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TRANSCRIPT
The Global Cheese Market Report 2000-‐2015
PM FOOD & DAIRY CONSULTING JANUARY 2012
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The World Cheese Market Report
PM FOOD & DAIRY CONSULTING is publishing a new report: The World Cheese Market Report 2010-‐2015 in January 2011. It is a follow up on the report from 2009: The Global Cheese Markets –Opportunities and Challenges in a volatile Market, but the new report contains a lot of new features and valuable information (see content of the report). The report gives the overall view of the development on the world market for cheese in the 2000s in all regions of the world. The future prospects for cheese in the next decade is analyzed with focus on consumer trends, impact of the economic crisis, developments in the emerging dairy markets, and prognosis for the overall prospects until 2020.
The report also provides in debt analysis of more than 60 countries from all region of the world. This provides all the necessary information for evaluating the different cheese markets in the world and the future potential for expansion.
Is your company seeking new opportunities in the global cheese market this report is a must!
Background
Several dairy experts have in advocated that the future for the dairy sector will be to return to the basic commodities butter and milk powder instead of value added products like cheese.
PM FOOD & DAIRY CONSULTING examine this statement and evaluates the future prospects for the world cheese market in spite of short term changes.
The main thesis of the report is that cheese has a dynamic prospect in medium/long term. However, the cheese segment has to adapt to the new situation saturated markets in OECD and no tradition for consuming cheese in the emerging dairy markets.
The development in the last five years in the global dairy and cheese market have shown what volatility means. The dairy commodity prices rocketed from 2005 to 2008 including cheese
• Price: €3,500 / $4,700 • 400 pages of valuable information • Order by replying to this mail and receive an invoice • Your company will receive the report electronically when the payment is registered • You can subscribe on [email protected] • Find more information about PM FOOD & DAIRY CONSULTING www.pmfood.dk
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because of the rapid economic growth in most regions of the world. The growth was created by the demand for dairy products that for the first time in three decades surpassed the supply. The general fiscal crisis from mid-‐ 2008 altered the situation and the prices declined and the global dairy sector was hit severely with declining prices and world and regional level. At the same time the production cost for both milk production and dairy processing remained at a high level. This lead to a cost squeeze and the situation eased late 2010 when the dairy prices recovered.
During the financial crisis the demand for whole milk powder continued to grow due to the milk balance problems in especially China and Brazil. Several of the major exporting dairy countries with New Zealand in the lead changed strategy and turned away from cheese towards the basis dairy commodities – butter and milk powder. Opposite Russia was the driving force for expanding the cheese export because the domestic milk production still is unable to meet the demand for all dairy products especially cheese.
The turbulence the last five years show how fast the world dairy market can change and how the demand for dairy products shift.
Several dairy experts have in advocated that the future for the dairy sector will be to return to the basic commodities butter and milk powder instead of value added products like cheese. PM FOOD & DAIRY CONSULTING contests this analysis and the report will show the dynamics of the world cheese market in the medium – long term.
The aim of the report is to analyze the future prospects for the world cheese market will develop in the next decade and answer the following questions:
• What has been the impact on the cheese sector of the financial crisis – will the dynamic growth from the 2000s return?
• Can cheese be a future product in the emerging dairy markets where the expansion until now has focused on fresh dairy products and milk powder?
• Can the cheese market regain the value growth in the matured OECD dairy markets where private label and discount cheese has gained market shares in recent years?
• What are the future consumer trends for cheese in different parts of the world? • What has to be focus of the cheese processing companies in relation to innovation
and marketing to develop the cheese market in the emerging dairy markets? • The report will identify the major cheese processing dairy company’s in the future
on national, regional and global scale. • How will the trade patterns for cheese develop in the next decade and will new
countries and companies enter the world market?
