2011

Russia 587.0 602.6 602.2 614.2 603.4 607.5

570.0575.0580.0585.0590.0595.0600.0605.0610.0615.0620.0

thsd

tons

Graph 3. Cheese Production Volumes of Russia




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The per capita cheese production of Russia is portrayed below.


The graph above shows that the per capita production of cheese in Russia is

higher than the one in the world. The figures prove that the deviation of the Russian

and world cheese productions amounts to circa 1.3 kilos. This means that the Russian

cheese production betters the one of the world by approximately 1.3 kilos.

Russia is a prime destination for European cheese, absorbing almost one third of total

EU exports.

According to analysts, the segment of cheese made in Russia can grow only at

the expense of the protectionist policy of the state.

To support Russian manufacturers, cheese customs duties were increased in 2011.

While a regressive scale was previously in effect (the duty amount reduced as the

product price grew), a flat rate in the amount of 15% of the cheese customs value but

not less than 0.5 euro per 1 kg was introduced.

Traditionally hard yellow cheeses such as Edam, Maasdam, Gauda and

Gollandsky dominate the Russian unprocessed cheese category, accounting for an

expected combined share of 66% in 2011, with value-added variants such as Gauda

and Maasdam set to see slight increases in share to 8% and 7% respectively. However

Gollandsky, with a 44% share in 2011, is set to see share fall to the benefit of new

types of cheese with higher average unit price. At the end of the review period the

growth in share of soft cheese was being driven by an increase in consumption of

2006 2007 2008 2009 2010 2011

World 2.9 3.0 3.0 2.9 2.9 2.9

Russia 4.1 4.2 4.2 4.3 4.2 4.2

kgGraph 4. Per Capita Production of Cheese in Russia



26 | Page

premium imported cheese brands and by the development by local manufacturers of

economy and mid-priced variants.

The most preferential for Russians are natural cheeses, which are more

healthful. According to analysts, Russian buyers prefer hard-pressed cheese; 41% of

the population purchases this product most often — once or twice a week on the

average.

In the light of this, packaged hard cheese sees the fastest growth, both in

volume and current value terms. The collaboration of packaged hard cheese

manufacturers with leading chained retailers, in addition to the development of

modern retail formats, has made packaged hard cheese more widely available. Many

customers have realized the convenience of this product type and opted for it even

though the unit price is higher than unpackaged hard cheese.

Processed cheese takes only about 1/4 of retail sales in value terms.

The overall growth of the Russian economy accelerates the pace of life, and the

consumer is running out of time to buy food in stores.

Popularity of cheeses with a spicy and rich taste, especially those varieties that

are made from goats and buffaloes milk is grown. Feta cheese and Brynza is also in

demand. This group of cheeses is growing mainly due to import. For example, cheeses

with mold or blue cheese, come mainly from France and Germany. The most popular

are blue cheeses in Russia, such as Roquefort, Seint Agur and Dor Blue.

The share of private label segment of the Russian cheese market is still very

small. A great share of the market belongs to segment of natural cheeses, and private

brands are mainly represented in fused cheese segment. In this situation, retail chains

brands have difficulties in supporting of visible presence. Nevertheless, growth of

private label segment, which will take а place as market saturation, can be expected.

The tables below represent percentage value breakdowns of spreadable processed

cheeses and unprocessed cheeses by type.


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Table 12. Spreadable Processed Cheese by Type in Russia: % Value Breakdown % retail value rsp

Cheese Type Years

2006 2007 2008 2009 2010 2011 Cream Cheese 22.0 24.5 25.5 25.0 25.5 26.5 Reconstituted Cheese 78.0 75.5 74.5 75.0 74.5 73.5 TOTAL 100.0 100.0 100.0 100.0 100.0 100.0


We can see that the reconstituted cheeses are less preferable than the cream

ones despite the fact that the share of the cream cheeses has increased dramatically

and the share of the reconstituted cheese has decreased. Nevertheless, the share of

the cream cheeses in Russia is less than the one of the reconstituted cheeses. This

phenomenon occurs mainly because the population in the world tends to lead a

healthier life. The point is many types of cream cheeses have fewer calories than

reconstituted cheeses.

The following table refers to unprocessed cheeses in Russia.

Table 13. Unprocessed Cheese by Type in Russia: % Value Breakdown

% retail value rsp

Cheese Type Years

2009 2010 Brie 3.5 3.6 Brynza 5.0 4.8 Camembert 3.0 3.3 Edam 6.0 7.3 Feta 4.0 4.3 Gauda 6.2 7.4 Gollandsky 44.5 44.0 Maasdam 6.2 6.8 Mozzarella 1.5 1.3 Others 20.1 17.2 TOTAL 100.0 100.0





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Gollandsky cheese has been the most popular among the unprocessed cheeses

in Russia. It includes about 44% share. The shares of all the unprocessed cheeses have

increased during 2009-2010 except for Brynza, Gollandsky and Mozzarella.

KEY MARKET TRENDS

In summer 2011 new procedures regulating trade between Russia, Belarus and

Kazakhstan came into force. From 1 July 2011, all borders between the three states

were effectively removed, thereby facilitating faster and easier trade, which in turn is

impacting many product categories including cheese. Belarusian manufacturers who

benefited from the advantage of lower commodity milk prices and labor costs,

alongside favorable import VAT terms for imports, started expanding into the Russian

market. However, the rise in supply and fall in price at manufacturer level did not

cause retail prices to decrease.

While all cheese categories saw growth during the review period, packaged

hard cheese saw the fastest growth, both in volume and current value terms. The

collaboration of packaged hard cheese manufacturers with leading chained retailers, in

addition to the development of modern retail formats, made packaged hard cheese

more widely available. Many customers realized the convenience of this product type

and opted for it even though the unit price is higher than unpackaged hard cheese. In

2011 soft cheese is expected to enter a new stage of development, with many

manufacturers launching production facilities in Russia for this product; this increased

focus on soft cheese is due to the low level of competition in the category, the

relatively short production cycle and increased competition in other categories.

FOOD RETAIL SECTOR AND THE LARGEST CHEESE PRODUCERS

The structure of the Russian retail food market has also undergone major

change in the past ten years, though it is still highly fragmented, with the majority of

modern retail grocery stores located in the major urban areas of Moscow and St.

Petersburg. The main distribution channels for food have become supermarkets and

hypermarkets both domestic and foreign owned (Planet Retail, 2009). In Moscow the

leading retailers are X5 Retail Group, Dixi, Kopeika and Sedmoi Kontinent. In St

Petersburg the leading retailers are X5 Retail Group, Lenta and O'Key.


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The table below represents the sales of cheese by distribution format.

Table 14. Sales of Cheese by Distribution Format in Russia % retail value rsp

Distribution Format Years

2006 2007 2008 2009 2010 2011 Store-Based Retailing 100.0 100.0 100.0 99.9 99.8 99.8

*Grocery Retailers 85.0 83.0 85.2 90.7 90.8 93.3 **Supermarkets/Hypermarkets 22.5 26.5 32.5 39.0 45.0 53.0

**Discounters - - - - - - **Small Grocery Retailers 47.5 46.5 45.7 45.2 39.2 34.3

***Convenience Stores 6.5 7.5 8.5 9.0 10.0 11.0 ***Independent Small Grocers 41.0 39.0 37.0 36.0 29.0 23.0

***Forecourt Retailers - - 0.2 0.2 0.3 0.3 **Other Grocery Retailers 15.0 10.0 7.0 6.5 6.5 6.0

*Non-Grocery Retailers 15.0 17.0 14.8 9.2 9.1 6.6 **Health and Beauty Retailers - - - - - -

**Other Non-Grocery Retailers 15.0 17.0 14.8 9.2 9.1 6.6 Non-Store Retailing - - - 0.1 0.2 0.2

*Vending - - - - - - *Home Shopping - - - - - -

*Internet Retailing - - - 0.1 0.2 0.2 *Direct Selling - - - - - -

TOTAL 100.0 100.0 100.0 100.0 100.0 100.0 Source: www.portal.euromonitor.com

Convenience Stores

Convenience stores have gradually been replacing traditional small Russian

outlets. The domestically owned leaders are Lukoil and TNK-BP. There are only a

couple of international operators in the convenience store sector. The Global

economic crisis has affected the development of the modern retail sector, with many

expansion projects being put on hold (Planet Retail, 2009).

Supermarkets

Supermarkets are the leading food channel in Russia and are dominated by

domestic retailers. The market leader is X5 Retail Group with over 1,600 outlets in St

Petersburg, Moscow and the Ural region. Its retail banners are discount Pyaterochka

supermarkets and larger Perekrestok supermarkets (Planet Retail, 2009).



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Hypermarkets

Hypermarkets are generally located in the suburban areas of the larger cities. In

Moscow, the foreign owned market leaders are Auchan, Metro groups “Real Stores”,

Lotte department stores, Globus and SOK's Prisma outlets. Domestic retailers in the

hypermarket sector are Lenta, X5 Retail Group, O'Key, Mosmar, Sedmoi Kontinent,

Alpi, Magnit and Kopeika (Planet Retail, 2009). In 2009 most Russian hypermarket

operators put expansion plans on hold, with many facing liquidity problems. This may

give foreign operators opportunities to establish new stores due to fallen real estate

prices or through acquisitions of those that have come into debt (Planet Retail, 2009).

E-Commerce

Internet retailing is only just emerging in Russia. Internet usage in Russia stands

at 32% of the population with the majority of users (over 70%) in Moscow. Virtual

grocery stores are mainly limited to the Moscow region with Sedmoi Kontinent the key

player (Planet Retail, 2009).

Future Trends

Price orientated supermarkets and neighborhood stores dominated by

domestic retailers may become the fastest growing formats in the short term. The

hypermarket sector looks likely to continue domination by foreign investors such as

Auchan and Metro Group, in the major cities of St. Petersburg, Moscow and other

regional cities with above average incomes. In the long-term price oriented

supermarkets and hypermarkets formats in and around Russia's largest cities look to

be the preferred format (Planet Retail, 2009). The table below represents the company

shares occupied in cheese and/or dairy production in Russia.

Table 15. Cheese Company Shares in Russia % retail value rsp

Company Years

2006 2007 2008 2009 2010 Valio St Petersburg ZAO 9.3 7.9 7.5 8.1 9.0 Karat ZAO 5.5 5.7 5.7 4.8 4.8 Hochland Russland OOO 4.0 4.0 4.3 3.6 3.7 Wimm-Bill-Dann Produkty Pitania OAO 2.3 2.4 2.5 2.7 3.1 Käserei Champignon Hofmeister KG 2.8 2.8 2.9 2.4 2.6 FrieslandCampina Russia - - 3.3 2.3 2.5 Syr Starodubskiy TnV 2.5 2.5 2.5 2.3 2.3 Pieno Zvaigzdes AB 2.4 2.4 2.5 2.4 2.3


31 | Page

Rokiskio Suris AB 2.2 2.2 2.3 2.0 2.1 Ostankinsky Molkombinat OAO 2.1 2.2 2.2 2.2 2.1 Lactalis, Groupe 1.6 1.6 1.7 1.5 1.6 Belaya Reka OAO 1.7 1.8 1.9 1.7 1.6 Pereslavsky Molkombinat 1.6 1.6 1.5 1.4 1.4 Arla Foods Artis OOO 0.5 0.9 0.9 1.3 1.4 RostAgroExport ZAO 1.5 1.5 1.5 1.4 1.4 Nordmilch eG 1.5 1.6 1.6 1.2 1.1 Nevskie Syry Group - - - 1.1 1.1 Cherkizovsky Molkombinat OAO 2.6 2.7 2.7 2.2 1.1 Yantar ZAO 1.2 1.2 1.2 1.0 1.0 Lacto Juust AS 1.1 1.1 1.2 1.0 0.9 Fromageries Bel SA 1.3 1.3 1.2 1.1 0.8 Sevsky Maslodel ODO 0.4 0.4 0.4 0.4 0.4 Unimilk Kompania OAO 0.4 0.4 0.4 0.4 0.4 Kezsky Syrzavod OAO - 0.7 0.6 0.6 0.3 Berglandmilch GmbH 0.3 0.3 0.3 0.3 0.3 Unilever Rus OOO 0.4 0.4 0.4 0.3 0.3 Syrodel ZAO 0.4 0.4 0.4 0.4 0.3 Molochnyi Alliance OOO 0.3 0.3 0.3 0.3 0.3 Stavropolsky Molkombinat OAO 0.3 0.3 0.3 0.3 0.3 Giaginsky Maslozavod 0.2 0.2 0.2 0.2 0.2 Severnoye Moloko PTK ZAO 0.3 0.3 0.3 - - Royal Friesland Foods NV 2.9 3.1 - - - Private Label 0.6 0.7 0.8 1.0 1.0 Others 45.7 45.0 44.4 48.3 48.2 TOTAL 100.0 100.0 100.0 100.0 100.0


COMPETITION FIELD

In 2010 Valio St Petersburg ZAO led sales with a 9% value share. The company

benefited from its strong presence in most developed categories and its long-standing

presence in Russia, with local customers being familiar with Valio products since the

Soviet era. Its leading brand is Oltermanni hard cheese, which registered a 5% value

share in the category overall in 2010. Consumers believe in the high quality of Finnish

cheeses and willingly buy them. Karat ZAO held the second position and a value share

of 5% in 2010. Its generic cheese products, perceived as cheap alternatives to more

expensive cheese brands, are rather stable in their position on the market, however



32 | Page

are expected to lose popularity in the face of increased competition and a shrinking

consumer base.

Valio St. Petersburg ZAO saw the biggest increase in value share in 2010, with

value sales rising by 25%. This growth rate was faster than that seen for the cheese

category as a whole, hence its share rose by one percentage point. The company

benefited from an upturn in consumer demand, with customers opting for

conveniently packaged value-added products. As example, Russians appreciated low-

calorie or lactose-free cheeses. The strong reputation of the company and the

marketing support its brands receive are driving sales alongside the widening

distribution of the company’s products.

In 2010-2011 many players within the cheese category paid attention to

underdeveloped product areas. Soft cheese manufacturing facilities were launched in

Russia by companies such as Syr Starodubskiy TnV, Karat OAO and Giaginsky

Maslozavod. These companies are planning to focus on the low/mid-price and mid-

price segments. Soft cheese has been chosen for such development as it has a faster

production cycle but offers the same nutritional value as hard cheese. Taking into

account the relatively low level of competition in the category, this strategy can be

considered as offering good growth potential.

Strong distribution remained a key to success with large players holding the

competitive advantage over smaller companies due to their ability to meet the

challenging and large scale requirements of major retailers. Relationships with retailers

are becoming increasingly important, alongside the growth of the modern chained

retailing channel in the distribution of cheese.

Domestic manufacturers have a strong presence in the low/mid-priced and

economy segments. However with a limited product offer, they are facing growing

competition. The expansion of Belarusian manufacturers is threatening the value share

of local manufacturers. International manufacturers are gaining share in the premium

and standard segments, while in the economy segment Belarusian manufacturers are

also expected to see a significant increase in sales in 2011.

In 2011 Russia witnessed a new premium cheese launch. Groupe Lactalis

launched a new line of premium soft cheese under the Président Rondelé brand. The


33 | Page

launch is indicative of the recovery of the soft cheese category and reflects the

renewed interest of manufacturers in the premium segment.

The cheese category was the focus of a range of promotional activities at the end of

the review period. Kirill Zaytsev, a popular Russian photographer, made a series of

designs for Dziugas hard cheese brand from Zemaitijos Pienas UAB Lithuania. Yana

Churikova, a popular Russian television star, participated in the campaign. In addition,

the Sous advertising agency produced a series of television advertisements for Käserei

Champignon Hofmeister KG’s Fetaki brand; the campaign was launched in the middle

of 2011.

Private label cheese remained an underdeveloped segment, with

manufacturers making attempts to launch private label products in the mid-priced and

premium segments. However, there were no successful launches as consumers still

consider private label to represent lower quality and cannot understand how private

label cheese can possibly have a premium positioning.

CONSUMER PREFERENCES

Russian consumers think that selection of Russian yellow hard cheeses is

narrow, though exactly domestic manufacturers enjoy higher consumer credit because

domestic products are perceived as fresher, more natural and of higher quality.

Besides, consumers attribute freshness to cheeses sold by weight and store-packed

offerings. Cheeses in factory package are perceived as less fresh and more expensive.

Today about 80% of sales volume in hard cheeses is provided by unpacked products.

The attractive package is not yet a choice-driving factor for consumers on the current

stage of Russian cheese market development. However, in short-term perspective as

the market will be getting more branded the importance of package is set to grow.

Consumer choice is currently driven by sheer functionality: product exterior — color,

density, shape and piece weight; package/expiry date; price. Importance of emotional

and value attributes is only to be settled. The majority of consumers have poor

knowledge of brands offered by the market. According to consumers, this situation is

determined by lack of information and advertising, and in some cases — by

unattractive logos of manufacturers on package.


34 | Page

The share of cream cheese within spreadable processed cheese grew

significantly during the review period. Despite being more expensive than

reconstituted cheese, this tasty light cheese is gaining popularity among Russians,

especially among the urban population.

The consumer preferences are best portrayed by the volumes of sales. The

table below represents the sales of cheese by type for 2006-2011.

Table 16. Sales of Cheese by Category in Russia thsd tons

Production Years

2006 2007 2008 2009 2010 2011 Processed Cheese 122.1 131.8 135.0 137.7 142.0 148.0

Spreadable Processed Cheese 90.7 97.9 100.4 102.7 106.4 111.2 Unspreadable Processed Cheese 31.4 33.9 34.6 34.9 35.6 36.8

Unprocessed Cheese 389.9 411.7 405.0 409.0 423.0 445.5 Hard Cheese 322.3 338.6 333.4 335.1 347.5 363.8 Soft Cheese 67.7 73.2 71.6 73.9 75.5 81.7

Spreadable Unprocessed Cheese — — — — — — Cheese 512.0 543.6 540.1 546.6 565.0 593.5


The demand for unprocessed cheese is higher than the one of the processed

cheese. Among the sales of the unprocessed cheese in Russia, a dominant place takes

hard cheese.

Obviously, the crisis has had a little influence on the budget of the consumers

who prefer to have cheese on their tables. This can also be proved by the graph below

that represents only the total sales of cheese in Russia.


460.0480.0500.0520.0540.0560.0580.0600.0

2006 2007 2008 2009 2010 2011

thsd

tons

Graph 5. Sales of Cheese in Russia




35 | Page

The growing trend of the sales is obvious. A slight downturn in 2008 did not

serve as a threat for the sales to have further growth.

PRICES

One of the most important events of 2007 was moderate growth of retail prices

for cheese (8%), which was due to high prices for milk. In addition, the growing

purchasing power of the population, particularly of high-income groups, in cities such

as Moscow and St. Petersburg, provokes strong growth of premium cheese segment,

which also leads to a general rise in prices.

In premium segment in 2007, where prices are higher than 300 rubles (or circa

USD 10) per kilogram, a significant increase in value terms (by 25%) were observed.

Price increase did not reduce demand, particularly in premium segment. Wealthy

Russian consumers are willing to pay for quality. In addition, this consumer group is

less sensitive to small fluctuations in prices.

According to BusinesStat estimates, in 2006-2010 the sales volume of cheese in

Russia was steadily increasing. In 2007, even the price hike caused by the rising prices

for milk did not stop the market growth.

In 2006-2010, the prices for cheese went up by 78%. In 2010, the average price for

rennet cheese amounted to 175.6 rubles (circa USD 6) per kilo, and processed cheese

cost equaled on the average 67.8 rubles (circa USD 2) per kilo.

In 2010, unit prices saw 9% growth. The expansion of Belarusian cheese manufacturers

following the removal of trade barriers between Russia, Belarus and Kazakhstan

created opportunities for retailers not to increase prices in the low and middle price

segments. The appreciation of the local currency against the euro made it possible for

importers to avoid further price increases. However the unit price growth is set to be

stronger in 2011 than in 2010 as consumers want to taste new cheese brands and

flavors, which are usually more expensive than regular and popular yellow traditional

cheeses.


36 | Page

Prices in Russia dropped 2.8% for oils and fats (down by 1.4% in the EU), and

1.9% for dairy products, cheese and eggs (up 0.7%). According to the latest (July 2012)

data the average price of fresh cheese in Russia per 1 kilo amounts up to USD 9.281.

IMPORTS

It is difficult for Russian cheese products to compete with imports in terms of

the price to quality ratio. According to Intesco Research Group, the cheese market,

including products from Belarus stood at 763,000 tons in 2010. The market showed

growth of 7% while domestic production increased by just 2%. As a result, the market

share of imported cheese reached an all time high of 46%.

In 2005-2010, the import volume in the Russian market increased by 100

thousand tons, i.e. from 421 thousand tons to 433 thousand tons. Since 2011 the

situation has changed and the share of the domestic production on the local market

will begin to increase. The imported cheese will lose the market power due to the

protectionist policy of the Russian government toward the domestic manufacturers.

Among the countries that produce and supply cheese in the Russian Federation,

the largest share in supplies in kind and in value terms is for Ukraine and Germany —

22% and 21% respectively. It should be noted, that the share of Finland is also very

high — 12% in physical and 10% in value terms, and Lithuania — 11% and 10%.

The main Russian companies importing cheese are LLC “Valio”, LLC “Mils Stuff”,

and LLC “Solis”. Their share in the total volume of imports of production in kind is

equal to 14%, 9% and 8%, and in value terms – 12%, 9% and 8%.

In the structure of supply of cheese by regions of the Russian Federation, the

largest share belongs to Moscow — 50% in kind and 52% in value terms. The next

largest share belongs to St. Petersburg — 29% in kind and 27% in value terms.