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Content of the report: The World Cheese Market 2010-‐2020
i. Introduction ii. Methodology
Part I: World cheese market 2010-‐2020
1. World cheese production 1.1. Production 2000-‐2010 1.2. Major cheese producing countries 1.3. Production of the major cheese types 1.4. Future prospects 2010-‐2020
2. World trade patterns 2.1. World trade developments 2000-‐2010 2.2. Major exporting and importing countries 2.3. New WTO –agreement? 2.4. Future trade developments
3. Cheese consumption 3.1. Consumption 2000-‐2010 3.2. Consumption per capita 3.3. Consumption prognosis 2010-‐2020
4. Cheese price 4.1. Development in 2000s 4.2. Value of the world cheese market 4.3. Future price developments
5. Major cheese processing companies 5.1. Top-‐20 cheese processing companies 5.2. Global players in the next decade 5.3. How to penetrate the emerging dairy markets
6. Future trends 6.1. Cheese as ingredient 6.2. Analogue cheese 6.3. Food service and food industry 6.4. New cheese types for the future
7. External factors affecting the cheese market 7.1. Policy changes 7.2. Economic development 7.3. SWOT analysis of the world cheese market
8. Conclusions 8.1. Prognosis for 2020
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8.2. Will cheese be a success product for the 2010s?
Part II: Cheese country analysis
The report analysis more than 60 countries in all regions of the world and the respective cheese market analysis have the following content:
1. General country information 2. The dairy sector in general 3. Cheese production
3.1. Traditional country cheese 3.2. Production 2000-‐2015
4. Export and import 5. Major cheese processing companies 6. Consumption 7. Cheese market 8. Future prospects
The description contains statistics from 2000-‐2010 and the country prognosis reach until 2015.
The countries included in the report are:
EU 27
Austria, Belgium, Denmark, Sweden, Finland, France, Germany, Netherlands, UK, Ireland, Portugal, Spain, Italy, Greece, Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary, Slovenia, Bulgaria, Romania
Other European countries:
Norway, Switzerland, Croatia, Bosnia-‐Herzegovina
CIS:
Russia, Ukraine, Belarus
Middle East and Africa:
Turkey, Israel, Egypt, Saudi Arabia, Morocco, Kenya, South Africa
North America:
USA, Canada, Mexico
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South America:
Brazil, Argentina, Columbia, Chile, Venezuela, Uruguay, Paraguay, Peru, Bolivia, Ecuador
Asia:
China, India, Indonesia, Japan, Malaysia, Philippines, South Korea, Taiwan, Vietnam.
Oceania:
Australia, New Zealand
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EXTRACT FROM THE REPORT Croatia
1. General information
The lands that today comprise Croatia were part of the Austro-‐Hungarian Empire until the close of World War I. In 1918, the Croats, Serbs, and Slovenes formed a kingdom known after 1929 as Yugoslavia. Following World War II, Yugoslavia became a federal independent Communist state under the strong hand of Marshal TITO.
Although Croatia declared its independence from Yugoslavia in 1991, it took four years of sporadic, but often bitter, fighting before occupying Serb armies were mostly cleared from Croatian lands.
Under UN supervision, the last Serb-‐held enclave in eastern Slavonia was returned to Croatia in 1998.
In April 2009, Croatia joined NATO; it is a candidate for eventual EU accession in 2013
Table 1: Key indicators for Croatia
Subject Information World ranking Area 56,394 km2 127 Population 4.4 million 124 Population growth rate -‐0.07% 224 Capitol Zagreb Arable land 26% Religion 88% Roman Catholic Urbanization 58% GDP $78 billion 79 GDP growth rate -‐1.4%(2010)
2.0%(2011)
GDP per capita $17,400 67 Source: Economist, CIA, OECD, PM FOOD
Once one of the wealthiest of the Yugoslav republics, Croatia's economy suffered badly during the 1991-‐95 war as output collapsed and the country missed the early waves of investment in Central and Eastern Europe that followed the fall of the Berlin Wall.
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Between 2000 and 2007, however, Croatia's economic fortunes began to improve slowly, with moderate but steady GDP growth between 4% and 6% led by a rebound in tourism and credit-‐driven consumer spending. Inflation over the same period has remained tame and the currency, the kuna, stable. Nevertheless, difficult problems still remain, including a stubbornly high unemployment rate, a growing trade deficit and uneven regional development.
The state retains a large role in the economy, as privatization efforts often meet stiff public and political resistance. While macroeconomic stabilization has largely been achieved, structural reforms lag because of deep resistance on the part of the public and lack of strong support from politicians. The EU accession process should accelerate fiscal and structural reform.
While long term growth prospects for the economy remain strong, Croatia will face significant pressure as a result of the global financial crisis. Croatia's high foreign debt, anemic export sector, strained state budget, and over-‐reliance on tourism revenue will result in higher risk to economic stability over the medium term.
2. The dairy sector in general
The dairy industry is one of the most important parts of Croatian agriculture with 9% of the total agricultural production value. There are more than 20,000 dairy farms in Croatia and they are very small, however the number of dairy farmers has been halved from 2000 to 2007. In the same period the yield per cow has increased from 2,300kg to 3,555kg.
The overall milk production in Croatia declined in the last decade but the deliveries to dairies have increased significantly with 75% illustrating the improvements in the dairy sector.
Table 2: Key dairy figures 2000-‐2011
Milk production 2000 2005 2009 2010 2011
Dairy cattle (1,000) 287 239 212 -‐ -‐ Milk production (1,000 MT)
607 1,073 818 800 850
Deliveries to dairies (1,000 MT)
380 605 675 670 710
Production of dairy products (1,000 MT)
Liquid milk 296 325 322 310 300 Fermented products 55 83 104 110 120 Cream -‐ -‐ 27 25 26 Butter 2 4 6 6 8 SMP 3 3 3 4 5 WMP 1 1 1 -‐ -‐ WP -‐ -‐ 5 5 7
Source: IDF, ZMP, PM FOOD & DAIRY CONSULTING
The production of dairy products has enlarged due to the growing supply for processing mainly for liquid milk and fermented products. The production of liquid milk accounts for 65% of the milk, fermented products 11%, cheese 6% and other dairy products 18%.
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3. Cheese production
Cheese still plays a minor role in the Croatian dairy industry but the production has improved along with the growing supply of milk to the dairies. From 2000 to 2010 the production increased by nearly 50%. However, the GFC has affected the Croatian economy severely and also the domestic demand for cheese.
Table 3: Cheese production in Croatia 2000-‐2015
1,000 MT 2000 2005 2009 2010 2011 2015 Total 19 26 30 28 29 32
Source: ZMP, IDF, CNIEL, PM FOOD & DAIRY CONSULTING
The future prospects are uncertain for several reasons. First, how soon will the economy recover and improve the purchasing power of the Croatian consumers? Secondly, how much will the foreign dairy companies invest in cheese production in Croatia or will they rely on increasing import from other countries where they produce cheese. Finally, what will the impact be if Croatia becomes a member of EU in 2013 and there will be free access to the Croatian dairy market?
The prognosis is that the cheese production will increase modestly with 4,000 MT from 2010 to 2015.
4. Export and import Croatia is a net-‐importer of dairy products and this is also the case for cheese. The export is minimal and it is expected to remain stable also until 2015. The export is mainly to the other countries in the former Yugoslavia and the majority of the import comes from Germany.
Table 4 Cheese export and import 2005-‐2015
1,000 MT 2005 2009 2010 2011 2015 Export 2 2 1 2 3 Import 9 11 10 12 20 Net-‐import 7 9 9 10 17
Source: IDF, ZMP, PM FOOD & DAIRY CONSULTING
The import is increasing and a possible membership of EU will increase the import and the competition for the domestic dairy industry.
5. Major cheese producing companies The milk processing in Croatia is handled by 37 dairy companies. The 5 largest dairies process 80% of the delivered. Most other dairies are craft-‐type and they process up to 10,000 kg milk per day. The existing capacities satisfy the domestic needs for milk processing.
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Table 5 Key dairy companies in Croatia
Source: CLC ( Croatia Livestock Centre)
The two largest dairy companies Dukat and Vindija processes more than 2/3 of the milk. They have modern production technology and comply with the hygiene and quality standards from EU.
The Croatian dairy industry has penetrated by the EU dairy companies and they control the majority of the dairy production and this also includes the cheese production. Several EU based companies have in invested in Croatia before a possible EU membership in 2013 to be able to take advantage of the opportunities that follows from opening the Croatian dairy market.
The major cheese producing companies are:
Dukat
The company was established in 1912 and it has reached a dominating position by continuous mergers and acquisitions through the years. The company has national coverage with dairy products and produces the full range of dairy products – fresh dairy products, butter, and cheese.