The imports of premium young cheeses are characterized by large amounts of

cheeses such as mozzarella: the proportion engaged in these cheeses in the total

imports of young cheeses in 2009 in kind amounted to 76%. At the same time, ricotta

and mascarpone had about 19% and 3%, respectively. A large proportion of deliveries

of mozzarella on the Russian market can be justified not by active consumer demand

in the retail market, but by the use of this type of cheese in the segment HoReCa. To a

1 For more detailed information, see Figure 1 in Annex.


37 | Page

greater extent this includes pizza-oriented work with pizza delivery and networks of

pizzerias, to a lesser extent, restaurants and cafes, not performing delivery services.

This allows for a quite clear division of these consumers into two groups.

The first one includes food service establishments for which on the first place are the

quality of ingredients and of the final product, as well as its authenticity and original

recipe. The second one includes those restaurants, and more pizzerias and cafes,

which in the first place try to minimize raw material costs of the final product.

Thus, the share of young cheese, part of the retail market of premium cheeses,

is considerably less than the volume of imports of this type of cheese, and makes for a

rough estimate of 15%.

Among the countries producing and supplying young cheese in the premium

segment in Russia, the largest share of deliveries in kind in 2009, was occupied by

Argentina and Germany — 26.5% and 24%. It should be noted that large shipments

accounted for Denmark — 20.9% and Italy — 18%. In value terms, the main suppliers

were the countries listed above: the share of Germany was 27.9%, of Italy — 21.6%, of

Argentina — 20.6% and of Denmark — 18.2%. Despite the fact that the historical

homeland of young cheeses (mozzarella, ricotta and mascarpone occupying 98% of

total imports of young cheeses) is Italy, in recent years, most deliveries come from

Argentina. One explanation of this fact is the high cost of Italian mozzarella. For

example, when importing, the average cost of one ton of Argentine mozzarella is USD

2.7 thousand against USD 4.2 thousand for the Italian. The same role was played by

the fact that in 2008 it became widely known that in Italy dioxin-contaminated cheese

was being sold, which brought the temporary ban on Italian mozzarella from the EC

supplies. Dioxin is a highly poisonous substance, which has diverse physiological

activity. Dioxin has mutagenic and carcinogenic effects and can accumulate in

organisms. Experts believed that the presence of dioxin in buffalo milk and cheese was

an indicator of poor environmental conditions in the region of Campania, where the

problem with the processing of garbage is not still solved.


38 | Page

EXPORTS

Over 30 countries exported cheese to Russia in January-November, 2011.

According to Intesco Research Group, Belarus, Germany, Ukraine and Finland were the

main suppliers. Belarus was the key importer of dairy products into Russia. Production

costs in Belarus are much lower, and it is difficult for other suppliers to compete with

them.

Russia exports cheese, but export volume is by several times smaller in

comparison to import volume; in 2011 export volume saw 8.8% year-to-year decline.

In 2011 Russian manufacturers exported 8445 tons of cheese for the total amount of

USD 32.2 million. Unlike import, export is mainly driven by processed cheeses — 91%

of export volume, 7674.96 tons or USD 29.8 million. Second and third large segments

in export volume are semi-hard and unripe cheeses respectively with 4% and 2%. It

should be mentioned that share of export in general foreign trade of Russia is very

small.

Obvious leader of Russian cheese export is “Hochland” with 39% in volume.

This German company with production facilities in Russia is the leader of processed

cheeses and exports 41% of its production volume. Same company heads export of

unripe cheeses with 48% of its volume.

Second important exporter of cheeses from Russia is another foreign company

with production facilities in Russia — “Laktalis Istra” with 18% of export volume.

Third and fourth places in export rating belong to Russian manufacturers — cheese

plants “Lukhovsky” and “Yantar” with 10% and 6% of export volume respectively.

These companies also specialize in processed cheeses.

The said four companies are mainly driving production of processed cheeses in

Russia, so they also control about 78% of processed cheese export from Russia.

About 30 countries were buying Russian cheeses in 2011. Top ten countries of course

include former Soviet Republics. The most important buyer of Russian cheeses was

Ukraine with 41% of export volume followed by Turkmenistan with 29% and

Azerbaijan with 10%.

Most expensive export categories, according to customs statistics, are soft and

blue cheeses with the average export prices of 8.9 USD/kg and 4.9 USD/kg


39 | Page

respectively. Meanwhile the cheapest categories are semi-hard and unripe cheeses.

Leader in exports is processed cheese. It has the average export price of 3.9 USD/kg.

It can be stated that Russian cheese market is promising and vibrant. Demand

for semi-hard, hard and processed cheeses is well-set, production increases in volume.

Demand for elite cheeses is also growing as consumers’ purchasing power improves.

PROSPECTS

The cheese category is expected to grow by 6% annually up to 2016 to reach a

value of RUB 293 billion or USD 9.72 billion.

Experts underscore the significant market growth. In the coming years, growth

of the Russian cheese market will be 40% in value terms, outrunning expected growth

in such regions as North America and Western Europe.

According to experts, Russia will accelerate the transition from simple

commodity markets, where price is the major factor for consumers, to brand markets,

where the marketability brand is determined by proposed added value.

Experts also predict a substantial increase in the segment of healthy lifestyle

products, especially — products containing probiotics and having lowered fat. This

trend will be developed by growing demand by health-conscious consumers in such big

cities as Moscow and St. Petersburg. But in the medium terms sales of “healthy”

products will be quite small in contrast with sales of ordinary cheeses.

Strong competition in the economy segment will continue pushing domestic

manufacturers to diversify their product offers. In the short term, the cheese category

will witness new soft cheese launches. The assortment of products offered in this

category is expected to increase significantly. The consumption of premium cheese

brands is expected to grow during the forecast period due to the increasing presence

of expensive cheese brands in the regions. Large manufacturers and importers of

premium brands will face increased competition in the regions in which they are

present as they seek opportunities to widen their coverage. The development of the

supermarkets/hypermarkets channel in the regions will support such opportunities.

The forecast period is expected to witness a constant value CAGR of 6%, compared

with a 17% CAGR over the review period. However a faster than in historic period


40 | Page

growth in volume terms suggests that the slowdown in value growth is primarily due to

unit price rises easing. Alongside with approaching saturation in volume consumption

per capita, the prices will grow slower, as manufacturers and distributors will face

tighter competition and try to hold prices competitively low. Cheeses will see changes

in structure of demand: consumers are going to switch toward new types of cheeses,

thus value share of traditionally popular since Soviet period hard yellow cheeses will

shrink. Growing demand for premium cheese may serve as an opportunity for further

category development. However, this segment is only likely to see a strengthening

presence if the Russian economy registers stable development.

Packaged hard cheese is expected to see a 13% constant value CAGR over the

forecast period. Packaged products are preferred by chained retailers, which are

gaining share in cheese sales. At the same time, the number of Russian consumers

opting for smaller-sized but conveniently packaged products is increasing. The soft

cheese category is also expected to see relatively strong growth over the forecast

period, with a 10% constant value CAGR. The efforts of many domestic manufacturers

and importers launching new products in combination with a relatively low base will

support this development.

In the forecast period the average unit price of cheese is expected to rise at a

CAGR of 2%.

The table below shows the forecast sales of cheese for Russia in terms of

volume.

Table 17. Forecast Sales of Cheese by Category in Russia thsd tons

Production Years

2012 2013 2014 2015 2016 Processed Cheese 154.4 160.5 166.6 171.8 176.9

Spreadable Processed Cheese 116.4 121.3 126.3 130.4 134.5 Unspreadable Processed Cheese 38.0 39.1 40.3 41.4 42.3

Unprocessed Cheese 472.4 496.9 520.1 538.5 553.8 Hard Cheese 382.7 399.6 415.3 427.5 438.3 Soft Cheese 89.6 97.3 104.7 111.0 115.6

Spreadable Unprocessed Cheese — — — — — Cheese 626.7 657.4 686.7 710.3 730.7




41 | Page

The 4-year lag of time during 2012-2016 is predicted to increase the sales of

cheese by 17%. Processed cheese sales will increase by 15%, and unprocessed cheese

— by 17%.

Increased competition in the economy segment will restrict significant price increases

in the cheese category. Milk commodity prices saw a significant increase at the end of

the review period but are not expected to see very strong growth during the forecast

period.

Small domestic manufacturers are expected to develop in one of two ways.

They are either likely to be acquired by large Federal-scale manufacturers or they will

diversify their product lines, invest in improving their manufacturing efficiency and

engage in local brand launches. Marketing expenses will increase strongly as support

of brands is highly needed when competition is strengthening. The production of

private label cheese for the largest retailers is likely to be a good option for small

manufacturers that do not have access to large financial resources or the capabilities

to launch their own brands. The consumer acceptance of private labels is likely to grow

in the forecast period with positive experience of consumers in other categories.

Foodservice sales are expected to grow during the forecast period. Many

manufacturers may consider this channel to represent a good opportunity to increase

sales. Developing a presence in this channel will lead manufacturers to change their

approach towards promotion and distribution.

REFERENCES


http://www.foreign-trade.com/reference/hscode.cfm?code=0406

http://www.prweb.com/releases/cheese_cheddar/organic_artisan/prweb3489924.htm

http://www.researchandmarkets.com/reports/544591/analyzing_the_global_cheese_market

http://www.thedairysite.com/news/37329/cheese-market-continues-to-grow-in-russia

http://www.numbeo.com/food-prices/country_result.jsp?country=Russia

http://rbth.ru/articles/2012/07/25/food_prices_in_russia_rise_nearly_4_times_faster_than_in_eu_in_june__16645.html

http://businesstat.com/world/surveys/food_and_beverages/dairy_products/cheese/


http://www.foreign-trade.com/reference/hscode.cfm?code=0406

http://www.prweb.com/releases/cheese_cheddar/organic_artisan/prweb3489924.htm

http://www.researchandmarkets.com/reports/544591/analyzing_the_global_cheese_market

http://www.thedairysite.com/news/37329/cheese-market-continues-to-grow-in-russia




http://businesstat.com/world/surveys/food_and_beverages/dairy_products/cheese/


42 | Page

http://russianmarketreport.com/research/market_research/?analitic_id=25

http://www.foodmarket.spb.ru/eng/archive.php?year=2012&article=831&section=4

http://en.wikipedia.org/wiki/Cheese

http://cheese.wikia.com/wiki/Cheese

http://www.smellycheese.com.au/go/smelly-cheese-shop/cheese-facts


http://coinmill.com/RUB_USD.html#USD=1

International Dairy Magazine

http://russianmarketreport.com/research/market_research/?analitic_id=25

http://www.foodmarket.spb.ru/eng/archive.php?year=2012&article=831&section=4

http://en.wikipedia.org/wiki/Cheese

http://cheese.wikia.com/wiki/Cheese

http://www.smellycheese.com.au/go/smelly-cheese-shop/cheese-facts


http://coinmill.com/RUB_USD.html#USD=1


43 | Page

GEORGIAN CHEESE MARKET OVERVIEW

EXECUTIVE SUMMARY

Georgia is known as a homeland of wine while production of cheese counts 28

century history. There are many countries in the world that consume large amounts of

cheese but none of them could possibly rival with Georgia in the extreme devotion

towards this product. The Georgians eat cheese not as a supplement but as the

inseparable part of the main course.

It is important to mention that Georgia is the first among the EU neighborhood

countries to take important step towards protecting its local food and beverages from

being copied in other countries. The Georgians consider this process to be an

intellectual property right which indicates a geographical area and is used to designate

the goods originating in that geographical area, specific quality, reputation, or other

characteristics of which are attributable to that geographical area and production or

processing or preparation of which takes place in the geographical area. National

Intellectual Property Center of Georgia in cooperation with Ministry of Agriculture of

Georgia (MOA) has now registered as many as 37 varieties of local products under a

law of Georgia on Appellations of Origin and Geographical Indications of Goods. In the

list of local products Sulguni cheese has already been registered as a local Georgian

product. Sulguni is a pickled Georgian cheese from Samegrelo region. Sulguni may be

produced from normalized milk of cow, buffalo, sheep or goat, or a mix of these milks.

It has a sour, moderately salty flavor, a dimpled texture, and an elastic consistency;

these attributes are the result of the process used, as is the source of its moniker

"pickle cheese". Its color ranges from white to pale yellow. According to the 1970s

sources, Sulguni accounted for around 27% of cheese production in Georgia. It was the

3rd most popular pickled cheese in the Soviet Union, with 16.5% share in 1987 (after

Bryndza and Ossetian cheese).


With its lush pastures, Georgia produces excellent dairy products. Therefore,

pungent cheeses, cheeses with herbs and creamy yogurt are in abundance. In the

provinces of Samegrelo and Guria, cheeses often are used as a substitute for butter.

http://en.wikipedia.org/wiki/Georgian_cheese

http://en.wikipedia.org/wiki/Bubalus

http://en.wikipedia.org/wiki/Soviet_Union

http://en.wikipedia.org/wiki/Bryndza


44 | Page

Some say that the longevity of the Georgians is directly related to their yogurt

consumption. Dozens of varieties of cheese are produced in Georgia. For example,

Sulguni (Suluguni), Imeruli, Inguli, Ossetian cheese, Gadazelili, Gouda, Kobis Kveli,

Tushuri, Parmesan, Mozzarella, etc. Nevertheless, the most popular types of cheese

are Sulguni and Imeruli, which belong to artisanal products in most cases. These two

are followed by a number of Georgian types of cheese which vary by amount of salt

and their softness.

Not only the taste scale, but also the ways of making Georgian cheeses differ

from the European ones. If in European kitchens the varieties of cheeses are consumed

for having a snack, or just for a dessert table, the Georgian cuisine uses them in the

preparation of hot meals. In Georgian cuisine the cheese can be boiled in milk or

tenderized, roasted on a spit in a frying pan, baked in pastry, soaked, pounded,

flavored with oil and spices. Almost every region in Georgia boasts its own variety of

cheese: Samegrelo is famous for Sulguni, Imereti offers Imeruli (curd cheese made

from cow milk) and Gadazelili, a very soft cheese with mint; and Tusheti prefers

Gouda, a sheep cheese.

Spreadable unprocessed cheese is actually the smallest product range of

cheese and in conditions of a slight economic recovery consumers show particular

interest towards this type of cheese. Unpackaged cheese is strongly prioritized on the

Georgian market and affects sales of packaged cheese dramatically. Nevertheless, the

growth rate of the yet undeveloped category of spreadable unprocessed cheese was

quite visible over the review period, so it has good prospective growth for the forecast

period.

The production volumes of cheese in Georgia are declining. The table below shows

that.

Table 18. Cheese Production Volumes in Georgia thsd tons

2006 2007 2008 2009 2010 2011 0.1 0.1 0.1 0.0 0.0 0.0




45 | Page

Cheese production volumes have remained stable since 2009. Obviously, the

impact of the crisis has immensely impacted on this sphere of Georgian production.

Consequently, the per capita cheese production is also close to zero level.

The table below represents percentage value breakdowns of spreadable processed

cheeses by type.

Table 19. Spreadable Processed Cheese by Type in Georgia: % Value Breakdown % retail value rsp

Cheese Type Years



The share of reconstituted cheese dominates over the one of cream cheese.

Nevertheless, the share of cream cheeses has a declining trend.

KEY MARKET TRENDS

The category trend towards artisanal cheese being steadily present and owning

high shares is expected to continue over the forecast period. Nevertheless, the

Georgian manufacturer Eco-Food Ltd is starting to invest in manufacturing of packaged

and unpackaged cheese. The domination of the category is expected to be continued

by Georgian manufacturers, but manufacturing localization by several big players in

dairy products is expected to take place. Also, Valio’s slow but steady growth makes it

assumable that it will remain the leader amongst international brands of cheese in

Georgia. Increased popularity of fast lunches at offices will also raise the popularity of

soft packaged cheese from Valio and some brands of unprocessed spreadable cheese.

Due to fast and sudden growth of milk’s price in Georgia at the end of 2010 and the

beginning of 2011, the rate of cheese’s performance in value terms is evaluated higher

compared to the prediction of the 2011 edition.

Constant value CAGR of the review period appears to be almost twice higher

compared to the one of the forecast period. There were several reasons for such a

difference between the review period and forecast period growth rates. The revenue



46 | Page

service of Georgia (tax police) has strengthened measures against illicit trade of all

kinds of products, including cheese. Besides, the growing welfare of society lets people

switch to more expensive products and finally, to increase consumption. The

inflationary increase of prices also affected the CAGR of the review period. The

forecast period is expected to be calmer in terms of growth as no dramatic upturns or

downturns are expected in consumption. The prices for cheese will be linked to milk

prices directly. No legislative changes are expected for dairy products. As cheese

remains a very basic product for Georgian consumers, there are no distinct threats to

growth of the cheese category in Georgia. The only obstacle to growth could be an

economic downturn, which would force more manufacturers of cheese to use cheap

milk powders in production to keep prices affordable to consumers.

In case of stable prices for milk, the prices will remain stable, facing growth in

constant terms less than 1% annually. The demand is expected to be stably growing at

low rates and consumers are not expected to switch to purchases of some dramatically

highly expensive brands. The removal of artisanal cheese form the category will be a

very slow trend which will not affect the category dramatically in terms of price

increase.

The sales of cheese will be gradually moving to supermarkets and

hypermarkets. The growth will be slight, as the packaged cheese will not be taking over

fast enough to cause extreme changes in distribution channels. Consumers will also be

giving up purchases in open markets, prioritizing small independent grocers instead.

Open markets will lose ground slowly as they will be considered more and more

inconvenient and unhygienic compared to other channels of retailing.

The biggest and most important plan has been announced by Eco-Food, which

is launching a factory where traditional Georgian cheese will be produced. The range

of products will be presented in both packaged and unpackaged forms. As the

company announced, to keep the prices competitive compared with small producers

of artisanal cheese, cheese produced by it will be unpackaged or packaged without any

wise design solution. Eco-Food’s decision is expected to be copied by Sante GMT as

well. There is a big possibility that these two companies will be taking over the

category and suppressing small producers of artisanal Georgian cheese.


47 | Page

There is no significant success expected for slightly modernized international

branded products in Georgia in 2011. The most successful launches are expected to be

performed by Eco-Food by the end of 2011, which will be competing with small

producers of artisanal Georgian cheese.


The largest sales of cheese take part in independent small grocers (about 40%).

This channel is followed by other grocery retailers, which assume the form of bazaars

mostly. The smallest share is accounted for by supermarkets/hypermarkets.


Table 20. Sales of Cheese by Distribution Format in Georgia % retail value rsp




**Discounters — — — — — — **Small Grocery Retailers 21.4 25.2 36.9 38.8 40.1 41.0


***Forecourt Retailers — — — — — — **Other Grocery Retailers 67.0 56.0 41.0 37.0 35.2 34.0

*Non-Grocery Retailers — — — — — — **Health and Beauty Retailers — — — — — —

**Other Non-Grocery Retailers — — — — — — Non-Store Retailing — — — — — —

*Vending — — — — — — *Homeshopping — — — — — —

*Internet Retailing — — — — — — *Direct Selling — — — — — —


The table below represents the company shares occupied in cheese production in

Georgia.



48 | Page

Table 21. Cheese Company Shares in Georgia % retail value rsp

Company Years

2006 2007 2008 2009 2010 Valio Oy 1.8 1.8 2.2 2.3 2.5 Kiziki Ltd 1.7 1.6 1.7 1.8 1.6 Yantar AOZT 1.0 1.0 1.0 1.0 0.9 RZPC OAO 0.7 0.7 0.7 0.7 0.8 Bayernland eG 0.6 0.6 0.7 0.7 0.8 Hofmeister GmbH 0.5 0.5 0.5 0.6 0.7 Sante GMT Ltd 0.5 0.5 0.6 0.7 0.7 SM Spomlek 0.8 0.9 0.6 0.5 0.5 Ckcharo Ltd 2.1 1.8 1.8 1.9 — Hochland AG 0.8 0.7 0.7 0.9 — Zott GmbH & Co KG 0.1 0.4 0.2 0.1 — Artisanal 69.0 67.6 69.5 69.2 73.1 Others 20.3 21.8 19.8 19.7 18.4 TOTAL 100.0 100.0 100.0 100.0 100.0


COMPETITION FIELD

In 2010 the sales were led by artisanal producers of cheese solely, owning 73%

share of the category. This huge share resulted from the specific taste of Georgian

consumers and also comparably lower prices for unpackaged cheese, which aroused

slight increase of share of this type of cheese in a critical period in the economy of

Georgia.

Artisanal producers of cheese managed to expand their share of the category

by approximately four percentage points. Consumers were too hard up for

experiments in buying branded cheese products other than traditional ones and,

therefore, prioritized traditional cheese bought mostly in bazaars and independent

small grocers. The importers are not very optimistic about the prosperity of

international cheese brands and therefore no strong marketing activities are launched

by them.

The category is purely dominated by local artisanal producers which appear to

be specialists of manufacturing the right-tasting cheese for Georgian consumers. The



49 | Page

international brands mostly suit the gourmands of foreign brands and foreigners who

keep them alive on the market.

The category of cheese is quite conservative. The best performers, artisanal producers

of cheese, do not tend to change their products and introduce some extra flavors or

launch some packaging as it would raise the price, for which the average Georgian

consumer is not ready yet.

No packaging innovation or active advertising measures have been spotted by

the end of the review period, as the ground for strong investments in this category is

not mature enough.