In 2007, Lactalis acquired the company as part of their Balkan strategy that also included production in Bosnia-‐Herzegovina, Macedonia, and Romania. The focus is now to develop the Dukat brand into a regional brand. At the moment Dukat has five processing plants in Croatia and in 2009 the company took over KIM dairy company (no. 5 in Croatia) with a milk intake of 22,000 MT.
Dukat produces approximately 15,000 MT of cheese annually mainly hard and semi-‐hard cheese.
Vindija
Vindija is the second largest dairy in Croatia that process 160,000 MT milk annually. The company is a food company that operates in poultry, meat and bakery besides dairy. In the dairy business Vindija has been focusing on the domestic market. The company has two processing plants in Varazdin County. The annual cheese production amounts to 7,000 MT.
The other cheese processing dairy companies are small craft-‐type operations with local focus. Meggle from Germany has also established dairy production in Croatia but the focus is on fresh dairy products, butter and ingredients.
The possible EU membership will be a huge challenge for the Croatian dairy industry and rapid concentration can be foreseen also in the cheese production.
Company Milk intake (1,000 MT) % of total milk Dukat 275 42 Vindija 160 25 Meggle Hvatska 45 7 Ledo 30 4 Kim Mljekare 22 3 Others 124 19 Total 656 100
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6. Consumption In the first part of 2000s, the consumption increased due to the economic growth. From 2008 until now, the consumption of cheese has suffered from the impact of the GFC and the level has declined with 25%.
Table 6: Cheese consumption 2005-‐2015
2005 2007 2009 2010 2015 Total (1,000 MT) 33 37 31 28 38 Per capita (kg) 7.0 8.2 6.9 6.6 8.3
Source: IDF, PM FOOD & DAIRY CONSULTING
The consumption is expected regain the dynamic path in the future along with the expected recovery of the economy. The consumption is expected to reach the 2007-‐level in 2015.
7.Cheese market The Croatian consumers are very loyal to the domestic standard types of cheese in spite of the availability of imported cheese and premium products. The sales of cheese have followed the turbulence of the economy both in volume and value terms.
The major outlet for cheese in Croatia is supermarkets/hypermarkets, accounting for 60% retail value sales in 2010. The share of convenience stores and independent small grocers is declining, since they cannot compete with the prices offered by the supermarkets/hypermarkets.
Table 7: Cheese company shares 2005-‐2009 (%retail value)
Company 2005 2007 2009 Brands Dukat 36.1 36.5 40.0 Sirela, Dukatela, Dukat Vindija 16.6 18.0 16.4 Z Bregov, Varazdinec, Vindija,
Gebrüder Woerle 7.4 7.7 7.9 Happy Cow Kraft Foods 5.5 5.4 5.7 Philadelphia Meggle Hrvatska 2.5 2.9 3.3 Meggle Zott 3.5 3.4 3.0 Zottarella, Zott Toasty Bayernland 2.8 2.5 2.8 Gouda, Edamer, Kerniger, Chester Cheddar, BL
Mozzarella
Unilever 2.9 2.9 2.5 Rama Créme Bonjour Belje 2.3 2.3 2.1 Buco Konzum 0.6 1.1 1.4 K Plus Zanetti 0.3 0.4 0.3 Mascarpone Italioano, Ricotta
Other private label 1,4 2.5 3.2 Others 18.1 14.4 14.4 Total 100.0 100.0 100.0
Source: Euromonitor International, PM FOOD & DAIRY CONSULTING
Dukat (Lactalis) is the undisputed market leader with 40% ahead of Vindija with 16% market value share. Foreign dairy companies like Kraft Foods, Meggle, Zott, Gebrüder Woerle, Bayernland, Unilever and Zanetti also play a role on the Croatian dairy market.
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Private label has gained market shares during the GFC and this trend is expected to continue in the future.
8. Future prospects The Croatian cheese production and market is relatively small but in spite of this it has attracted a lot of interest from foreign dairy companies with Lactalis in the lead. The coming EU membership is the major reason, and the possibilities to get further access to the dairy market. This is also expected to have a positive effect on the cheese market and the future prospects from 2010 to 2015 are:
• The production will increase by 4,000 MT but this is only to regain the level before the GFC.
• The export remains stable at a very level but the import will increase by 8,000 MT especially due to the coming EU membership.
• The consumption will soar in line with the economic recovery with 10,000 MT.
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