Mostly economy artisanal products are leading the sales, as cheese remains

one of the major products for Georgians, both as a basic product and as part of some

premium cuisine element. In both cases, artisanal cheese is leading. Standard-priced,

packaged brands are mostly for people who are gourmands of internationally branded

cheese, or foreigners who do not enjoy the traditional taste of Georgian cheese.

Standard packaged brands are also becoming popular with food logistics services for

offices, as these products are more convenient and hygienic to be consumed during

quick lunches at offices. The premium segment can be described as extremely narrow

in Georgia due to the absence of sufficiently well-off consumers.


The table below shows the sales of cheese in Georgia by category. It will enable to find out the consumer preferences in Georgia

Table 22. Sales of Cheese by Category in Georgia thsd tons

Production Years




Spreadable Unprocessed Cheese 0.9 0.9 2.0 1.9 2.0 2.2 Cheese 42.7 43.1 44.2 43.8 43.9 44.4




50 | Page

Unprocessed cheese is more preferable by the Georgians than processed one. Among

unprocessed cheese the most preferable cheese is soft one. Skimming over the data

above, it becomes clear that the sales of cheese are growing moderately. The trend of

growth is obvious in the graph below.


Sales of spreadable processed cheese are led by reconstituted cheese, which is

expected to perform 94% of overall sales of spreadable processed cheese.

Reconstituted cheese is widely used in cooking for the preparation of breakfasts, pizza

and a wide range of other dishes.

PRICES

The production of artisanal cheese prospered in 2010. Such a steadily fixed

position of artisanal cheese on the Georgian market is conditioned by several reasons.

Only the artisanal producers of cheese manage to satisfy the demands of Georgian

consumers and only that kind of cheese can be used in Georgian traditional cuisine to

achieve the original taste of traditional dishes. Besides, the prices are much lower

compared to imported brands and as cheese remains one of the major products after

bread for Georgian consumers, the category is quite large and the competition

between artisanal producers is very high, which keeps prices lower.

The unit price growth for cheese fits that of most milk products, expected to reach

about 8% annually. The slightly increased demand for comparably more expensive

cheese also plays its role in the price increase. Unit price of locally produced cheese

directly depends on the price of milk. As the artisanal producers do not have means for

41.5

42.0

42.5

43.0

43.5

44.0

44.5

45.0

2006 2007 2008 2009 2010 2011

thsd

tons

Graph 6. Sales of Cheese in Georgia



51 | Page

storage in most cases, they are affected by prices for commodities immediately, as

soon as changes in price take part.

According to latest price updates (August, 2012), the average price for a kilo of

fresh cheese in Georgia is about USD 4.81. The average price for a kilo of Imeretian

cheese in Tbilisi is 6 lari (circa USD 3.69). It becomes cheaper in summer when milk

yields are higher2.

EXTERNAL TRADE

The graph below gives a clear view that the import volumes of cheese and

curds in Georgia dominate over the exported cheese and curds despite the exports of

this commodity group have risen swiftly since 2010.

Source: www.geostat.ge

Table 23. Cheese and Curds in Georgia thsd USD

2006 2007 2008 2009 2010 2011 Exports 2.0 54.5 0.8 22.1 205.9 220.2 Imports 2434.4 2890.9 4008.9 2172.5 3467.6 4325.8

Source: www.geostat.ge

The table above shows the foreign trade of cheese and curds in Georgia. The

exports of this commodity group have increased rapidly in 2010 (by almost 9.3 times).


0.0500.0

1000.01500.02000.02500.03000.03500.04000.04500.05000.0

2006 2007 2008 2009 2010 2011

thsd

USD

Graph 7. Foreign Trade of Cheese and Curds in Georgia

Exports

Imports

http://www.geostat.ge/



52 | Page

The impact of crisis on imports of cheese and curds was huge in 2009 when the

imports rapidly decreased by 45.8%. The increase is noticeable for the following years.

PROSPECTS

Taking into consideration the recent data as well as the time series of cheese

sales in Georgia for 2006-2011, it is calculated that overall cheese sales will increase

year by year for the further 5 years. Cheese sales in Georgia will increase by 2.4% in

average during 2012-2016. The sales volumes of processed cheese are projected to

have 0.1 thousand tons of increase yearly. Spreadable processed cheese will go on

dominating over the unspreadable one. Unprocessed cheese sales volumes are going

to increase in average for a thousand tons for the further 5 years. In this category, soft

cheese sales volumes will dominate over the rest in this category.

Table 24. Forecast Sales of Cheese by Category in Georgia thsd tons

Production Years




Spreadable Unprocessed Cheese 2.3 2.4 2.5 2.7 2.7 Cheese 45.2 46.2 47.5 48.9 49.8


REFERENCES


http://helengraves.co.uk/tag/georgian-cheese/

http://www.georgianjournal.ge/index.php/economy/8995-nobody-eats-as-much-cheese-as-georgians#

http://www.colchischeese.com/products.html

http://en.wikipedia.org/wiki/Protected_Geographical_Indications_for_the_Georgian_products

http://www.aboutgeorgia.ge/cuisine/cheese.html

http://georgian-cuisine.gurman.ge/



http://helengraves.co.uk/tag/georgian-cheese/

http://www.georgianjournal.ge/index.php/economy/8995-nobody-eats-as-much-cheese-as-georgians

http://www.georgianjournal.ge/index.php/economy/8995-nobody-eats-as-much-cheese-as-georgians

http://www.colchischeese.com/products.html

http://en.wikipedia.org/wiki/Protected_Geographical_Indications_for_the_Georgian_products

http://www.aboutgeorgia.ge/cuisine/cheese.html

http://georgian-cuisine.gurman.ge/


53 | Page

http://en.wikipedia.org/wiki/Sulguni

http://georgiaabout.wordpress.com/tag/georgian-imeretian-cheese/

http://heliski.travel/caucasus/georgian-hospitality/

http://www.numbeo.com/food-prices/country_result.jsp?country=Georgia

www.geostat.ge

http://coinmill.com/GEL_USD.html#USD=1

http://en.wikipedia.org/wiki/Sulguni

http://georgiaabout.wordpress.com/tag/georgian-imeretian-cheese/

http://heliski.travel/caucasus/georgian-hospitality/

http://www.numbeo.com/food-prices/country_result.jsp?country=Georgia


http://coinmill.com/GEL_USD.html#USD=1


54 | Page

EUROPEAN CHEESE MARKET OVERVIEW

EXECUTIVE SUMMARY

Cheese has traditionally been considered the preferred outlet for milk from the

European Union (EU) after local fresh-milk requirements have been satisfied. The EU

cheese market is the largest in the world, and despite very high per capita

consumption levels, growth has remained attractive and stable.

The high production costs of milk in most of the EU rule out a competitive role

in supplying the world’s net importing markets with low-priced dairy commodities.

Cheese has therefore provided much better export opportunities than any other dairy

product, as the willingness to pay for quality European cheese has always been high,

and the impact of higher raw-material costs is less problematic. As a consequence, the

share of EU milk that is processed into cheese increased from 43 percent to 45 per

cent between 2001 and 2010.

However, the cheese market has changed in recent years due to developments

in the EU and to global trends. Competition within the EU market is heating up, as the

market has become more saturated, the traditionally higher premium for cheese

versus other dairy products has eroded, and the commodity segment of the cheese

market has become more volatile and unpredictable.

Most of the growth on the global market will be in milk powders and butter oil

rather than cheese, as the needs of developing dairy markets are more geared towards

these products. As a result, cheese specialists are reconsidering their business models

and trying to incorporate new growth areas either in new geographies or in value-

adding services. These developments raise the question of whether cheese should

remain the preferred outlet for new milk produced in the EU after 2015, when the

termination of the quota system may stimulate growth of milk production in selected

regions in Western Europe.


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MARKET OVERVIEW

The production of fresh cows’ milk is dominant (93%) among the dairy

production sectors. 5% of the whole production belongs to cheese production.

The pie chart below represents the percentage breakdown of the dairy production in

Europe for 2011.


The EU cheese market is the largest in the world, and despite very high per

capita consumption levels, growth has remained attractive and stable.

The EU cheese market is changing due to developments in the EU dairy market

and to global trends. Most of the growth on the global dairy market is in milk powders

and butter oil rather than cheese. The returns to be made on producing powders and

butter rose faster than those for commodity cheeses.

As a result, cheese specialists are reconsidering their business models and

trying to incorporate new growth areas either in new geographies or in value-adding

services.

Growth opportunities for cheese in markets outside the EU are interesting, but

a dedicated country-by-country marketing effort will also be required to provide a

stronger competitive edge against exports from more efficient milk production

regions.

1% 5% 0%

1%

93%

Pie Chart 3. Dairy Production in Europe for 2011








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The EU cheese market is changing, forcing cheese suppliers to rethink their

business models and explore new opportunities for growth. The main drivers behind

these changes are falling growth rates in the EU, more pressure on margins because of

higher revenues in powder and butter products, and volatility in commodity cheese

markets. With the prospect of growth in milk production after the termination of EU

milk quotas in 2015, suppliers need to find new ways to deal with the new milk

produced. In a mature, competitive and increasingly volatile cheese market,

companies have six strategic options for targeting further growth and profitability.

DRIVERS OF CHANGE: EU GROWTH RATES FALLING

The EU cheese market is still growing, albeit at a declining rate. Average annual

growth between 2000 and 2005 was 1.8% and dropped to 1.1% between 2005 and

2010. Annual growth in the period between 2011 and 2015 is forecast to be 0.6%.

Per capita consumption growth accounts for 0.4% of annual growth, with the balance

the result of population growth. Growth varies between the different EU member

states. Growth rates above two per cent are expected in Ireland, Poland and Hungary.

Growth rates between one per cent and two per cent are expected in the UK, Sweden,

Spain, Greece and most of the new EU member states. Growth rates in large markets

like France and Germany are expected to remain close to zero.

Although demand for cheese as an ingredient in ready-made food products is slightly

more sensitive to changes in economic sentiment, growth across the different market

segments — industrial, catering and retail — is currently stable.

Over the past decade, the main change in EU cheese demand occurred in the

use of cheese by households. Retail purchases, in terms of kilogram per household,

grew in line with overall market growth, but the share of cheese purchases used for

cooking — sauces, toppings and meal ingredients — grew strongly at the expense of

more traditional uses, such as cheese on a sandwich or as part of a cheese platter.

Despite the overall stability of the EU cheese market, in terms of shifts across

categories, the EU market remains a collection of different regional markets with

different cheese segmentation profiles (see Figure 1).

The UK comes close to the US consumption profile where catering and

industrial ingredients account for a relatively large share of consumption compared to


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retail purchases. Germany also has a sizeable proportion of ingredient use, as it is the

preferred location for a number of large European pizza manufacturers. In countries

like Italy, Spain, Poland and France, most cheese is still purchased and consumed

through the retail channel.

In such a mature market one would expect a strong consolidation trend, but in-

market merger and acquisition (M&A) activity in the EU cheese industry has been

modest in recent years, and overall brand shares of the leading players have been

stable. Private-label shares throughout the EU have remained relatively stable as well,

at around 18% on average. The highest private-label shares are found in the cheese

categories of Cheddar, Gouda and Emmental. In the specialty cheese categories,

private-label shares are very low.

Most EU companies active in cheese have traditionally enjoyed stable and

above average returns. Returns for cheese and whey — even in the big commodity

cheeses such as Cheddar, Gouda and Emmental — were generally higher than those

for skim milk powder (SMP) and butter, meaning that cheese processors could easily

pay competitive prices for milk and still generate decent margins.

However, the traditional premium enjoyed by EU cheese makers disappeared

after 2007. Demand for milk powders grew faster than for cheese as expanding


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markets, such as China and Vietnam, rushed to supplement local milk supply with

imported products for recombining or ingredient use.

With existing capacity precluding the redirection of sufficient milk to faster-

growing product markets, the returns to be made on producing SMP and butter rose

faster than those for commodity cheeses such as Gouda or Cheddar, including the

whey powder (WP) revenues (see Figure 2). Commodity cheese specialists suddenly

found it harder to pay milk prices in line with market trends and still make a profit.

After the price support levels of SMP and butter were reduced following the EU

dairy market reform of 2002, the period 2002 to 2007 was characterized by multi-

product processors exploring other options to offload temporary surpluses of milk. In

addition to offering SMP and butter for intervention, they pushed bigger volumes of

commodity cheeses into the spot market by undercutting competitors’ prices, and sold

Cheddar curd from the UK or Gouda curd from Western Europe for making processed

cheese or Mozzarella. Under these market circumstances, manufacturers of Gouda,

Cheddar and Emmental which normally operate in different markets were competing

for the same clients in processed cheese and ingredient applications. As a result, the


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EU cheese market became more susceptible to general imbalances in the global

market triggered by supply or demand issues in products other than cheese. Not only

are cheese processors now facing increasing difficulties in generating higher returns

compared to SMP and butter, but they are also experiencing higher levels of price

volatility at the wholesale level.

In hard and semi-hard cheeses, the maturation process adds further complexity

and risk to the price volatility in the market. The maturation process takes from a few

weeks to over a year for cheeses like Gouda, Edam and Emmental. This creates a time

lag that makes a market-driven approach very difficult in these cheese types.

Particularly when the cheese has been produced in times of high raw-material prices,

but is not sold until a period in which the entire dairy market has turned around and

wholesale prices are low, margins come under pressure and can even become negative

(see Figure 3).

Between 2006 and 2008, a wave of cheese capacity expansions took place in

Mozzarella and other big commodity cheeses, with little or no investments in other

commodity products. This wave of investments came to a standstill after 2008, partly

because the capacity expansion was not yet fully utilized, partly because of the

financial crisis, but also because of the general notion that the world market needed


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more SMP and butter rather than more cheese. Comparative prices therefore started

to reflect these relative shortages within the dairy product portfolio.

With the termination of the quota system on the horizon, the preferred destination of

new milk becomes an interesting question. In countries such as Ireland, the

Netherlands, and Denmark and in selected regions in Germany and France, processors

can look forward to milk production increases of between 15% and 50%, which could

largely be achieved between 2015 and 2020. This implies that processors in these

regions — and especially the cooperatives — will have to make decisions on capacity

expansion sooner rather than later.

The growing global demand for SMP and butter does not imply that the EU

should entirely realign its growth ambitions and forget about cheese. Despite the fact

that production costs have risen in the more efficient export regions in the world, most

of the milk produced in the EU still cannot compete in the commodity areas of the

dairy market. However, higher value-added outlets for milk powders, such as the

infant milk formula market, where quality is at least as important as price, are now

within reach for new EU milk produced after 2015. At the very least, the options can be

distributed more evenly across the dairy portfolio.

STRATEGIES FOR CHEESE COMPANIES

The drivers of change may challenge companies active in the EU cheese sector to

revisit traditional business models and develop new strategies. In a mature,

competitive and increasingly volatile cheese market, companies basically have six

strategic options for targeting further growth and profitability.

• Consolidating market positions and increasing efficiency in operations and

marketing.

• Improving the level of added value in the retail market by developing unique

selling points through new traits in the product itself, supported by dedicated

marketing and, preferably, brands.

• Improving the added value in the retail market by offering secondary

processing and logistics services.

• Developing ingredient solutions for clients that use processed cheese in ready-

made food products such as pizzas, sandwiches, cheese snacks and sauces.


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• Creating more flexibility in the product portfolio in order to avoid having to ride

the highs and lows of the global market.

• Targeting growth in markets outside the EU through dedicated export

concepts.

CONSOLIDATING MARKET POSITIONS

Due to the maturity of the EU cheese market, the strategic focus of many

leading players is to consolidate current market positions by acquiring add-ons, and

then to rationalize these operations and marketing structures. However, consolidation

has been modest, and rationalization has mainly taken place at the factory level rather

than between companies, with the exception of Lactalis, which has consolidated its

number-one position in branded cheese by acquiring cheese brands in Italy, the UK,

Spain and Central and Eastern European countries. The market shares of the leading

EU cheese players are largely stable (see Figure 4). Private-label shares have gradually

increased in Western Europe, from 20.5% in 2002 to 22.5% in 2009, while staying very

low (around 2%) in the growing Central and Eastern European cheese markets.


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IMPROVING VALUE-ADD POTENTIAL IN RETAIL MARKET

In the last decade, most of the dominant players in the branded EU retail

market have focused their new product development on line extensions and packaging

innovations targeted at convenience. Nonetheless, there have been many examples of

successful new product launches in recent years.

Products targeted at satisfying snacking demands, such as cheese snacks

children can take to school, have been particularly successful. So have cheeses with a

link to the regions where they are produced such as products with Protected

Geographic Indications (PGI) or Protected Designations of Origin (PDO). Consumers are

willing to pay more for regionally produced specialty cheeses when they combine good

quality and taste with a strong marketing story. Specialty cheese stores use these

cheeses to distinguish their range from the large retailers. However, retailers also open

up shelf space for regional concepts.

These concepts may range from the ‘Buy British’ story developed by Tesco in

the UK to the small-scale farmhouse production of Comté by French dairy farmers in

the Jura region. Cheeses that have low fat levels without compromising too strongly on

flavor were also a success story. The big boom in low- fat cheeses seems to be over,

but the high content of saturated fats remains a weakness for conventional cheese.

The ambitions of Danish food regulators to tax cheese in line with other unhealthy

consumer products like alcohol and tobacco provides another argument that the high

fat levels in cheese make the product vulnerable to these initiatives. There is no reason

to expect revolutionary developments in cheese innovation since the EU cheese

market already offers a sophisticated and diverse range. As it appears that most

options to change the product itself have already been exhausted, most future

innovations will target the aspect of convenience by offering flexibility of utilization in

the kitchen or by introducing new formats and packaging to improve portability, thus

increasing the number of occasions when cheese can be consumed.


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DEVELOPING SECONDARY PROCESSING AND DEDICATED SERVICES FOR RETAILERS

As the process of cheese making — particularly for big commodity cheeses such

as Cheddar, Gouda, Edam and Emmental — has become standardized and cost-driven,

many companies have developed specialist business models for value creation in the

downstream part of the chain. These business models include warehousing and

maturation services for retailers and/or primary processors, logistic and packaging

services for retail customers and foodservice, and developing private-label concepts

and category management roles for retailers.

While these services are sometimes in the hands of primary cheese

manufacturers, most often these roles are further developed by companies that

started off as traders but adopted value- adding services to escape the low margins in

trade. Many manufacturers of the big commodity cheeses have been focusing on scale

and cost advantages in recent decades. By doing so, they have lost the flexibility to

service individual clients, which has opened up plenty of opportunities for smaller

companies. Especially in consolidated retail markets, it pays to set up dedicated cutting

and packing lines for single retail clients. The UK and the Netherlands provide many

examples of how these dedicated investments represent a strong guarantee for

continued business since the mutual dependence is high.

Cheese used as an ingredient in processed food products was one of the main

growth drivers of the EU cheese market in the 1990s. However, many cheese

manufacturers have long considered the cheese-ingredient market a secondary market

and have failed to recognize the opportunities that were obvious to many ingredient

specialists in the general food market. There is great value to be captured in offering

tailored solutions to large customers in food processing. This is a different proposition

than occasionally shipping big blocks of cheese to ingredient customers during times of

oversupply in the cheese market. The growth in this part of the cheese market during

the 1990s saw the emergence of smaller ingredient specialists that developed

dedicated ingredients solutions for their customers in pizzas, snacks and sauces.

Dedicated ingredient solutions include technologies such as extrusion, differentiated

melting points, different shapes and cheese powders. This category of ingredient

specialists consists largely of relatively small companies that have invested in the


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intellectual property that gives them a competitive edge in the cheese-ingredient

market.

CREATING FLEXIBILITY IN PRODUCT PORTFOLIO

The years 2008 and 2009 proved that when the EU market is in a surplus

situation and multi-product processors can use the commodity cheese market to

offload milk surpluses, it becomes very difficult for cheese specialists to retain their

margins, because their strength comes from processing efficiency and they lack

alternative outlets for their milk.

The ability to relieve some of the pressure by exporting milk outside the EU is

limited and there is therefore no escape from the trap of competing at ever-lower

prices, ultimately destroying everyone’s market. Given the high probability that the

global market will create similar imbalances in EU supply and demand from time to

time, especially after 2015, the only way to escape this situation is to create alternative

relief valves. These could include investing in processing capacity for alternative

products, using other processors’ production capacity for alternative products, setting

up joint balancing plants or discouraging production increases at the farm level.

This could be achieved for instance by a differentiated milk price system where

price A (usually higher) is paid for the milk required for the processor’s core cheese

business, while additional volumes are purchased at price B, the result of the value

derived from the company’s secondary markets. There is no simple solution to the

challenge of oversupply. The nature of the dairy market dictates that when there is

oversupply in one market it quickly creates oversupply in other dairy markets as well.

However, adding flexibility to the options to take the pressure off a processor’s core

market is the only solution which avoids having to push more cheese into an already

saturated market. This is of the utmost importance in cheese, where storability is

limited and costs of storage are high.

DEVELOPING EXPORT BUSINESS

EU cheese exports are still growing and are still benefitting from a high

perceived value of EU cheeses in importing markets. Russia remains crucial for the

supply and demand balance of EU cheese (see Figure 5).


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For example, in 2010, Russia single-handedly cleared the EU market of Gouda

and Gouda-like cheeses and left the EU value chain with very low inventory levels.

Russia may be the most important market for the EU in volume terms, but other

countries are more important in terms of the average price per kilogram of exported

product (see Figure 6).

Export markets for EU cheeses typically fall into several categories depending

on what the imported cheese is used for. Algeria, Egypt, Saudi Arabia and Japan mostly

import cheese for further processing, while Russia and Mexico typically import bulk

cheeses which are subsequently repackaged for retail and catering customers. The US

and Canada generally import specialty cheeses, which are commonly retail-ready.


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Competition for market share where cheese is mostly used for further processing

revolves mainly around price and is therefore similar to the competition in powders

and butter. It is legitimate to ask how much marketing effort in these markets is

justifiable given the EU’s lack of cost competitiveness in producing milk. Targeting

these markets in times of oversupply obviously makes sense, but the objective in these

market circumstances is essentially to sell ‘packed fats and proteins’, rather than

marketing cheese.

The share of imports has remained quite stable in most of the export destinations for

EU cheese (see Figure 7).

The biggest changes have occurred in the Middle East, where Egypt has become a

processing and redistribution hub. The country is still an important destination for EU

cheese — and also for US cheese. However, a large share is being processed and re-

exported to neighboring countries such as Saudi Arabia, Lebanon and the United Arab

Emirates. Egypt now holds total import shares in these countries of 38%, 29% and 17%,

respectively.


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The growth of milk production after the termination of the quota system in

2015 is likely to be the biggest strategic challenge for EU processors in the years to

come. Processors will have to decide which opportunity to take and then make

decisions about building new capacity. The expected annual growth rate of 0.6% in EU

cheese consumption still allows for a capacity increase of about 50000 tones or one

large-scale factory every year.

For further growth, however, processors in supply growth regions will have to

develop new cheese markets or prioritize other products. After having determined

how much new milk can be expected from their suppliers, individual processors will

have to decide which products this new milk will be used for based firstly on EU and

global market growth opportunities in cheese versus powder and butter, secondly on

individual company capabilities in processing efficiency, creating new markets,

customer access and marketing, and thirdly on careful consideration of the growth

ambitions, and capacity expansions of the competition.


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The last issue in particular will be critical for a smooth transition to the non-

quota era that starts in 2015. Clearly, a coordinated transition can be more easily

achieved in a region in which the industry is consolidated than in a region in which

many processors are going it alone.

Due to the low base level of consumption and the much higher population growth,

developing markets provide better opportunities for long-term growth in demand for

EU cheese than those of Western Europe.

There is little potential for local cheese production in most of the developing

markets since the growing need for milk supply for fresh products usually leaves little

room to set up an efficient cheese value chain. Additionally, the high cost of raw milk

relative to the cost of transporting cheese makes it difficult to compete against cheese

imports coming from more efficient production regions.

Price, quality and sustainability of supply are key success factors in import

markets for powder and butter. While these factors are also important for cheese,

most cheese import markets additionally demand a dedicated marketing approach

which focuses on the specific local consumer preferences, distribution structures and

client landscape. Through a dedicated effort towards local market characteristics, EU

cheese manufacturers such as Emmi and Tine have developed interesting markets

outside the EU. Several EU specialist cheese traders have developed interesting

positions in single countries by taking a widely available Gouda, Cheddar or Emmental

cheese and tailoring it to the regional needs in that particular market by developing a

brand, distinct packaging and an efficient route to market.

This may require dedicated investments in local distributor networks. Export

markets are more often used to offload EU surpluses in commodity cheeses. For

example, when addressing the needs of processed cheese makers throughout the

world, a matured block of Cheddar, Gouda or Emmental may not be the most cost-

competitive format to satisfy the customer’s requirement for fats and proteins.

Caseins or even filled cheese products are a format more suited to compete in those

markets where the price per kilogram of fat and protein is the main selling point.

EU cheese exports could benefit tremendously from a country-by-country

approach. Given the level of saturation in the domestic EU market, the ambitions in

terms of new cheese- processing capacity beyond 2015 and the better growth


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prospects outside the EU, investments in a dedicated export approach seem more than

worthwhile. Exports to Russia will remain crucial for the EU cheese market. Volume

growth opportunities will remain because rising Russian incomes are increasing cheese

consumption and Russia does not seem capable of boosting its own cheese supply.

Value growth opportunities are probably even better, as EU cheese is still largely

exported in bulk form, with most of the tailored cutting and packing taking place closer

to the consumer.

Exports to markets such as the Middle East, where most of the cheese is further

processed, could benefit from alternative cheese concepts that are more price-

competitive and still satisfy customers’ needs.

The developing cheese markets in Asia and Latin America require a dual

approach. Consumption growth is partly taking place in ingredients (i.e. cheese

solutions for pizza and burgers) while cheese consumption is also being driven by

affluent urban consumers who are adopting westernized cheese consumption habits.

This type of customer requires tailored marketing and distribution services, probably

involving investments in local distributors.

WHICH CUSTOMER SERVICE MODELS WILL PROVIDE SUSTAINABLE RETURNS?

In an era of growing retail dominance and diminishing opportunities for product

differentiation, the importance of the product’s quality and flavor is already

recognized, so the competitive edge increasingly needs to be created in the servicing

models. The shape and form of these models can vary among markets.

In markets where specialty cheeses and branded ranges dominate the retail

shelves, category management services can provide interesting value to retail clients.

In countries such as Germany, the UK and the Netherlands, where the top-four

retailers hold 60% or more of the total retail market, it pays to develop dedicated

servicing models for single retailers.

The ingredients market requires an even higher level of client focus. Assuming

minimum taste and quality levels have been met, the main criteria for success are how

the cheese is supplied and how well it is suited for the product applications it is used

in.


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Specialization is generally considered to be a strength that translates into high

processing efficiency, more consistent quality and better client service models. In

commodity cheeses, however, these factors are increasingly a given and there are few

opportunities to create a competitive edge. Specialization could even become a threat

when ad-hoc multi-product suppliers use specialists’ core markets to dispose of milk

surpluses triggered by global market drivers.

There is no easy way to avoid situations where single-product processors flood

their own core markets in times of oversupply. However, the new volatility of the

global dairy market requires companies to develop greater flexibility and versatility in

terms of sales opportunities, especially in times of oversupply. Cooperation and joint

ventures with complementary partners could be options to avoid extra investments

and an inefficient capital base.

CONCLUSION

The EU cheese market is changing from a comfortable place where all players

were able to find stability and steady growth to a market where the remaining growth

will only be captured by players that have more to offer than just volume and price. EU

cheese specialists need to reconsider their business models and try to incorporate new

growth areas, either in new geographies or in value-adding services.

Customers in retail, foodservice and food processing are only willing to guarantee

continued business or to pay premiums to suppliers that offer unique services in

logistics, cutting and packing or product applications. Value-adding services will be a

way for suppliers to mitigate the risks of increasing volatility in the commodity cheese

market and the pressure coming from other products generating similar returns to

cheese. For the large commodity cheese manufacturers, the paramount strategic

question remains whether to focus on the upstream part of the cheese value chain and

continue to improve the efficiency of the cheese-making process or to find ways to

develop their involvement with the downstream part of the chain by creating unique

selling points or tailored customer services. Their choice will determine whether the

downstream part of the chain remains populated by independent smaller specialists or

whether they will become consolidated into larger integrated businesses.


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The new reality in the global market dictates a balanced approach to any

additional milk produced in the EU in the years to come. Extra capacity in cheese can

only be justified if it is in line with EU market growth or when access to new export

markets is created. Growth opportunities in markets outside the EU are interesting,

but a dedicated country-by-country marketing effort will be required to provide a

stronger competitive edge against exports from more efficient milk production

regions.

REFERENCES

http://www.thedairysite.com/articles/2875/european-cheese-market


GIRA, 2011

ZMB, Rabobank, 2011

ZMB, Friesland-Campina, CBS, Rabobank, 2011

Dutch Dairy Board, 2011

http://www.thedairysite.com/articles/2875/european-cheese-market



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*Out of the Arab countries, the following countries are chosen: Saudi Arabia, United Arab

Emirates, Algeria and Egypt. The choice has been made taking into account the importation

volumes in this region.

CHEESE MARKET OVERVIEW OF THE UNITED ARAB EMIRATES

EXECUTIVE SUMMARY

The overwhelming use of dairy products is as primary food for direct

consumption and this has always been the case. Studies in Gulf countries amongst

national families show that there is a strong belief in the nutritional value of dairy food

and also a strong sense of these being traditional foods.

The traditional culinary repertoire consisted of robust dishes making good use of a

limited scope of resources. Dairy products had a role in these dishes; nearly half the

recipes in a book of substantially traditional UAE recipes contain at least one dairy

product.

The UAE Government has a keen interest in fostering the development of the

food processing industry having invested some USD 1.4 billion since 1994 to develop a

value-added food manufacturing sector to target local and re-export markets. The

result is that there are around 150 food processing plants in the country representing a

large chunk of the region’s food manufacturing capability. Dubai’s food processing

industry is worth approximately USD 3 billion and achieves growth of 11% per annum.

Major food processing plants include vegetable oils, soft drinks and juices, snack foods,

pasta, confectionary and dairy products.

The UAE foodservice market has risen by 11% per annum in the last two years

and accounts for USD 3.54 billion. This increase is in response to changing market

dynamics, rising demographics, commerce income and tourism and expanding

infrastructure developments (especially in Abu Dhabi). Meat, poultry and fish

accounted for 30% of purchases by the UAE’s food service sector, followed by dairy

products at 13% and rice, pasta, cereals and gourmet condiments also at 13%.

Food security dominates government priorities and economic planning: there

has been growing interest to be self-reliant by producing own food rather than

encouraging imports. The Abu Dhabi Government has invested heavily in over 8,000


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organic farms to ensure growers get the best in terms of assistance in agricultural

input and expertise to manage the source of the food supply chain.

This rapidly growing population and emerging affluence in the UAE has spiraled

the demand for high quality, organic and specialized foods. In addition, the

introduction of hypermarkets and superstores is reshaping the retail sector thus

providing a diverse range of food to supplement the taste preferences of a large

expatriate population. In recent years, there has been a shift in food habits from

traditional to Western-style convenience foods.


The diverse population in the United Arab Emirates encourages variety,

particularly in the cheese category. Regional cheeses such as Halloumi, Akawi and

Labneh are typically sold unpackaged at cheese counters. However, international

cheese varieties are sold both packaged and unpackaged in fairly equal proportions.

Edam, Brie and feta are the most popular varieties of Western cheeses and are widely

available across the United Arab Emirates.

Halloumi is another popular import from Cyprus. About 1,000 tons are exported

annually to Arab countries. A similar cheese, hellim, is made in the Lebanon and

Syria. In Cyprus the cheeses were traditionally prepared from sheep and goat’s milk

and after a minimum of 40 days in brine were considered to be ripe. Modern industrial

production uses sheep’s, goat and cow’s milk and the cheeses are not ripened. The

cheeses are produced by the pasta filata technique and are moulded into a flattish

block with a pronounced central fold. Dried mint is sometimes included in this fold and

the individual cheeses are vacuum packed with a little whey. The high protein content

ensures that this cheese does not melt when cooked making it ideal for grilling or frying

a mezze dish.


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Picture 1. Halloumi Cheese

Akawi is Fresh white salted/unsalted cheese shaped by cloth wrapping into

blocks of about 500g with rounded corners, made from cow's milk and originating in

the Lebanon. Production has spread to other countries and it is produced in several

forms, salted hard versions for eating and minimum salt versions which melt readily for

cooking. The low salt type is used for sweets, the salt being soaked out first. The

cheese is firm with a slightly crumbly texture and a mild flavor.

Picture 2. Akawi Cheese

Labneh is strained or thickened yoghourt, similar to a cream cheese. This is best

eaten with a drizzle of olive oil and some fresh flat bread, khubz. It can be used with

limitations as a substitute for cream and sour cream.

Picture 3. Labneh Cheese


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The most dynamic category in 2011 was unprocessed cheese. Growth in this

category was underpinned by the performance of unpackaged hard cheese, which

achieved the strongest current value growth of 8%. In addition to its higher unit price,

unpackaged hard cheese benefited from the influx of supermarkets and hypermarkets

such as Carrefour and Lulu, which improved the availability of such products.

The table below represents percentage value breakdowns of spreadable processed

cheeses by type.

Table 25. Spreadable Processed Cheese by Type in the UAE: % Value Breakdown % retail value rsp

Cheese Type Years




Cheese is typically purchased in supermarkets/hypermarkets in the United Arab

Emirates, with the channel accounting for 74% of value sales in 2011.

Supermarkets/hypermarkets carry a wide variety of cheese at lower prices than small

grocery stores, and also benefit from improved cold chain distribution. In recent years,

hypermarkets in particular have gained value share as a result of increased business at

fresh cheese counters.

Food sold in retail outlets consist of 75-80% imported consumer-ready

products, and 20-25% locally processed foods. Locally produced food, accounting for

only 15% of the market includes cultivated products (vegetables), animal products

(dairy products, poultry and eggs) and seafood.

Large retail chains such as Carrefour, Spinneys and Lulu dominate the big format

supermarket trade with a 50% share in the market. Store sales by independent

retailers (Co-ops) account for 21%, small grocery/convenience stores 28% and

wholesalers around 1%.




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Table 26. Sales of Cheese by Distribution Format in the UAE % retail value rsp












Kraft Food Dubai retained its leadership in 2010, gaining two percentage points

to reach a 27% value share. The company has built on the popularity of its processed

cheese products such as Kraft Singles and Kraft Original Cream Cheese Spread, and has

expanded the distribution of its unprocessed cheeses, particularly shredded cheeses

such as Kraft Mexican Taco Shredded Cheese and Kraft Italian Shredded Cheese. Kraft

has also introduced new varieties of spreadable cheese such as Philadelphia Chive &

Onion Cream Cheese and Kraft Grated Parmesan Cheese.

International brands perform well in the United Arab Emirates, benefiting from

strong brand awareness and widespread distribution. Kraft and Arla National Food

Products in particular have been successful in meeting the demands of the diverse

consumer base in the United Arab Emirates. Arla in particular has been successful in

the region due to the popularity of Puck processed cheeses.



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The table below represents the company shares occupied in cheese and/or

dairy production in the UAE.

Philadelphia Cream Cheese, produced by Kraft, was the most heavily advertised

cheese in 2011. The campaign ran for several months and featured banners in the Mall

of the Emirates and on the Jumeirah Beach Residence Walk. At weekends, planes flew

over the beach of the Jumeirah Beach Residence with banners advertising Philadelphia

Cream Cheese. The campaign proved successful in raising consumer awareness of the

product and presenting various uses for cream cheese.

Table 27. Cheese Company Shares in the UAE % retail value rsp

Company Years

2006 2007 2008 2009 2010 Kraft Food Dubai 22.5 23.1 23.4 25.0 27.0

Arla National Food Products Co LLC 29.0 26.2 22.0 23.0 23.3

Almarai Co Ltd 17.0 17.1 19.0 21.0 22.3 Unibel SA 15.0 14.0 14.3 15.0 13.0 Bel, Groupe 6.2 6.4 6.1 6.0 7.0 Others 10.3 13.3 15.2 10.0 7.4 TOTAL 100.0 100.0 100.0 100.0 100.0


COMPETITION FIELD

Food suppliers from all over the world vigorously compete for market share in

the UAE.


Increased health consciousness is pushing consumers away from processed

cheese and towards unprocessed cheese, which is considered healthier. Busy lifestyles

are also driving consumers to look for convenient food items. As a result,

manufacturers are launching sliced unprocessed cheese varieties, such as President

Sliced Mozzarella Cheese produced by United Food Industries Corp. Building on the

success of ready-to-use cheese varieties; Kraft has expanded its shredded unprocessed

cheese line to include Kraft Mexican Four Cheese and Kraft Shredded Colby Jack. These



78 | Page

products are generally priced higher than their bulk counterparts but have been gained

in popularity because of their ease of use.

The increased prevalence of supermarkets and hypermarkets has had a

profound impact on cheese in the UAE. International players such as Carrefour and

Waitrose have improved cold channel distribution chains and as a result have

expanded their offerings of both packaged and unpackaged hard cheeses. Consumer

demand has yet to be met, however, as consumers continued to limit how often they

eat out. As a result, consumers are dining at home more and are looking for higher-

quality ingredients.



Table 28. Sales of Cheese by Category in the UAE thsd tons

Production Years






The demand for processed cheese is higher than the one of the unprocessed

cheese. Among the sales of the unprocessed cheese in the UAE, a dominant place

takes soft cheese.



that represents only the total sales of cheese in the UAE.



79 | Page


The sales of cheese have grown constantly during 2006-2011. For 5 years the

sales of cheese in the UAE have increased by almost 38.5%.

PRICES

The price of the local cheese in the UAE per kilo is about USD 10.583.

Value growth continued to weaken in 2011, reaching nearly 7% in current value

terms. This was slower than the review period CAGR of 9%. The slowdown in value

growth was underpinned by inflation and price fixing as well as lower prices offered by

hypermarkets. Volume growth also slowed, although not as much, to 6% from a review

period CAGR of 7%. As the category matures, growth will follow population

fluctuations more closely.

Average unit price rose slightly in 2011 by just over 1%4. Growth was driven by

price increases in unprocessed hard cheese, which saw a rise of 2% in 2011. Improved

distribution has made special unprocessed hard cheeses, such as Frico from

FrieslandCampina Cheese LLC, increasingly available. New formats of imported

unprocessed cheeses have contributed to raising unit prices, such as Frico slices, which

have a higher price per gram than bulk sizes. Conversely, government-enforced price

caps and reductions have weakened unit price growth of processed cheeses to ensure

their affordability for lower-income earners.

3 Latest update: August 2012 4 For more detailed information, see Figure 3 in Annex.

2006 2007 2008 2009 2010 2011

Cheese 13.5 14.6 15.6 16.7 17.7 18.7

0.0

5.0

10.0

15.0

20.0

thsd

tons

Graph 8. Sales of Cheese in the UAE



80 | Page

IMPORTS

The table below represents the UAE’s imports of cheese and curds for 2005,

2007-2008. It is obvious that imports of this category have had a considerable rise

during the review period. In 2008 vis-à-vis 2007, the imported volumes of cheese and

curds have risen by up to 22.7%. The main exporters of cheese and curds to the UAE

are Saudi Arabia, Denmark, Australia, France, New Zealand and the USA.

Table 29. UAE’s Imports of Cheese and Curds

thsd USD

Exporters Imported Value in 2005

Imported Value in 2007


World 91308 148254 181884 Saudi Arabia 14281 23587 34932 Denmark 11639 20067 19009 Australia 14339 19919 13973 France 11291 11934 13764 New Zealand 7332 14194 11658 USA 5196 5338 10537 Netherlands 1596 5318 8925 Bahrain 4 18 8480 Morocco 1662 6068 8372 United Kingdom 5167 7382 7816 Egypt 3907 4955 7777 Cyprus 2861 3547 5350 Germany 2574 3856 5287 Czech Republic 1221 6470 5182 Italy 1609 2470 4844 Hungary 54 1966 2970 Poland 1912 2284 2639 Syrian Arab Republic 1446 2173 2197

India 245 511 1473 Austria 1093 1572 1416 Turkey 317 453 1082 Switzerland 183 497 682 Jordan 408 622 603 Bulgaria 291 584 403

Source: www.trademap.org

http://www.trademap.org/


81 | Page

EXPORTS

In 2008 vis-à-vis 2007, the UAE exports of cheese and curds have dropped

insignificantly — by circa 0.6%. The main importers are Oman, Maldives and Qatar.

Table 30. UAE Exports of Cheese and Curds

thsd USD

Importers Exported Value in 2005

Exported Value in 2007

Exported Value in 2008

World 7439 9878 9820

Oman 3036 3620 4111 Maldives 447 1525 858 Qatar 516 458 806 Ethiopia 38 164 435

United Republic of Tanzania

268 498 392

Iran (Islamic Republic of)

201 314 328

Czech Republic 0 0 263 Seychelles 102 946 255 Kenya 177 52 238 Kuwait 78 17 228 Turkmenistan 23 137 219 India 40 46 170 Pakistan 211 460 168 Saudi Arabia 174 22 150 Somalia 0 0 134 Côte d'Ivoire 0 100 133 Jordan 6 2 100


PROSPECTS

Thanks to the diversity of the population in the United Arab Emirates and

increasing sophistication in terms of tastes, it is expected that value-added products

will drive growth over the forecast period. Value-added products will focus on health

benefits and convenience. As increased concerns about obesity will continue to drive

growth in healthier hard unprocessed cheese, the demand for convenience will

stimulate growth of ready-to-use products, both processed and unprocessed.



82 | Page

The table below shows the forecast sales of cheese for the UAE in terms of

volume.

Table 31. Forecast Sales of Cheese by Category in the UAE thsd tons

Production Years







cheese by 20.4%. Processed cheese sales will increase by 18%, and unprocessed

cheese — by 23.3%.

The economy of the United Arab Emirates continues to recover, and with it

consumer confidence. As hectic lifestyles and long working hours continue, sales of

convenience products such as pre-sliced and pre-shredded cheeses will see growth.

Furthermore, as cold chain distribution becomes increasingly efficient throughout the

United Arab Emirates, rural areas will gain access to more and more cheese products,

increasing the demand for variety.

The sales forecast in cheese for 2015-2016 amounts to 4.4%. Whereas, the

CAGR for 2011-2016 amounts up to 4.8% and the total sales growth during 2011-2016

is going to be 26.6%. Cheese is expected to register a constant value CAGR of 4% over

the forecast period. This will be stronger than the 3% CAGR of the review period.

Slower growth will be a reflection of the category maturing rather than waning

demand in most areas. However, in some categories such as spreadable processed

cheese, which is expected to register a constant value CAGR of 3%, this will not be the

case. It is likely that growing health concerns will drive consumers away from

processed cheese spreads and towards cheese products that are considered healthier.

In constant terms unit prices are expected to fall. On the one hand, the number of

value-added products entering the marketplace will continue to increase over the



83 | Page

forecast period, as will milk prices, causing a rise in unit price. However, the

government has consistently limited price increases and is expected to continue to

maintain the affordability of staple food items. As a result, the types of cheese with the

highest volume sales will be most affected by price caps, which will keep unit price

growth low.

It is expected that new product launches will perform well in the short term.

Given the rapid increase in the number of shredded cheese SKUs offered by Kraft, it is

expected that the distribution of these products will continue to widen. Other ready-

to-use products, such as pre-sliced cheeses, are expected to see a strong performance

in value terms due to their higher unit pricing.

REFERENCES

http://www.enhg.org/alain/phil/dairy/dairy.htm

www.austrade.gov.au

http://www.numbeo.com/food-prices/country_result.jsp?country=United+Arab+Emirates


www.danderma.net

www.balticmaid.com

http://coinmill.com/AED_USD.html

www.trademap.org

http://coinmill.com/AED_USD.html#USD=1

http://www.enhg.org/alain/phil/dairy/dairy.htm

http://www.austrade.gov.au/

http://www.numbeo.com/food-prices/country_result.jsp?country=United+Arab+Emirates


http://www.danderma.net/

http://www.balticmaid.com/

http://coinmill.com/AED_USD.html


http://coinmill.com/AED_USD.html#USD=1


84 | Page

CHEESE MARKET OVERVIEW OF SAUDI ARABIA

EXECUTIVE SUMMARY

Cheese benefited from a growing focus on health and wellness and nutrition in Saudi

Arabia towards the end of the review period. Many consumers are switching from

jams and preserves to spreadable processed cheese with bread. Consumers are

concerned about the high sugar content and use of preservatives in jams and

preserves, viewing reduced fat spreadable processed cheese as a healthier option. This

trend particularly benefited cream cheese, which has a healthier and more natural

positioning in comparison to reconstituted cheese and also offers a wider range of

reduced fat variants. Consequently, cream cheese extended its dominance in

spreadable processed cheese by a further two percentage points over the previous

year, to account for 72% value share in 2011.

Spreadable processed cheese saw the strongest performance in 2011 over the

previous year, with volume and current value sales growing by 7% and 14%

respectively. This was due to strong new product development in the product area

towards the end of the review period. Al Safi Danone for example entered this product

area with cheese packaged in a glass jar, while Kraft introduced new and innovative

squeezable packaging. Saudi New Zealand Milk Products meanwhile launched several

new flavors for its La Vache Qui Rit triangle portion packs.

Cheese is led by spreadable processed cheese in terms of retail volume sales in 2011,

with this product area accounting for 44% volume share. This product area benefits

from a strong position for domestic players and is led by Almarai. Traditional cheese

types popular in Saudi Arabia include white/feta cheese and Haloumi, with these

accounting for 17% and 51% value share in unprocessed cheese in 2011. Cheese is

mainly consumed with breakfast or in salads. Feta notably benefited from a growing

consumption of salads towards the end of the review period as consumers sought to

eat healthier diets, gaining a percentage point in share in the year.

Within hard cheese, sales are meanwhile dominated by cheddar, which is offered in

both cans and in a block format. Cheddar accounted for 8% value share in overall

unprocessed cheese in 2011 and saw a strong performance, with a gain of a

percentage point over the previous year. Cheddar benefited from widening use in


85 | Page

cooking towards the end of the review period, with consumers showing a growing

interest in the use of full-flavored cheddar when preparing pasta and hot sandwiches.


The graph below represents cheese and fresh cows’ milk production in Saudi Arabia for

2006-2011.


During 5 years fresh cows’ milk production in Saudi Arabia has increased by 71%.

Cheese production growth rates have also increased rapidly — up to 105% during this

period.

The per capita cheese production of Saudi Arabia is portrayed below.


2006 2007 2008 2009 2010 2011

Production of Cheese 87.5 87.5 127.5 167.5 167.5 179.5

Production of Fresh Cows' Milk 1031.4 1095.1 1370.4 1508.4 1670.0 1765.8

0200400600800

100012001400160018002000

thsd

tons

Graph 9. Cheese and Fresh Cows' Milk Production in Saudi Arabia

2006 2007 2008 2009 2010 2011

World 2.9 3.0 3.0 2.9 2.9 2.9

Saudi Arabia 3.6 3.5 5.1 6.5 6.4 6.7

kg

Graph 10. Per Capita Production of Cheese in Saudi Arabia




86 | Page

Until 2007, the cheese production in Saudi Arabia was close to the one of the world.

Since 2008, the figure has increased rapidly.

The table below represents percentage value breakdowns of spreadable

processed cheeses and unprocessed cheeses by type.

Table 32. Spreadable Processed Cheese by Type in Saudi Arabia: % Value Breakdown

% retail value rsp

Cheese Type Years



The share of cream cheese in Saudi Arabia dominates over the share of reconstituted

cheese. To say more, the share of cream cheeses in Saudi Arabia tends to increase.

The following table refers to unprocessed cheeses in Saudi Arabia.

Table 33. Unprocessed Cheese by Type in Saudi Arabia: % Value Breakdown

% retail value rsp

Cheese Type Years

2009 2010 Blue Cheese 4.0 4.0 Cheddar 6.0 7.0 Edam 5.0 6.0 Feta 15.0 16.0 Gouda 4.0 5.0 Haloumi 50.0 51.0 Others 16.0 11.0 TOTAL 100.0 100.0


Among unprocessed cheeses in Saudi Arabia, Haloumi cheese is a leader with

50% share in 2009. The same refers to 2010 with 51%. The 2nd place belongs to Feta

cheeses.




87 | Page



Table 34. Sales of Cheese by Distribution Format in Saudi Arabia % retail value rsp






***Forecourt Retailers 0.8 2.0 2.0 2.0 1.8 0.8 **Other Grocery Retailers 7.7 8.8 9.0 9.4 6.2 6.5



*Vending — — — — — — *Home Shopping — — — — — —



According to the data of 2011, supermarkets/hypermarkets are the main places

where cheese in Saudi Arabia is sold. Small grocery retailers are in second place.

The table below represents the company shares occupied in cheese and/or dairy

production in Saudi Arabia.

Table 35. Cheese Company Shares in Saudi Arabia % retail value rsp

Company Years

2006 2007 2008 2009 2010 Almarai Co Ltd 17.0 18.0 21.1 22.2 23.2 Saudi New Zealand Milk Products Co Ltd 16.2 16.0 15.0 16.5 16.0 Kraft Jacobs Suchard Ltd 12.7 11.8 11.5 12.0 12.1 Deemah - United Food Industries Corp Ltd 11.1 10.4 9.9 10.2 9.9 Danya Foods Ltd 9.1 9.7 6.8 8.3 7.9 Sunbulah Food & Fine Pastries Manufacturing Co Ltd 6.6 6.4 6.1 7.1 7.3



88 | Page

Hadju Hungarian Cheese Co 3.5 3.5 3.4 4.0 4.0 Halwani Bros Co 3.9 3.4 3.5 3.8 3.7 Frico International LLC 1.5 1.7 2.1 2.6 3.0 National Agricultural Development Co (NADEC) 1.2 1.4 1.5 1.5 1.5 Al Othman Agricultural & Processing Co 2.6 2.8 3.2 1.8 1.4 Lactalis International 0.9 0.9 0.9 1.0 1.0 Saudi Dairy & Foodstuff Co Ltd (SADAFCO) 3.0 2.5 2.2 0.9 0.8 Al Mazrah Dairy 0.8 0.9 1.0 0.7 0.7 Bonlac Foods Ltd 0.8 0.7 0.7 0.6 0.6 Entremont, Groupe 0.8 0.6 0.6 0.6 0.5 Picon SA 0.7 0.7 0.6 0.6 0.5 Emborg Foods Middle East 1.0 0.7 0.5 0.4 0.4 Salman S Al Rashed Co For Food Industries 0.1 0.3 0.5 0.4 0.3 AL Mawanea Trading Services Co 0.2 0.2 0.4 0.3 0.3 National Food Co (Americana) 0.2 0.2 0.4 0.3 0.3 Pinar Dairy Food Co — — 0.3 0.3 0.3 Bega Co-operative Society Ltd — 0.1 0.2 0.2 0.2 Bongrain SA 0.1 0.1 0.1 0.1 0.1 Other Private Label 0.8 0.9 1.0 1.0 0.9 Others 5.3 5.9 6.3 2.7 3.0 TOTAL 100.0 100.0 100.0 100.0 100.0


“Almarai Co Ltd” is a leader having the most share package in cheese production.

“Saudi New Zealand Milk Products Co Ltd” is in the 2nd place.




Table 36. Sales of Cheese by Category in Saudi Arabia tons

Production Years




Spreadable Unprocessed Cheese 54.9 101.1 125.9 135.9 143.9 149.7 Cheese 96824.5 106147.1 115365.2 124011.6 133700.1 141929.5





89 | Page

The demand for processed cheeses is higher than the one of the unprocessed

cheeses in Saudi Arabia. Among the sales of the unprocessed cheese in Russia, a

dominant place takes soft cheese.



that represents only the total sales of cheese in Saudi Arabia.


PRICES

Unit price rose above the level of inflation in 2011 over the previous year, with

constant value unit price rising by 1% for overall cheese. This was due to increasing

raw material costs and currency fluctuations, with many products being imported.

Lower-priced product areas typically saw a stronger unit price increase than higher-

priced products, which offer a wider margin for cost increases. Consequently, soft

cheese and spreadable processed cheese saw 1% and 2% constant value unit price

growth in 2011, with these products having a unit price of SAR 23/kg (or circa USD

6.1/kg) and SAR 30/kg (or circa USD 8/kg) in the year. Packaged hard cheese was

meanwhile higher priced with a unit price of SAR 45/kg (or circa USD 12/kg) in 2011

and saw less than half a percentage point increase in constant value unit price5.


0.020000.040000.060000.080000.0

100000.0120000.0140000.0160000.0

2006 2007 2008 2009 2010 2011

tons

Graph 11. Sales of Cheese in Saudi Arabia



90 | Page

IMPORTS

The table below shows that the imports of cheese and curd in Saudi Arabia

have considerably risen in 2010. Vis-à-vis 2009, the volumes have increased by up to

37.5%. The main exporters are Egypt, Bahrain, Denmark, Poland, New Zealand and

Australia.

Table 37. Cheese and Curd Imports by Saudi Arabia thsd USD

Exporters Imported Value in

2006

Imported Value in

2007

Imported Value in

2008

Imported Value in

2009


World 332870 369648 356260 353128 485570 Egypt 43187 58862 79301 79915 87954 Bahrain 0 0 39433 91005 78319 Denmark 39699 62722 56335 68524 75193 Poland 25204 30637 36574 39656 41659 New Zealand 32403 39967 45778 29672 36661 Australia 96556 97046 65417 14862 31112 France 25069 22431 0 0 28616 USA 5707 7347 0 0 25945 Ireland 609 1107 6079 7805 13762 Germany 15256 5296 0 0 13134 Hungary 7372 8620 13089 10689 12883 Canada 4593 4451 0 0 7763 Netherlands 5376 4001 0 0 4396 Syrian Arab Republic 732 997 0 0 3914

Czech Republic 4211 4628 2241 2484 3851 Cyprus 1789 2123 3203 3702 3849 Morocco 15008 7938 7669 4651 3300


EXPORTS

The export volumes of cheese and curd in Saudi Arabia have a trend of steady

rise. This is shown in the table below. The exports have almost tripled in 2010 vis-à-vis

2006.

Table 38. Cheese and Curd Exports of Saudi Arabia thsd USD

Importers Exported Value in

2006

Exported Value in

2007

Exported Value in

2008

Exported Value in

2009

Exported Value in

2010



91 | Page

World 121609 164977 187495 224808 329523 Chinese Taipei 0 18 0 224808 266670

Area Nes 0 7 187227 0 62713 Source: www.trademap.org

PROSPECTS

Reduced fat products are expected to become increasingly significant in cheese

during the forecast period. These products are likely to prove most successful in

spreadable processed cheese, with reduced fat cream cheese benefiting from many

consumers switching from jams and preserves to these products when eating bread.

However, reduced fat cheese is also expected to emerge in a wider range of product

areas. The strong 6% volume CAGR expected for soft cheese during the forecast period

is for example likely to be driven by reduced fat variants, particularly within

mozzarella.

The forecast period is expected to see a slight slowing of volume growth in

comparison to the 8% CAGR seen during the review period, although at 6% CAGR

growth will remain dynamic. Growth is expected to slow mainly due to a higher sales

level. In absolute terms, the forecast period is expected to see a stronger volume

increase in comparison to the review period.

Dynamic growth in cheese will continue to be underpinned by improved cold

chain systems in the country. More supermarkets/hypermarkets and convenience

stores are expected to open in small towns, while independent small grocers are likely

to increase their refrigerated display and storage capacity. Consequently, consumers

are expected to gain access to a widening range of good quality cheese during the

forecast period.

Spreadable processed cheese is expected to continue to see the strongest

growth during the forecast period, with a forecast period CAGR of over 7%. This

product area is expected to benefit strongly from the healthy image of reduced fat

cream cheese, which is expected to attract a growing number of weight-conscious

consumers during the forecast period. Spreadable processed cheese will also continue

to benefit from the strong domestic players in this product area such as Almarai, with

these players offering strong distribution and affordable prices.



92 | Page

There is also expected to be strong new product development in spreadable

processed cheese during the forecast period. Kraft Jacobs Suchard’s launch of a

squeezable bottle for its Kraft brand is expected to inspire a raft of similar launches.

There could thus well be a shift from glass jar packaging within spreadable processed

cheese to squeezable tubes.

There is expected to be a slight increase in constant value unit price for cheese

during the forecast period, with an overall increase of less than 1%. Players will keep

price increases to a minimum due to increasing price competition in this dynamic

product area. The strongest growth will be seen in spreadable processed cheese and

soft cheese. This will partly be due to these product areas’ low unit price, with smaller

profit margins leaving less room for players to absorb predicted increases in raw

material prices. In addition, these product areas are expected to benefit from

consumers trading up to reduced fat variants and, within spreadable processed

cheese, also to value-added packaging formats such as squeezable tubes.

The table below shows the forecast sales of cheese for Russia in terms of

tonnage.

Table 39. Forecast Sales of Cheese by Category in Saudi Arabia tons

Production Years




Spreadable Unprocessed Cheese 156.0 162.0 168.4 175.5 183.1 Cheese 151045.2 160643.0 170953.7 182333.1 193978.6



cheese by 28%. Processed cheese sales will increase by approximately 32%, and

unprocessed cheese — by circa 24%.



93 | Page

REFERENCES

http://themoneyconverter.com/USD/SAR.aspx


www.trademap.org http://coinmill.com/SAR_USD.html#USD=1

CHEESE MARKET OVERVIEW OF ALGERIA

EXECUTIVE SUMMARY

Formerly, cheese was perceived as a premium product, as it was mostly

imported, and few could afford it. The increasing production of domestic cheese also

led to launches of new product ranges, including development of the category of

spreadable processed cheese by PRIPLAIT with several new flavors such as Roquefort,

herbs and shrimp and the increasing production of soft cheese Président that recently

started production in Algeria.

The development and increase in domestic production that has made cheese

be accessible to more consumer groups.

As domestic cheese continued to increase over the review period and consumers that

previously only bought imported cheese started to consume domestically produced

cheese, cheese volume sales saw growth. Domestically produced cheese has come a

long way in terms of quality and this is the reason that cheese volume sales are

starting to see good growth. In addition, the increasing quality and production of

domestically produced cheese has meant that an increasing number of consumers are

getting used to eating more cheese on a regular basis.

Unpackaged cheese can be found in outdoor markets essentially and in rural

areas, often as homemade spreadable cheese made of cow’s milk.

However, domestic production of camembert has begun and this cheese is eaten as a

dessert.


The per capita cheese production of Algeria is close to zero level.

http://themoneyconverter.com/USD/SAR.aspx



http://coinmill.com/SAR_USD.html#USD=1


94 | Page

Unpackaged cheese can be found in outdoor markets essentially and in rural areas,

often as homemade spreadable cheese made of cow’s milk.

Spreadable processed cheese is the most common cheese in Algeria, used on bread, in

sandwiches.

The tables below represent percentage value breakdowns of spreadable


Table 40. Spreadable Processed Cheese by Type in Algeria: % Value Breakdown % retail value rsp

Cheese Type Years



We can see that the reconstituted cheeses are less preferable than the cream ones.

The graph below enables to compare the production of cheese and fresh cow’s milk.


The production of cheese has stayed on the same level since 2006. But the

production of fresh cows’ milk has had some fluctuations especially in 2008; about 4%

decrease in 2008 did not make an obstacle to increase the volumes up to 17% in 2009.

Despite the crisis, the volumes of fresh milk production went on boosting.

2006 2007 2008 2009 2010 2011



0200400600800

100012001400160018002000

thsd

tons

Graph 12. Cheese & Fresh Cows' Milk Production in Algeria




95 | Page

The private sector played a dominant role in the Algerian dairy sector. Private sector

has typically played a major role in the production of processed dairy products (yogurt,

cheese, butter, sour milk, and dairy desserts). Because of the low fixed prices for

pasteurized fluid milk (A.D6 25/liter), (USD 0.34/liter), the private sector would rather

produce these more profitable processed products. However, State- owned group

Giplait remains the leader in the pasteurized reconstituted milk market with 60%

share.



Table 41. Sales of Cheese by Distribution Format in Algeria % retail value rsp





***Convenience Stores — — — — — — ***Independent Small Grocers 68.4 71.3 71.3 71.2 71.3 71.3


*Non-Grocery Retailers 0.1 0.3 0.1 0.4 0.4 0.8 **Health and Beauty Retailers — — — — — —

**Other Non-Grocery Retailers 0.1 0.3 0.1 0.4 0.4 0.8 Non-Store Retailing — — — — — —




Cheese sales continue to be essentially generated through independent small

grocers with 71% of value sales. The sheer size of this retail channel gives it a big

6 A.D stands for Algerian dinar.



96 | Page

advantage compared to supermarkets/hypermarkets; sales through which are growing

but still generate just 16% of value sales.

The table below represents the company shares occupied in cheese and/or

dairy production in Algeria.

Table 42. Cheese Company Shares in Algeria % retail value rsp

Company Years

2006 2007 2008 2009 2010 Unibel SA 25.1 25.7 27.2 27.9 28.9 Production Industrielle de Produits Laitiers Sarl (PRIPLAIT) 23.6 22.7 22.0 21.0 21.4

Falait Sarl 12.1 12.0 11.7 11.6 11.7 Lactalis, Groupe 10.5 10.5 10.8 11.0 11.2 La Gracieuse Vache Sarl 10.7 10.6 10.4 10.0 9.9 La Jeune Vache Sarl 10.4 10.4 10.1 9.4 9.1 Giplait Spa 4.9 4.8 4.7 4.6 4.5 Others 2.8 3.3 3.2 4.5 3.4 TOTAL 100.0 100.0 100.0 100.0 100.0


Standard and economy brands strongly compete in cheese. The three leading

companies manufacture both standard and economy brands that are purchased by all

income groups. The reason for this is that there is not much difference in price

between standard and economy brands. Premium brands are few in cheese,

represented only by imported brands, although sales are small as most upper income

consumers prefer to buy premium cheese abroad and bring it back home with them

rather than the imported premium products in Algeria. There is no private label in

Algeria.

Unibel SA remained the key player in 2010 and generated 29% of value shares,

followed closely by PRIPLAIT with a 21% value share. Unibel, with its brand La Vache

Qui Rit, gained from the strong brand recognition advertised for a long time through

French TV channels available in the majority of households. Besides, since it started

manufacturing in Algeria, its prices dropped considerably and became affordable to

the majority. PRIPLAIT also gained share thanks to its regular product development. It

launched its product in three new flavors: Herbs, Roquefort and shrimp.



97 | Page

Unibel, the current category leader, saw the biggest value sales increase in 2010 and

reinforced its leading position thanks to the strong marketing presence in the country.

The company regularly advertises on local TV and is present on international television

channels that helped it to continue to increase its volume sales for La Vache Qui Rit.

The standard price band of this brand also helped it to gain more sales.

Cheese leaders are split between international and domestic brands, despite

the key player being an international brand. However, the majority of brands are

manufactured in Algeria, which gives a price advantage over imported brands.

International brands such as La Vache Qui Rit enjoy international brand recognition

and strong advertising through domestic and international television channels that

greatly influences consumers’ choice since there are only few competitors which can

afford such intensive marketing for mid-priced products. La Vache Qui Rit is produced

domestically so is able to keep its product prices competitive.

The domestic company PRIPLAIT developed its product range of spreadable

processed cheese with three new flavors: Herbs, Roquefort and shrimp. The company

saw fast growth in volume and value sales as a result of offering its products in a

variety of popular flavors. These launches helped to reinforce its presence within the

top three companies in 2010. However, despite the launch of three new flavors,

advertising for was limited to billboards in large cities and a small advertising campaign

that excluded radio and television spots as these were too expensive.


Spreadable processed cheese is an area on which domestic production is

focusing, as most domestic production facilities cater more for this type of cheese.

Local consumers also tend to use cheese on bread and in sandwiches, so the

spreadable format is more appropriate to domestic consumers’ needs.

Consumers increasingly buy packaged cheese, particularly since the

development of domestic manufacturers that offer packaged cheese at affordable

prices.

Cream cheese will represent 65% of spreadable processed cheese sales in 2011.

This is the type that is in the majority manufactured in the country and it is also

cheaper that reconstituted cheese.


98 | Page



Table 43. Sales of Cheese by Category in Algeria thsd tons

Production Years







The growing trend of the sales is obvious.

IMPORTS

Hard cheese remains essentially imported and is too expensive for the majority. While many development programs are setting up in Algeria, the dairy industry

still relies on imported milk powder for its needs and dairy imports still represented

17% of the total food imports for the first six months of 2011. Dairy imports totaled

15% of the total food imports in 2010. Total dairy imports in 2010 reached USD 991

0.05.0

10.015.020.025.030.035.040.045.0

2006 2007 2008 2009 2010 2011

thsd

tons

Graph 13. Sales of Cheese in Algeria




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million out of which USD 308 million for non fat dry milk (NFDM), USD 591 million for

whole milk powder (WMP), USD 53 million for cheese, USD 31 million for butter and

fats, USD 8 million for other dairy products (whey, buttermilk).

The following table shows also that butter imports increased compared to the

same period last year. In fact, AMF imports increased compared to last year. In 2010,

total butterfat imports reached 4714 tons of which 3,131 tons of butter and 1,582 tons

of anhydrous milk fat (AMF). This calendar year 2011, 6,315 tons of butterfat have

been imported, AMF reached 3,329 tons. This shows that more powder and AMF were

imported to increase production of pasteurized reconstituted fluid milk.

Table 44. Cheese & Butter Imports Comparison in 2010 and 2011 tons

Country Jan-Jun, 2010 Jan-Jun, 2011

Cheese Butter Cheese Butter Ireland 4773 20 3535 434 New Zealand 1057 2118 1157 1680 Netherlands 3473 125 3561 242 France 494 1008 605 1500 Germany 218 25 234 - Australia 140 260 1340 20 Austria 308 - 495 - Argentina 50 321 25 244 Poland 488 - 425 - Denmark 30 25 65 72 U.S. 0 18 - - Italy 3 - 6 - Belgium - - - - Great Britain 175 79 156 300 Spain - - - 600 Uruguay - 625 - 950 Others 33 90 81 273 TOTAL 11242 4714 11685 6315

Source: Algeria Official Trade Data

Imports of cheese are more or less stable as the domestic processing industry

has expanded over the past several years. In the first six months of 2011, 61% of the

imported cheese was cheese for processing destined to the processing industry.

Origins of dairy imports are still the same. Most of the non fat dry milk powder comes

from the EU countries, essentially France with 40% of the market share, followed by


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Belgium with 21% and Poland with 19%. Whole milk powder originates from New

Zealand (32%), followed by Argentina with 16% market share and Great Britain (10%)

and France (9%). Most of the cheese comes from Ireland, Netherlands and New

Zealand. Butterfat originates from New Zealand and France.

The imports volumes of cheese and curds in Algeria have increased

considerably for 2009-2011. In 2011 vis-à-vis 2009, the volumes have boosted by up to

61%. The major exporters are the Netherlands, Ireland and New Zealand.

Table 45. Cheese and Curds Imports of Algeria

thsd USD

Exporters Imported Value in

2007

Imported Value in

2008

Imported Value in

2009

Imported Value in

2010

Imported Value in

2011 World 44855 39597 39110 52941 63004

Netherlands 7941 9644 8850 12509 19419 Ireland 10835 4505 12019 21675 16108 New Zealand 12663 10050 7360 5633 9741 France 2991 4355 3518 4630 5871 Australia 1815 2731 669 1127 3811 Poland 2520 2744 1968 3592 3506 Austria 343 181 1084 904 1714 Germany 1324 1798 2048 752 1311 UK 0 0 184 239 468 Denmark 95 95 171 267 411 Tunisia 251 266 397 258 325 Italy 106 120 99 112 210 Argentina 1365 305 234 623 102


EXPORTS

The exports of cheese and curds by Algeria have abruptly increased in 2011.

This is shown in the table below. The main importers are Libya and Tunisia.

Table 46. Cheese and Curds Exports by Algeria

thsd USD

Importers Exported Value in

2007

Exported Value in

2008

Exported Value in

2009

Exported Value in

2010

Exported Value in

2011 World 5 25 24 1 215

Libya 0 25 0 0 160



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Tunisia 0 0 0 0 55 Source: www.trademap.org

PROSPECTS

The table below represents the forecast sales of cheese for Russia in terms of

volume.

Table 47. Forecast Sales of Cheese by Category in Algeria thsd tons

Production Years







cheese by up to 50%. Processed cheese sales will increase by more than 60%, and

unprocessed cheese — by 31.4%.

Cheese is expected to record a strong 11% CAGR in both volume and constant

value terms over the forecast period. Prices are expected to stabilize over the forecast

period due to better control and improved domestic production of raw materials such

as powder milk and liquid milk. Domestic manufacturers are likely to enter into intense

competition amongst them, which is likely to help stabilize milk prices leading to

volume growth over the forecast period. Should they succeed in stabilizing milk prices

whilst providing more cheese on the market, sales will continue to grow as cheese will

be increasingly available for all income groups.

The forecast period CAGR of 11% will be higher than the 10% value CAGR seen

over the review period. Cheese is expected to see numerous new launches, particularly

in spreadable processed cheese, the most popular format, with new flavor launches

expected on the back of the launch of the shrimp, herb and Roquefort launches by

PRIPLAIT. Hard cheese is likely to see better growth as unit prices are expected to




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stabilize alongside an expected increase in consumer purchasing power that will help

to keep growth rates buoyant.

Cheese unit prices are expected to fall over the forecast period thanks to an

expected dip in milk prices over the forecast period. Whilst in 2011, dairy

manufactures suffered from price increases, the expected increases in domestic

production of milk products and their derivatives is expected to force down prices for

milk and cheese.

Because of their high number and wide geographical presence, independent

small grocers are expected to remain the leading distribution channel over the forecast

period. However, because of rapid development of supermarkets/hypermarkets,

which is changing food shopping habits, cheese sales through this channels are

expected to increase, gaining share from independent small grocers.

Because volumes of spreadable processed cheese reached high levels already in

2011, it is the development of domestic production of soft cheese, particularly

camembert and brie that is expected to develop over the forecast period. This

category remains led by imported products, essentially from France with high prices

and domestic production is not able yet to reach the international quality of the

product. However, because the demand is high, several manufacturers are expected to

start this activity, particularly because of the expected decline of milk prices,

consumers will be able to afford other categories than spreadable processed cheese.

The launch by PRIPLAIT of a wider product line is expected to show good

performance, taking advantage of the current and expected strong growth of

spreadable processed cheese. However, because the category is already present with

several brands, other manufacturers are not expected to continue launching products

in the same category but diversify to other cheese categories in order to attract new

consumers into new products instead of making them switch to other brands in the

same category.


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REFERENCES

http://www.thecattlesite.com/articles/2949/algeria-dairy-and-products-annual-report-2011


www.trademap.org

Algeria Official Trade Data

CHEESE MARKET OVERVIEW OF EGYPT

EXECUTIVE SUMMARY

Cheese is an important part of the Egyptian diet and many people eat some

cheese with at least one meal a day. Most cheese is consumed either on its own or

with bread. In 2011, cheese is expected to see retail volume sales growth of 20%,

significantly stronger than the 10% CAGR recorded over the review period. Strong

retail volume sales growth over the review period was driven by on-going population

growth and the traditionally high consumption of cheese in the country. However, the

biggest growth comes from soft cheese. Traditional varieties such as Roumi or white

cheese, which fall under soft cheese, have traditionally been sold unpackaged.

However, in line with other dairy categories such as milk, many of these traditional

varieties are increasingly being sold packaged rather than loose. Not only unit prices

are similar to unpackaged varieties, but many consumers find packaged varieties to be

more hygienic and many retailers such as Spinney’s now sell them packaged in large

amounts as well as smaller sizes, catering most consumers.

Spreadable processed cheese, which is particularly popular amongst families

with children, who tend to eat it at breakfast and lunch, is expected to see a retail

volume sales growth of 3% in 2011. A strong performance in the early months of 2011

is expected to lead companies to continue to launch value-added products and a

variety of new flavors, such as cheddar spread. Spreadable processed cheese is a

relatively mature category within packaged foods, with a relatively high penetration

rates compared to other categories within packaged foods, manufacturers have to

innovate with new flavors in order to gain further growth, particularly in volume terms.

http://www.thecattlesite.com/articles/2949/algeria-dairy-and-products-annual-report-2011




104 | Page

Unspreadable processed cheese continued to be one of the smallest subcategories

within the cheese market in Egypt. The reason for this is that the majority of Egyptian

consumers are used to fresh cheeses that are full of flavor. Unspreadable processed

cheese generally has a milder flavor and is more expensive, keeping the majority of the

population from purchasing it. Packaged hard cheese remains the smallest category in

both value and volume terms, as consumers are still more used to buying unpackaged

varieties.

Soft cheese achieved a strong performance during the early months of 2011

and is expected to be the most dynamic category in retail volume and value terms over

the year as a whole, with predicted growth of 33% and 38% respectively. In Egypt, soft

cheese largely consists of white cheese, which forms an important part of the typical

Egyptian diet and it is frequently used as a component of both main courses and

salads. White cheese- like varieties continues to lead the category.

One of the main reasons for the growth of white cheese, and its subsequent

effect on soft cheese as a category, is the fact that many consumers are making the

switch from unpackaged variants (not included in Euromonitor International’s

packaged foods definitions), to packaged varieties. Consumers are increasingly opting

for packaged varieties as they regard them as being of higher quality and appreciate

being able to see information about the products, such as the expiry date and the

nutritional content.

On the other hand, many Egyptians are becoming more sophisticated in their

tastes, moving from soft white cheese to other international varieties, which are

gaining in popularity. For example, Dutch cheeses, including Edam and Gouda, are now

widely available in modern grocery retailers such as Spinneys and Carrefour.


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The per capita cheese production of in Egypt is represented below.


The per capita cheese production peaked in 2008 amounting to 13.7 kilos. The

following year it amounted to 12.2 kilos. A slight increase was made in 2011 — 12 kilos

per capita.

The table below represents percentage value breakdowns of spreadable


Table 48. Spreadable Processed Cheese by Type in Egypt: % Value Breakdown % retail value rsp

Cheese Type Years



We can see that the reconstituted cheeses are more preferable than the cream

ones by the Egyptians.

Among the unprocessed cheeses, the most preferable one is Feta cheese with

67% and 65% shares in 2009 and 2010 relatively. Cheddar cheese is in the second place

with 10.5% and 11% in 2009 and 2010 relatively.

2006 2007 2008 2009 2010 2011

World 2.9 3.0 3.0 2.9 2.9 2.9

Egypt 10.1 12.7 13.7 12.2 11.9 12.0

kgGraph 14. Per Capita Production of Cheese in Egypt




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Table 49. Unprocessed Cheese by Type in Egypt: % Value Breakdown

% retail value rsp

Cheese Type Years

2009 2010 Blue Cheese 6.0 6.3 Cheddar 10.5 11.0 Feta 67.0 65.0 Fresco 0.7 0.9 Goat 0.6 0.6 Gouda 8.0 8.5 Labneh 0.4 0.4 Mozzarella 2.0 2.2 Parmesan 0.2 0.3 Ricotta 0.8 0.9 Others 3.8 3.8 TOTAL 100.0 100.0


The graph below enables to compare the production of cheese and fresh cow’s milk.


The cheese production volumes in Egypt have not changed dramatically since

2006. Only in 2008, the cheese production volumes increased by up to 10.3%, but the

volumes increased (by 9.5%) in the following year and stayed stable in 2010 as well. In

2011, the volumes increased by 2.7%.

2006 2007 2008 2009 2010 2011



0500

100015002000250030003500

thsd

tons

Graph 15. Production of Fresh Cows' Milk & Cheese in Egypt




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Fresh cows’ milk production peaked in 2008 amounting 3211.4 thousand tons

and decreased by 12.7% in 2009. The following years were more productive for the

sector.



Table 50. Sales of Cheese by Distribution Format in Egypt % retail value rsp





***Convenience Stores — — — — — — ***Independent Small Grocers 40.0 40.0 39.0 38.5 38.0 37.0

***Forecourt Retailers 0.8 0.7 0.3 — — — **Other Grocery Retailers 14.2 13.5 13.4 13.7 14.0 14.5



*Vending — — — — — — *Home Shopping — — — — — —



The table below represents the company shares occupied in cheese and/or dairy production in Egypt.

Table 51. Cheese Company Shares in Egypt

% retail value rsp

Company Years

2006 2007 2008 2009 2010 Best Cheese Co for Dairy Products SAE 15.0 15.1 13.7 13.9 15.4 Royal Friesland Foods NV 8.3 9.9 10.2 10.5 9.9 Middle East Dairy & Foodstuff Co 12.0 11.2 9.1 8.9 9.8 Bel Egypt SAE 8.2 8.3 7.6 7.4 6.6 El Manzala Co 6.4 6.9 7.1 7.3 6.3 Arab Dairy Co 4.1 4.8 5.9 7.3 6.2



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Arabian Food Industry Co (Domty) 1.5 2.4 3.2 4.7 6.0 Katilio Co for Dairy Products 3.9 4.2 5.0 5.6 5.1 Juhayna Food Industries 0.9 1.2 2.9 3.5 3.2 Lactalis, Groupe 1.3 1.9 2.1 2.2 2.0

Misr Octobre Co for Food Industries (Elmisrieen) 0.7 0.8 1.1 1.5 1.8

Bongrain SA 4.8 4.1 3.4 2.2 0.9 Seclam Co 1.2 1.2 1.3 1.4 0.7 Cheese Partners Holland 0.4 0.4 0.6 0.6 0.6 Sze Hing Loong Development Ltd 0.2 0.3 0.4 0.4 0.5 Unibel SA 0.3 0.3 0.4 0.4 0.4 Hochland AG 0.5 0.5 0.4 0.4 0.4 Egyptian International Co for Food Industries 0.3 0.4 0.4 0.4 0.4

International Co for Agro-Industrial Projects 0.2 0.5 0.5 0.4 0.3

Egyptian Co for Advanced Foodstuff Industries (Faragello) 0.2 0.1 0.0 0.1 0.1

Gebrüder Woerle GesmbH 0.1 0.1 0.1 0.1 0.0 Friesland Coberco Dairy Foods Holding NV 0.0 0.0 0.0 0.0 0.0 El Tayeb Dairy 0.3 0.5 0.4 0.4 — Arla Foods Amba 0.7 0.2 — — — Arab Food Industries Co Ltd — — — — — Mashreq Des Produits Laiteriers Borg El Arab — — — — — Others 28.6 24.6 24.4 20.3 23.3 TOTAL 100.0 100.0 100.0 100.0 100.0


Best Cheese Co for Dairy Products SAE led the cheese category in Egypt with a

15% value share in 2010. The company led the processed cheese category with a 50%

share and the spreadable processed cheese category with a 64% share. Its most

popular brands are Teama and Président, both processed cheese brands.

Foreign players continued to play a leading role in cheese in Egypt in 2011, as

leading manufacturers such as Best Cheese Co for Dairy Products SAE is owned by

French dairy giant Lactalis and second player is Dutch multinational Royal Friesland

Foods NV. Domestic manufacturers are usually more focused on selling unpackaged

varieties, whilst foreign companies have continued to invest in packaged varieties and

selling increasingly more in modern grocery retailers and offering different types of

cheese.

Second-ranked Royal Friesland Foods NV increased its share to 10% in 2010. It

was popular within the unprocessed cheese category, where it held a 14% share in

2010. The company continued to be very active in terms of in- store promotions by

having in- store gondolas offering cheese such as Gouda and Edam. However, the



109 | Page

company faced tough competition not only from more traditional varieties, but also

from other players who continuously expand their ranges of packaged cheese.

Third-ranked Middle East Dairy & Foodstuff Co saw its value share increase from 9% to

10% within cheese as a whole in 2010. The company continued to be very active

offering more traditional varieties such as feta in brick- like cartons, offering

convenience to consumers.


One of the main reasons for the growth of white cheese, and its subsequent

effect on soft cheese as a category, is the fact that many consumers are making the

switch from unpackaged variants (not included in Euromonitor International’s

packaged foods definitions), to packaged varieties. Consumers are increasingly opting

for packaged varieties as they regard them as being of higher quality and appreciate

being able to see information about the products, such as the expiry date and the

nutritional content.

On the other hand, many Egyptians are becoming more sophisticated in their

tastes, moving from soft white cheese to other international varieties, which are

gaining in popularity. For example, Dutch cheeses, including Edam and Gouda, are now

widely available in modern grocery retailers such as Spinneys and Carrefour.



Table 52. Sales of Cheese by Category in Egypt thsd tons

Production Years








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The demand for unprocessed cheese is higher than the one of the processed

cheese in Egypt. Among the sales of the unprocessed cheese in Egypt, a dominant

place takes hard cheese.

Obviously, the crisis has had a little influence on the budget of the Egyptian

consumers who prefer to have cheese on their tables. This can also be proved by the

graph below.


PRICES

According to the latest (July 2012) data the average price of fresh local cheese

in Egypt per 0.15 kilo amounts up to USD 0.73.

IMPORTS

Dairy imports are significant with a requirement for Cheddar cheese, mainly for

processing. Import volumes are estimated at 20,000 tons annually. Bulk butter imports

stand at over 30,000 tons annually. The main source of supply is Fonterra, which has a

joint venture selling under the Arab Dairy Company brands. The imports of cheese and

curds in Egypt have increased by almost 22% in 2011 vis-à-vis 2010. The main

exporters are the Netherlands, the USA and New Zealand.

Table 53. Cheese and Curds Imports of Egypt

thsd USD

0.020.040.060.080.0

100.0120.0140.0160.0180.0

2006 2007 2008 2009 2010 2011

thsd

tons

Graph 16. Sales of Cheese in Egypt



111 | Page

Exporters Imported Value in 2008




World 96377 94245 87811 112102 Netherlands 17670 23390 17582 29152 USA 16161 2022 22589 23515 New Zealand 23998 23565 18451 14230 Ireland 6285 11501 4461 8615 Poland 5528 3969 5661 8263 Australia 6369 6644 4016 7073 Denmark 3873 5404 5429 6730 Saudi Arabia 3359 1463 1394 2711 Italy 1324 1405 1311 1527 Syrian Arab Republic 11 1415 1063 1511

Ukraine 0 0 226 1041 Iceland 0 0 0 1027 Turkey 381 441 533 985 UK 1407 2280 748 890 Germany 1543 2151 1152 874 Argentina 227 1501 316 784 France 624 1200 441 744 Switzerland 490 270 419 560 Morocco 619 20 194 468 Tunisia 0 0 0 354 Austria 137 64 530 321 Jordan 6 0 177 319


EXPORTS

The export volumes of cheese and curds in Egypt have been constantly

increasing since 2008: in 2011 vis-à-vis 2008, the volumes have almost doubled. The

major importers are Saudi Arabia, Iraq, Libya and Yemen.

Table 54. Cheese and Curds Exports of Egypt thsd USD

Importers Exported Value in 2008

Exported Value in

2009

Exported Value in

2010

Exported Value in

2011 World 295789 424842 471689 482555

Saudi Arabia 78315 119086 123319 135825 Iraq 59162 64893 77915 75310 Libya 39865 52390 68314 48066 Yemen 20016 29984 43709 47049



112 | Page

Jordan 14890 22048 22976 33803 Lebanon 16721 17998 19574 24378 Oman 15090 40169 26533 22292 UAE 8098 11081 15225 18443 Kuwait 10129 12384 16019 16762 Syrian Arab Republic 7130 9790 16178 16226

Haiti 2437 3268 5491 6502 Qatar 1561 3847 5309 5777 Eritrea 1863 3325 3906 4849 Morocco 2063 4097 6816 4337 Mauritius 1382 2230 2638 3343 Palestine 5518 6985 3544 2800 USA 661 1626 1781 2078 Viet Nam 348 4284 1761 1733 Bahrain 1199 1152 1112 1622 Israel 450 1572 3850 1619 Algeria 0 623 0 1598 Area Nes 0 311 412 1405


PROSPECTS

The cheese category is expected to see continued robust retail volume and

constant value growth over the forecast period. Traditionally high consumption of

cheese in the country, allied to the broader variety of products available and increased

product innovation, will all contribute to this performance.

Retail volume sales are expected to rise at a CAGR of 13% over the forecast

period. This growth is expected to come mainly as a result of consumers increasingly

switching more to packaged varieties as they are considered more hygienic and the

perception that they can be more expensive by some consumers goes away. This is

particularly in the case of soft cheese, which is more heavily by Egyptian consumers.

The development of the retail environment in Egypt is expected to have a

positive effect on cheese sales in the country as outlets in the growing

supermarkets/hypermarkets channel, which accounts for the largest share of sales,

have the space to accommodate larger fridges and therefore offer a greater variety of

cheese. The increased display of these products is likely to boost sales slightly and may



113 | Page

see an increase in the number of suppliers selling their products through modern

retailing.

The convenience offered by packaged varieties will continue to be one of the

key factors towards the success for the switch to packaged varieties. Manufacturers

have increasingly made huge efforts in recent years in order to get consumers to buy

packaged varieties, increasingly offering these options more readily available through

most grocery retailing outlets. Although at first it was grounded on the fact that it was

more hygienic, a topic that it is increasingly gathering more importance among

consumers, convenience is increasingly playing an important part from many

consumers living in urban centers. Moreover, packaging opens the gates for

manufacturers to increasingly brand their products in order to gain customer loyalty.

Over the forecast period, added value in cheese will increasingly become much more

of an important factor, and packaging and labeling of cheese will enable manufacturers

to launch products with added value, such as reduction of fat or the addition or

vitamins and minerals, which Egyptians will be paying more attention to.

The table below shows the forecast sales of cheese for Egypt in terms of

volume.

Table 55. Forecast Sales of Cheese by Category in Egypt thsd tons

Production Years







cheese by up to 58.5%. Processed cheese sales will increase by 12.6%, and

unprocessed cheese — by 68%.



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Unit prices in the cheese category are expected to increase by 2% in 2011, due

to the rising price of milk and other raw materials, which are mostly imported from

abroad.

REFERENCES


http://www.numbeo.com/food-prices/country_result.jsp?country=Egypt

www.trademap.org


Cheese & Cheese Product Labeling Guidelines

NAME OF PRODUCT:

1. “Standard of identity” name or

2. The common or usual name of the food; or

3. An appropriately descriptive term or fanciful name.

The standard of identity must be used if the cheese fits the standard.

Examples:

Standard of Identity Names:

Cheddar Cheese, Monterey Jack Cheese, Low-Moisture Part-Skim Mozzarella Cheese

Common or Usual Names

String Cheese Low-Moisture, Part-Skim Mozzarella Cheese

Farmers Cheese A Semisoft Part Skim Cheese

Farmers Pepper Cheese A Semisoft Part Skim Cheese with Jalapeños

Descriptive Names

Co-Jack A Blend of Colby and Monterey Jack Cheese






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Or Co-Jack A Semisoft Cheese

Spiced or flavored standardized cheeses should be labeled with the spice at the beginning or the end of the cheese name. The spice or flavor name must not be between the cheese variety and the word “cheese”.

Examples:

Caraway Colby Cheese, Salami Cheddar Cheese, Colby Cheese with Caraway, Cheddar Cheese with Salami.

(The word cheese must be included in the name of the product)

The name of the product must be in a type size that is 50 % the height of the largest

print on the label and generally parallel to the base of the package.

Pasteurized Process Cheese, Cheese Foods, and Cheese Spreads: All words in the

name need to be given equal prominence. You cannot make the word cheese or the

variety of the cheese used stand out more than the rest of the name. Any optional

ingredients that are required to be declared on the label should not be given greater

prominence than the name of the food.

NET QUANTITY OF CONTENTS

Net quantity of contents must be located on the front of the package (the principal

display panel). This includes random weight packages.

INGREDIENTS STATEMENT

Ingredients must be listed in descending order of predominance by weight (most

to least).

Table 56. Common or Usual Names for Typical Ingredients Used in Dairy Products

Ingredient Common or Usual Name

skim milk, concentrated skim milk, reconstituted skim, and nonfat dry milk "skim milk or "nonfat milk" milk

milk, concentrated milk, reconstituted milk, and dry whole milk "milk"


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bacteria culture "cultured ____" (the blank is filled in with the name of the milk used)

sweet cream buttermilk, concentrated sweet cream buttermilk, reconstituted sweet cream buttermilk and dried sweet cream buttermilk

"buttermilk"

whey, concentrated whey, reconstituted whey and dried whey "whey"

cream, reconstituted cream, dried cream and plastic cream and concentrated milk fat

"cream"

butter oil and anhydrous butterfat "butterfat" enzymes of animal, plant and microbial origin "enzyme"

cheese whey, concentrated cheese whey and dried cheese whey "whey"

Cheddar cheese, washed curd cheese, Colby cheese granular cheese and any mixture of two or more

"American cheese"

All sub-ingredients must be listed. Do not use extra words in the ingredient statement

e.g. diced (as in diced peppers), whole (as in whole milk), and fresh (as in fresh basil)

All added colors result in an artificially colored food. No added color can be declared as

“food” or “natural” color.

Cheese cannot be called “natural” if it has annatto color.

Food ingredients such as garlic, onion and celery cannot be included under the

collective term “spice.” They must be listed individually.

“Herb” and “herbs” cannot be used as collective terms in an ingredient statement. Use

the word “spice” or list all spices by name.


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Glossary of Commonly Used Cheese Making Terms Acid - a slightly sour flavor

Ammoniated - some overripe cheeses (especially soft ones like Camembert and Brie) develop this Ammonia smell (similar to bleach).

Aroma - the smell of a particular cheese, from lightly aromatic to ferociously overpowering. Though not always, strong smelling cheeses are usually strongly flavored.

Barnyardy - a term usually used to describe the taste and aroma of hay/straw, the best example of this is probably goat's cheese.

Bleu - French name for blue veined cheeses.

Bloomy or Flowery Rind - A light 'down' of mould, a result of the cheese being cultured with a light spray of penicillium candidate spores.

Brushed by Machine or Hand - the process of brushing the rind of naturally rinded cheeses for moisture and flavor while they are maturing.

Casein - the milk protein that solidifies once coagulation (setting) takes place.

Cheddaring - technique of stacking and turning curds at the bottom of the vat every 10 -15 minutes for 1½ hours.

Close Smooth - unblemished texture, free of holes or cracks.

Cooked - used to describe hard cheeses, the curd is cooked by being heated at a high temperature and then pressed to extract the maximum amount of whey.

Creamy - yielding texture and rich taste.

Curdling - coagulation of the milk by introduction of rennet.

Crumbly - condition of cheese that breaks away when cut - parmesan, feta & blues.

Dry Matter - what remains once moisture is removed - Parmesan is largely dry matter, Camembert is still 50% moisture.

Earthy - distinctive characteristic used to describe full flavored cheeses usually with musty, natural rinds.

Fat Content - indicated on the packaging. Ranging from 4% to 75% but on the average about 33%.

Fresh Cheese - unripened cheese e.g. Cottage, Ricotta Cream Cheese and Curd.

Gruyere - one of the best known Swiss cheeses. Also general name for large French cheeses, e.g.: Beaufort, Emmental, Comte.


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Hard - used to describe cooked cheeses with a low moisture content, e.g. Parmesan or Cheddar

Holes or Eyes - caused by cultured bacterial activity, these round holes give distinctive character to Gruyere and other Swiss types.

Lactic - milky aroma, and sometimes flavor of certain cheeses (tart and citrus tang).

Micro-Organisms - yeasts and fermenters naturally present in milk and milk curd.

Moulds - use of penicillium candidate results in exterior white mould, while penicillium glaucum or roqueforti create internal moulds used to create blue vein.

Mushroomy - used to describe the flavor and aroma of soft and semi-softs, e.g. Camembert and Brie.

Nutty - used to describe a character in hard cheese, usually Swiss and Dutch. (hazelnut flavour and aroma).

Open - cheese with openings or holes in it.

Paraffin - wax protective outer coating, e.g. Red wax on Edam.

Pasteurisation - heating of milk to sterilize and kill bacteria.

Paste - interior of a cheese.

Pronounced - descriptive term for dominant flavor or aroma in a cheese.

Piquant - sharp tasting.

Rennet - substance which contains a milk coagulating enzyme. Found in calves' stomachs or as a vegetable extract.

Rind Natural or Artificial - external surface of cheese designed to protect the paste, allow it to ripen and develop to the desired flavor.

Skimmed Milk - milk from which part or all cream is removed.

Starter - bacterial culture which produces lactic acid - tastes like yoghurt.

Supple - used to describe the texture of cheese, firm but not hard, pliable and resilient.

Tangy - sharp, distinctive, flavorsome.

Texture - largely dependent on moisture content. Harder cheeses have less moisture, softer cheeses more.

Washed Rind Cheeses - describes a process of regular rind washing of cheese while being ripened, with washes as varied as brine to brandy. This keeps the cheese moist and supple and contributes to the final flavor of the cheese. Some of the strongest smelling and flavored cheeses have washed rinds.

http://www.smellycheese.com.au/images/Madrigal_(French_Emmenthal)-00041.jpg












http://www.smellycheese.com.au/images/Fromage_de_Meaux_2-thumbnail1.jpg







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ANNEX Figure 1. Cheese pricing by categories, brands, company names, outlets and package sizes in

Russia for January and June, 2011-2012

Pricing Date Categories Brands Company

Name Outlets Pack Size

Price (RUB)7

Jan-11 Reduced Fat Cheese Fetaki Active

Käserei Champignon

Hofmeister KG Supermarket/hypermarket 500

g 146.0

Jan-11 Reduced Fat Cheese Frico Light Royal Friesland

Foods NV Supermarket/hypermarket 100 g 62.0

Jan-11 Reduced Fat Cheese Frico Light 12% Royal Friesland

Foods NV Supermarket/hypermarket 1 kg 519.0

Jan-11 Reduced Fat Cheese Oltermanni 29% Valio AO Supermarket/hypermarket 1 kg 259.0

Jan-11 Reduced Fat Cheese Oltermanni 29% Valio AO Supermarket/hypermarket 500

g 147.0

Jan-11 Reduced Fat Cheese Président Camembert Lactalis Vostok

ZAO Supermarket/hypermarket 250 g 270.0

Jan-11 Reduced Fat Cheese Président Legky Lactalis OOO Supermarket/hypermarket 140

g 47.0

Jan-11 Reduced Fat Cheese Viola Valio AO Internet retailing 200

g 40.0

Jan-11 Reduced Fat Cheese Viola Valio AO Supermarket/hypermarket 200

g 48.0

Jun-12 Spreadable Processed

Cheese Druzhba Karat ZAO Hypermarket 150

g 39.9


Cheese Druzhba Karat ZAO Supermarket 200

g 54.4


Cheese Druzhba RostAgroExport

ZAO Hypermarket 400 g 68.9


Cheese

Hochland Cream/Ham/Mushrooms

Hochland Russland OOO Internet retailing 200

g 70.9


Cheese

Hochland Slivochny/Ham/Mushrooms

Hochland Russland OOO Hypermarket 400

g 109.0


Cheese


Hochland Russland OOO Supermarket 140

g 41.1



Hochland Russland OOO Supermarket 200

g 59.9

7 $ 1 ≈ RUB 30.7


120 | Page

Cheese


Cheese


Hochland Russland OOO Supermarket 50 g 12.5


Cheese Karat Karat ZAO Supermarket 200

g 58.9


Cheese Karat Druzhba Karat ZAO Internet retailing 400

g 114.6


Cheese Karat Druzhba Karat ZAO Supermarket 400

g 99.9


Cheese Karat Yantar Karat ZAO Hypermarket 400

g 88.5


Cheese Karat Yantar Karat ZAO Supermarket 400

g 109.0


Cheese Korall RostAgroExport

ZAO Supermarket 200 g 64.9


Cheese Krasnaya Tsena X5 Retail Group Supermarket 400

g 68.8


Cheese President Slivochniy Lactalis Vostok



Cheese President Slivochny Lactalis Vostok



Cheese President Slivochny Lactalis Vostok

ZAO Supermarket 200 g 52.4


Cheese

Président Garlik/Ham/Maasdam/Cream

Lactalis Vostok ZAO Internet retailing 200

g 64.0


Cheese Pyat' Plusov X5 Retail Group Supermarket 180

g 37.9


Cheese Veseliy Molochnik Wimm Bill

Dann OAO Hypermarket 190 g 49.9


Cheese Veseliy Molochnik Wimm Bill

Dann OAO Supermarket 190 g 45.9


Cheese Vesely Molochnik

Wimm-Bill-Dann Produkty

Pitania OAO Internet retailing 400

g 142.5

Jun-12 Spreadable Processed Viola Valio OOO Hypermarket 200

g 58.2


121 | Page

Cheese


Cheese Viola Valio OOO Supermarket 200

g 67.5


Cheese Viola Valio OOO Supermarket 400

g 102.0


Cheese Viola

Valio St Petersburg

ZAO Hypermarket 200

g 58.9


Cheese Viola

Valio St Petersburg

ZAO Internet retailing 200

g 78.0


Cheese Viola

Valio St Petersburg

ZAO Supermarket 200

g 57.1


Cheese Viola 60% Valio OOO Hypermarket 100

g 31.3


Cheese Viola 60% Valio OOO Internet retailing 100

g 47.1


Cheese Viola 60% Valio OOO Supermarket 100

g 36.9


Cheese Viola 60% Valio OOO Supermarket 200

g 77.0


Cheese Yantar Karat ZAO Hypermarket 150

g 40.9


Cheese Yantar Karat ZAO Supermarket 100

g 13.5

Jun-12 Unspreadable

Processed Cheese

Gorod Syra Omsky Zavod Syrov Supermarket 1 kg 63.4

Jun-12 Unspreadable

Processed Cheese

Hochland Assorti Hochland Russland OOO Hypermarket 140

g 41.4

Jun-12 Unspreadable

Processed Cheese

Hochland Assorti Hochland Russland OOO Supermarket 140

g 62.9

Jun-12 Unspreadable

Processed Cheese

Hochland Cheesburger Hochland Russland OOO Hypermarket 150

g 41.4

Jun-12 Unspreadable

Processed Cheese

Hochland Cheesburger Hochland Russland OOO Internet retailing 150

g 64.9

Jun-12 Unspreadable Processed Hochland Cheesburger Hochland

Russland OOO Supermarket 150 g 65.9


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Cheese

Jun-12 Unspreadable

Processed Cheese

Hochland Cream/Ham/Mushrooms/Onion

Hochland Russland OOO Hypermarket 50 g 11.8

Jun-12 Unspreadable

Processed Cheese

Hochland Segment Hochland Russland OOO Hypermarket 140

g 39.9

Jun-12 Unspreadable

Processed Cheese

Hochland Segment Hochland Russland OOO Internet retailing 140

g 62.3

Jun-12 Unspreadable

Processed Cheese

Hochland Segment Hochland Russland OOO Supermarket 140

g 62.9

Jun-12 Unspreadable

Processed Cheese

Hochland v narezke vetchina Hochland Russland OOO Hypermarket 150

g 43.9

Jun-12 Unspreadable

Processed Cheese

Karat Druzhba Karat ZAO Hypermarket 150 g 37.2

Jun-12 Unspreadable

Processed Cheese

Karat Druzhba Karat ZAO Hypermarket 90 g 16.0

Jun-12 Unspreadable

Processed Cheese

Karat Druzhba Karat ZAO Internet retailing 90 g 24.7

Jun-12 Unspreadable

Processed Cheese

Karat Druzhba Karat ZAO Supermarket 90 g 23.0

Jun-12 Unspreadable

Processed Cheese

Karat Volna Karat ZAO Hypermarket 90 g 13.1

Jun-12 Unspreadable

Processed Cheese

Karat Volna Karat ZAO Supermarket 90 g 23.0

Jun-12 Unspreadable

Processed Cheese

Karat Yantar Karat ZAO Hypermarket 90 g 16.0

Jun-12 Unspreadable

Processed Cheese

Karat Yantar Karat ZAO Supermarket 150 g 51.9

Jun-12 Unspreadable

Processed Cheese

Kolbasny Karat ZAO Internet retailing 600 g 152.1

Jun-12 Unspreadable

Processed Cheese

Kolbasny Karat ZAO Supermarket 1 kg 209.0

Jun-12 Unspreadable

Processed Cheese

President Master Buterbroda Lactalis Vostok ZAO Supermarket 150

g 45.9

Jun-12 Unspreadable Processed President Slivochniy Lactalis Vostok



123 | Page

Cheese

Jun-12 Unspreadable

Processed Cheese

Président Legkiy Lactalis Vostok ZAO Hypermarket 140

g 41.4

Jun-12 Unspreadable

Processed Cheese

Président Legkiy Lactalis Vostok ZAO Internet retailing 140

g 57.6

Jun-12 Unspreadable

Processed Cheese

Président Legkiy Lactalis Vostok ZAO Supermarket 140

g 60.9

Jun-12 Unspreadable

Processed Cheese

Président Master Buterbroda Lactalis Vostok ZAO Internet retailing 150

g 57.6

Jun-12 Unspreadable

Processed Cheese

Président Master Buterbroda Lactalis Vostok ZAO Supermarket 150

g 49.2

Jun-12 Unspreadable

Processed Cheese

Président Segment Ham/Mushrooms/Cream/Assorti

Lactalis Vostok ZAO Hypermarket 140

g 41.4

Jun-12 Unspreadable

Processed Cheese


Lactalis Vostok ZAO Internet retailing 280

g 98.6

Jun-12 Unspreadable

Processed Cheese


Lactalis Vostok ZAO Supermarket 140

g 41.0

Jun-12 Unspreadable

Processed Cheese

Svalia Gurman Pieno Zvaigdes JSC Internet retailing 180

g 107.6

Jun-12 Unspreadable

Processed Cheese

Viola Valio OOO Hypermarket 150 g 44.8

Jun-12 Unspreadable

Processed Cheese

Viola Valio OOO Internet retailing 200 g 64.6

Jun-12 Unspreadable

Processed Cheese

Viola Valio OOO Supermarket 150 g 42.5

Jun-12 Unspreadable

Processed Cheese

Viola Valio St

Petersburg ZAO

Internet retailing 150 g 60.0

Jun-12 Unspreadable

Processed Cheese

Viola Segment Valio OOO Hypermarket 130 g 40.8

Jun-12 Unspreadable

Processed Cheese

Viola Segment Valio OOO Internet retailing 130 g 47.9

Jun-12 Packaged Hard Cheese Anchor Edam Fonterra Ltd Internet retailing 250

g 108.5

Jun-12 Packaged Hard Cheese Anchor Edam Fonterra Ltd Supermarket 250

g 119.0

Jun-12 Packaged Anchor Gauda Fonterra Ltd Internet retailing 250 108.7


124 | Page

Hard Cheese g

Jun-12 Packaged Hard Cheese Anchor Gauda Fonterra Ltd Supermarket 250

g 119.0

Jun-12 Packaged Hard Cheese Arla Domashny Arla Foods

Amba Hypermarket 400 g 159.0

Jun-12 Packaged Hard Cheese Arla Natura Maasdam Arla Foods

Artis Internet retailing 300 g 192.2

Jun-12 Packaged Hard Cheese Arla Natura Slivochniy Arla Foods

Artis Hypermarket 150 g 53.1

Jun-12 Packaged Hard Cheese Arla Natura Slivochniy Arla Foods

Artis Supermarket 150 g 99.9

Jun-12 Packaged Hard Cheese Dziugas Tradition Pic-Logistica

OOO Hypermarket 170 g 81.4

Jun-12 Packaged Hard Cheese Fol Epi Bongrain

Group Internet retailing 150 g 312.4

Jun-12 Packaged Hard Cheese Fol Epi Bongrain

Group Supermarket 150 g 329.0

Jun-12 Packaged Hard Cheese Fol Epi Light Bongrain

Group Internet retailing 150 g 297.2

Jun-12 Packaged Hard Cheese Frico Gauda Royal Friesland

Foods NV Internet retailing 150 g 98.7

Jun-12 Packaged Hard Cheese Frico Maasdam Campina OOO Internet retailing 150

g 62.9

Jun-12 Packaged Hard Cheese Frico Maasdam Campina OOO Supermarket 150

g 69.0

Jun-12 Packaged Hard Cheese Frico Maasdam Royal Friesland

Foods NV Internet retailing 150 g 99.9

Jun-12 Packaged Hard Cheese Granfor Edam



g 73.7

Jun-12 Packaged Hard Cheese Granfor Gauda Pir-Pak OOO Internet retailing 150

g 94.0

Jun-12 Packaged Hard Cheese Granfor Gauda



g 73.9

Jun-12 Packaged Hard Cheese Hermis Rossiyskiy TD Hermis ZAO Internet retailing 200

g 99.8

Jun-12 Packaged Hard Cheese Hermis Tilziter TD Hermis ZAO Internet retailing 200

g 102.5

Jun-12 Packaged Hard Cheese Kazhdiy Den Gollandskiy Auchan OOO Hypermarket 350

g 96.5

Jun-12 Packaged Hard Cheese Kazhdiy Den Poshekhonskiy Auchan OOO Hypermarket 150

g 44.4

Jun-12 Packaged Hard Cheese Laime Rossijsky Syr Valkishko Peine

AO Supermarket 150 g 70.4

Jun-12 Packaged Hard Cheese Lamber


Pitania OAO Hypermarket 230

g 88.9

Jun-12 Packaged Hard Cheese Lamber


Pitania OAO Supermarket 1 kg 337.6


125 | Page

Jun-12 Packaged Hard Cheese Lamber Tilziter


Pitania OAO Supermarket 150

g 90.9

Jun-12 Packaged Hard Cheese Margor Fromages Emmental Margot

Fromages SA Supermarket 200 g 267.0

Jun-12 Packaged Hard Cheese Oltermanni 17%

Valio St Petersburg

ZAO Supermarket 1 kg 398.9


Valio St Petersburg

ZAO Supermarket 150

g 84.4

Jun-12 Packaged Hard Cheese Oltermanni 29% Valio OOO Supermarket 150

g 87.5


Valio St Petersburg

ZAO Hypermarket 500

g 189.0


Valio St Petersburg

ZAO Supermarket 150

g 70.4


Valio St Petersburg


g 84.0


Valio St Petersburg


g 86.0


Valio St Petersburg


g 225.0

Jun-12 Packaged Hard Cheese Oltermanni bez lactozy Valio St

Petersburg Oy Supermarket 500 g 169.0

Jun-12 Packaged Hard Cheese President Emmental Lactalis Vostok


Jun-12 Packaged Hard Cheese Svalia Pieno

Zvaigzdes JSC Hypermarket 150 g 56.9


Zvaigzdes JSC Supermarket 200 g 109.0



Jun-12 Packaged Hard Cheese Svalia 45% Pieno

Zvaigzdes JSC Internet retailing 150 g 101.0

Jun-12 Packaged Hard Cheese Svalia Baltija v Narezke Pieno


Jun-12 Packaged Hard Cheese Svalia Baltija v Narezke Pieno


Jun-12 Packaged Hard Cheese Svalia Edam Pieno


Jun-12 Packaged Hard Cheese Svalia Gauda Pieno Zvaigdes

JSC Internet retailing 200 g 108.2

Jun-12 Packaged Hard Cheese Svalia Gouda Pieno


Jun-12 Packaged Svalia Oltermani Light Pieno Hypermarket 150 53.0


126 | Page

Hard Cheese Zvaigzdes JSC g

Jun-12 Packaged Hard Cheese Svalia Oltermani Light Pieno


Jun-12 Packaged Hard Cheese Valio Atleet Light Valio OOO Internet retailing 150

g 75.0

Jun-12 Packaged Hard Cheese Valio Atleet Light Valio OOO Supermarket 150

g 77.9

Jun-12 Packaged Hard Cheese Valio Emmental Valio AO Internet retailing 150

g 95.0

Jun-12 Packaged Hard Cheese Valio Emmental Valio AO Supermarket 150

g 68.9

Jun-12 Packaged Hard Cheese Valio Emmental Valio OOO Hypermarket 150

g 61.5

Jun-12 Packaged Hard Cheese Valio Emmental Valio OOO Internet retailing 150

g 80.0

Jun-12 Packaged Hard Cheese Valio Emmental Valio OOO Supermarket 150

g 75.9

Jun-12 Packaged Hard Cheese Valio Polar 5% Valio OOO Supermarket 300

g 204.0

Jun-12 Unpackaged Hard Cheese Arla Natura Light Arla Foods

Artis Internet retailing 150 g 129.6

Jun-12 Unpackaged Hard Cheese Arla Natura Slivochniy 38% Arla Foods

Artis Hypermarket 400 g 145.6

Jun-12 Unpackaged Hard Cheese Arla Natura Slivochniy 38% Arla Foods

Artis Supermarket 1 kg 489.0

Jun-12 Unpackaged Hard Cheese Fol Epi Bongrain

Group Supermarket 1 kg 1,359.0

Jun-12 Unpackaged Hard Cheese Gollandskiy

Ostankinsky Molkombinat

OAO Supermarket 1 kg 379.0

Jun-12 Unpackaged Hard Cheese Kaserei Innstolz Kaserei Roinen

GmbH Supermarket 1 kg 365.9

Jun-12 Unpackaged Hard Cheese Lamber


Pitania OAO Supermarket 1 kg 419.0

Jun-12 Unpackaged Hard Cheese Oltermanni 17% Valio OOO Hypermarket 250

g 82.4

Jun-12 Unpackaged Hard Cheese Oltermanni 29% Valio OOO Hypermarket 500

g 175.8

Jun-12 Unpackaged Hard Cheese Oltermanni 29% Valio OOO Supermarket 250

g 123.5

Jun-12 Unpackaged Hard Cheese President Emmental Lactalis Vostok

ZAO Hypermarket 1 kg 399.0

Jun-12 Unpackaged Hard Cheese President Maasdam Lactalis Vostok


Jun-12 Unpackaged Hard Cheese President Madrigal Lactalis

Vaostok ZAO Supermarket 1 kg 704.0

Jun-12 Unpackaged Hard Cheese President Madrigal Lactalis Vostok


Jun-12 Unpackaged Hard Cheese Président Edam Lactalis Vostok



127 | Page

Jun-12 Unpackaged Hard Cheese Rokiskio Tverdy Rokiskio Suris

AB Hypermarket 1 kg 403.4

Jun-12 Unpackaged Hard Cheese Rokiskio Tverdy Rokiskio Suris

AB Supermarket 1 kg 403.4

Jun-12 Unpackaged Hard Cheese Svalia Pieno Zvaigdes

JSC Supermarket 1 kg 411.0

Jun-12 Unpackaged Hard Cheese Svalia 45% Pieno

Žvaigždes AB Supermarket 350 g 135.7

Jun-12 Unpackaged Hard Cheese Svalia Gildija Gonda Pieno


Jun-12 Soft Cheese Adigeyskiy TK Sir Staroduskiy Supermarket 1 kg 349.0

Jun-12 Soft Cheese Almette Hochland GmbH Supermarket 150

g 64.4

Jun-12 Soft Cheese Apetina Classic Arla Foods amba Supermarket 200

g 125.4

Jun-12 Soft Cheese Apetina Feta ARla Foods amba Hypermarket 500

g 129.0

Jun-12 Soft Cheese Apetina Feta ARla Foods amba Internet retailing 500

g 174.0

Jun-12 Soft Cheese Apetina Light Arla Foods AB Supermarket 200 g 40.7

Jun-12 Soft Cheese Brie Hochland Russland OOO Internet retailing 130

g 100.9

Jun-12 Soft Cheese Castello Brie Arla Foods Artis Hypermarket 125

g 84.1

Jun-12 Soft Cheese Castello Brie Arla Foods Artis Supermarket 125

g 119.0

Jun-12 Soft Cheese Castello Brie Arla Foods amba Supermarket 125

g 105.4

Jun-12 Soft Cheese Castello Danish Blue Arla Foods Artis Internet retailing 100

g 90.8

Jun-12 Soft Cheese Castello Danish Blue Cheese Arla Foods AB Hypermarket 100 g 66.9

Jun-12 Soft Cheese Chechil Spagetti Tambovskiy OOO Supermarket 150

g 109.0

Jun-12 Soft Cheese Dobriana Rokfor Milkyland - Ukraina DP Internet retailing 100

g 227.4

Jun-12 Soft Cheese Dorblu Käserei

Champignon Hofmeister KG

Hypermarket 100 g 64.2



Internet retailing 100 g 65.9



Supermarket 100 g 62.7

Jun-12 Soft Cheese Fetaki Käserei



Jun-12 Soft Cheese Karat Delissir Karat ZAO Internet retailing 180 85.5


128 | Page

g

Jun-12 Soft Cheese Kaserei Brie Kaserei Hypermarket 125 g 99.9

Jun-12 Soft Cheese Kaserei Brie Kaserei Internet retailing 125 g 145.0

Jun-12 Soft Cheese Locatelli Mozzarella Lactalis Vostok ZAO Supermarket 150

g 219.0

Jun-12 Soft Cheese Parizhskaya Buryonka Fleshar SAS Hypermarket 500 g 75.4

Jun-12 Soft Cheese Parizhskaya Buryonka Fleshar SAS Supermarket 500 g 94.4

Jun-12 Soft Cheese President Brynza Lactalis Vostok ZAO Hypermarket 500

g 162.9

Jun-12 Soft Cheese President Camambert Lactalis Vostok ZAO Hypermarket 125

g 114.0

Jun-12 Soft Cheese President Camambert Lactalis Vostok ZAO Supermarket 120

g 82.4

Jun-12 Soft Cheese President Rondele Lactalis Vostok ZAO Supermarket 80 g 121.4

Jun-12 Soft Cheese Président Brie Lactalis Vostok ZAO Hypermarket 180

g 155.9

Jun-12 Soft Cheese Président Brie Lactalis Vostok ZAO Internet retailing 125

g 107.4

Jun-12 Soft Cheese Président Brie Lactalis Vostok ZAO Supermarket 200

g 249.0

Jun-12 Soft Cheese Président Camembert Lactalis Vostok ZAO Internet retailing 250

g 256.2

Jun-12 Soft Cheese Président Camembert Lactalis Vostok ZAO Supermarket 120

g 119.0

Jun-12 Soft Cheese Sirtaki OOO Nevskie Syry Internet retailing 500

g 138.0

Jun-12 Soft Cheese Sirtaki OOO Nevskie Syry Supermarket 200

g 52.4

Jun-12 Soft Cheese Umalat Adigeyskiy Sevsky Maslodel OAO Internet retailing 370

g 183.2

Jun-12 Soft Cheese Umalat Brynza Sevsky Maslodel OAO Internet retailing 250

g 148.4

Jun-12 Soft Cheese Umalat Mozarella Sevsky Maslodel OAO Internet retailing 125

g 118.7

Jun-12 Soft Cheese Violette Karat ZAO Supermarket 140 g 45.9

Jun-12 Spreadable

Unprocessed Cheese

Arla Natura Arla Foods Amba Hypermarket 150

g 47.9

Jun-12 Spreadable

Unprocessed Cheese

Arla Natura Arla Foods Amba Supermarket 150

g 47.9

Jun-12 Spreadable

Unprocessed Cheese

Castelli Mascarpone Nuova Castelli Internet retailing 250 g 238.1

Jun-12 Spreadable Castelli Ricotta Nuova Castelli Internet retailing 250 153.7


129 | Page

Unprocessed Cheese

g

Jun-12 Spreadable

Unprocessed Cheese

Manciano Ricotta Caseificio

Sociale Manciano


Jun-12 Spreadable

Unprocessed Cheese

Santa Lucia Mascarpone Galbani Group Hypermarket 250 g 123.0

Jun-12 Spreadable

Unprocessed Cheese

Santa Lucia Mascarpone Galbani Group Internet retailing 250 g 222.0

Jun-12 Spreadable

Unprocessed Cheese

Santa Lucia Mascarpone Galbani Group Supermarket 250 g 209.0


Figure 2. Cheese pricing by categories, brands, company names, outlets and package sizes in

Georgia for June, 2012

Pricing Date Categories Brands Company Name Outlets Pack

Size Price

(GEL)8

Jun-12 Spreadable Processed Cheese Buko Arla Foods Amba Hypermarket 200

g 3.9

Jun-12 Spreadable Processed Cheese

Gut & Gunstig Gut & Gunstig Hypermarket 250

g 5.5

Jun-12 Spreadable Processed Cheese Viola Valio Oy Hypermarket 400

g 7.9

Jun-12 Spreadable Processed Cheese Yantarnii RZPC OAO Hypermarket 100

g 1.6

Jun-12 Unspreadable Processed Cheese Hochland Hochland Reich,

Summer & Co Hypermarket 150 g 3.4

Jun-12 Unspreadable Processed Cheese President Lactalis, Groupe Hypermarket 200

g 7.4

Jun-12 Unspreadable Processed Cheese President Lactalis, Groupe Hypermarket 50 g 0.9

Jun-12 Unspreadable Processed Cheese Viola Valio Oy Hypermarket 100

g 3.6

Jun-12 Unspreadable Processed Cheese Viola Valio Oy Hypermarket 150

g 3.6

8 $ 1 ≈ GEL 1.66



130 | Page

Jun-12 Packaged Hard Cheese Bayernland Bayernland eG Hypermarket 500 g 15.5

Jun-12 Packaged Hard Cheese Guda Raty Ltd Hypermarket 500 g 10.0

Jun-12 Packaged Hard Cheese Oltermanni Valio Oy Hypermarket 100 g 2.5

Jun-12 Unpackaged Hard Cheese Bayerland Bayernland eG Hypermarket 1 kg 20.5

Jun-12 Unpackaged Hard Cheese Frico Royal

FrieslandCampina NV

Hypermarket 1 kg 27.4

Jun-12 Unpackaged Hard Cheese Guda Kazala Ltd Hypermarket 1 kg 17.0

Jun-12 Unpackaged Hard Cheese Lamber Wimm-Bill-Dann Produkty Pitania

OAO Hypermarket 1 kg 25.0

Jun-12 Unpackaged Hard Cheese President Maasdam Lactalis, Groupe Hypermarket 1 kg 23.0

Jun-12 Unpackaged Hard Cheese Valio Valio Oy Hypermarket 500 g 9.0

Jun-12 Soft Cheese Arla Arla Foods Amba Hypermarket 1 kg 14.3

Jun-12 Soft Cheese Brie Kaserei



Jun-12 Soft Cheese Eco Food Georgian-Eco Ltd Independent Small Grocers

400 g 5.5

Jun-12 Soft Cheese Imeruli Kazala Ltd Hypermarket 1 kg 7.5

Jun-12 Soft Cheese Mascarpone Edeka Zentrale AG & Co KG Hypermarket 250

g 6.1

Jun-12 Soft Cheese Suluguni Kiziki Ltd Hypermarket 1 kg 15.0

Jun-12 Spreadable Unprocessed Cheese Nadugi Mze Ltd Hypermarket 500

g 4.5




131 | Page


the UAE for June, 2012

Pricing Date Categories Brands Company Name Outlets Pack

Size Price

(AED)9


Almarai Spreadable

Cream Cheese Original

Almarai Co Ltd Hypermarket 432 g 11.8


Almarai Triangle Cheese Almarai Co Ltd Hypermarket 360 g 6.9


Happy Cow Cheese

Gebrüder Woerle GmbH Hypermarket 120 g 15.5


Kraft Cream Cheese Spread

Original Squeeze Kraft Foods Inc Hypermarket 440 g 15.0



Original Kraft Foods Inc Hypermarket 400 g 15.0



Original Kraft Foods Inc Hypermarket 500 g 14.4


Kraft Processed Cheddar Cheese Kraft Foods Inc Hypermarket 500 g 18.1


Philadelphia Cream Cheese

Kraft Foods Global Inc Hypermarket 200 g 8.1






Lite with Chives

Kraft Foods Global Inc Supermarket 200 g 26.5


Puck Cream Cheese Spread Cheddar Taste

Arla Foods Amba Hypermarket 2 x 240 g 10.0

9 $ 1 ≈ AED 3.67


132 | Page


Puck Processed Cheese Spread Arla Foods Amba Hypermarket 360 g 7.3

Jun-12 Unspreadable Processed Cheese

Kraft Mozzarella Cheese


Jun-12 Packaged Hard Cheese Frico Maasdam FrieslandCampina Cheese Llc Hypermarket 260 g 15.8

Jun-12 Packaged Hard Cheese Frico Original Gouda Mild

FrieslandCampina Cheese LLC Hypermarket 295 g 17.4

Jun-12 Packaged Hard Cheese Kraft Colby & Monterey Jack

Kraft Foods Global Hypermarket 226 g 15.5

Jun-12 Packaged Hard Cheese Kraft Monterey Jack


Jun-12 Packaged Hard Cheese Kraft Sharp Cheddar


Jun-12 Soft Cheese La Mozzarella Light Latbri SpA Supermarket 100 g 12.8

Jun-12 Soft Cheese Latbri Latte Di Bufala Latbri SpA Hypermarket 125 g 15.3

Jun-12 Soft Cheese Latbri Mozzarella Latbri SpA Hypermarket 125 g 8.4

Jun-12 Soft Cheese Latbri Mozzarella Latbri SpA Supermarket 125 g 11.0

Jun-12 Soft Cheese Latbri Ricotta Latbri SpA Hypermarket 250 g 12.0

Jun-12 Soft Cheese Latbri Ricotta Latbri SpA Supermarket 250 g 16.0

Jun-12 Soft Cheese President Camembert LBF SNC Hypermarket 250 g 24.3

Jun-12 Spreadable Unprocessed Cheese Boursin Groupe Bel Hypermarket 150 g 25.3

Jun-12 Spreadable Unprocessed Cheese

Soignon Chevre with Chive Eurial BP Hypermarket 150 g 14.8


133 | Page


Soignon Fromage de

Chevre Cendre Eurial BP Hypermarket 150 g 14.0


Soignon Le Chevre Eurial BP Hypermarket 150 g 19.3



Saudi Arabia for June, 2012

Pricing Date Categories Brands Company

Name Outlets Pack Size

Price (SAR)10


Cheese

Al Marai Cream Cheese

Spread Al Marai Co Hypermarket 500 g 15.0


Cheese

Al Marai Light Cream Cheese

Spread Al Marai Co Hypermarket 500 g 15.0


Cheese

Al Marai Portions Al Marai Co Hypermarket 12

units 7.0


Cheese Kiri

Saudi New Zealand Dairy Products Co

Hypermarket 12 units 9.5


Cheese Kiri Jar




Cheese Kraft Kraft Jacobs

Suchard Ltd Hypermarket 500 g 15.7


Cheese Kraft White Kraft Jacobs



Cheese

La Vache Qui Rit Gold Extra




Cheese

La Vache Qui Rit Portion




Cheese Luna

National Food Industries Co

Ltd Hypermarket 500 g 14.3

10 $ 1 ≈ SAR 3.75



134 | Page


Cheese Philadelphia Kraft Jacobs



Cheese

Philadelphia Light

Kraft Jacobs Suchard Ltd Hypermarket 300 g 14.5


Cheese

Président cream cheese

Besnier Foods Ltd Hypermarket 240 g 8.0


Cheese Puck

Arla Foods Saudi Arabia

(Danya Foods) Hypermarket 200 g 8.5


Cheese

Puck Cheddar spread




Cheese Puck light

Arla Foods Arabia (Danya

Foods) Hypermarket 200 g 8.8


Cheese Regal Picon




Cheese Saudia

Saudi Dairy & Foodstuff Co Ltd Sadafco


Jun-12 Unspreadable

Processed Cheese

Al Marai Al Marai Co Supermarket 500 g 14.5

Jun-12 Unspreadable

Processed Cheese

Almarai Low Fat Almarai Co Hypermarket 500 g 16.0

Jun-12 Unspreadable

Processed Cheese

Carrefour Carrefour SA Hypermarket 200 g 5.5

Jun-12 Unspreadable

Processed Cheese

Chesdale Saudi New

Zealand Dairy Products Co


Jun-12 Unspreadable

Processed Cheese

Kraft Kraft Jacobs Suchard Ltd Hypermarket 250 g 10.0

Jun-12 Unspreadable

Processed Cheese

La Vache Qui Rit



Jun-12 Unspreadable

Processed Cheese

Nadec

National Agricultural

Development Co (NADEC)


Jun-12 Unspreadable

Processed Cheese

Nadec light





135 | Page

Jun-12 Unspreadable

Processed Cheese

Pride United Food

Industries Corp Ltd


Jun-12 Unspreadable

Processed Cheese

Pride Light n Tasty

United Food Industries Corp


Jun-12 Unspreadable

Processed Cheese

Président Besnier Foods Ltd Hypermarket 200 g 6.8

Jun-12 Unspreadable

Processed Cheese

Président 0% fat

Besnier Foods Ltd Hypermarket 200 g 8.5

Jun-12 Unspreadable

Processed Cheese

Singles Kraft Jacobs Suchard Ltd Hypermarket 200 g 20.5

Jun-12 Unspreadable

Processed Cheese

Singles Light Kraft Jacobs Suchard Ltd Hypermarket 400 g 20.0

Jun-12 Packaged Hard Cheese

Al Marai Cheddar Al Marai Co Hypermarket 113 g 3.5

Jun-12 Packaged Hard Cheese Frico Gouda

Frico International

LLC Hypermarket 295 g 14.0


Frico Herbal Dutch

Frico International



Frico Red Hot Dutch

Frico International


Jun-12 Packaged Hard Cheese Kraft Cheddar Kraft Jacobs



Kraft Mozza Cheddar

Kraft Jacobs Suchard Ltd Hypermarket 113 g 106.0

Jun-12 Packaged Hard Cheese Pride Cheddar


Ltd Hypermarket 1 kg 29.0

Jun-12 Packaged Hard Cheese Président Besnier Foods



Saudia Cheddar

Saudi Dairy & Foodstuff Co Ltd Sadafco


Jun-12 Unpackaged Hard Cheese Anchor


Hypermarket 1 kg 39.0


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Jun-12 Unpackaged Hard Cheese Bridel Lactalis

International Hypermarket 1 kg 42.0

Jun-12 Unpackaged Hard Cheese Frico Edam

Frico International

LLC Hypermarket 1 kg 55.0

Jun-12 Unpackaged Hard Cheese Frico Gouda

Frico International

LLC Hypermarket 1 kg 39.0

Jun-12 Unpackaged Hard Cheese Halwani Halwani Bros

Co Hypermarket 1 kg 38.0

Jun-12 Unpackaged Hard Cheese Pride


Ltd Hypermarket 1 kg 29.0

Jun-12 Unpackaged Hard Cheese Sunbulah

Sunbulah Food & Fine Pastries

Mfg Co Ltd Hypermarket 1 kg 36.5

Jun-12 Unpackaged Hard Cheese Three Cows


(Danya Foods) Hypermarket 1 kg 21.5

Jun-12 Soft Cheese Al Marai Halloum Al Marai Co Hypermarket 225 g 13.0

Jun-12 Soft Cheese Al Marai

White/Feta Cheese

Al Marai Co Supermarket 200 g 5.5

Jun-12 Soft Cheese Almarai Feta low fat Almarai Co Hypermarket 200 g 5.0

Jun-12 Soft Cheese Nadec Mozzarella




Jun-12 Soft Cheese Pride United Food

Industries Corp Ltd


Jun-12 Soft Cheese Président Mozzarella

Besnier Foods Ltd Supermarket 450 g 20.0

Jun-12 Soft Cheese Puck Mozzarella



Jun-12 Soft Cheese Three Cows Arla Foods

Saudi Arabia (Danya Foods)


Jun-12 Soft Cheese Three Cows

Danish White cheese low fat

Arla foods Saudi Arabia



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Jun-12 Soft Cheese Three Cows Mozarella



Jun-12 Spreadable

Unprocessed Cheese

Boursin Unilever Group Hypermarket 96 g 30.0

Jun-12 Spreadable

Unprocessed Cheese

Chavroux Bongrain SA Hypermarket 150 g 33.5



Armenian Development Agency

2012

cheese industry overview - eu, russia, georgia, armenia and arab countries

Documents

intesco research group

kraft jacobs suchard

united arab emirates

independent small grocers

eu member states

x5 retail group

customer service models

spreadable processed cheeses