Cheesonomics – World Economy of the Cheese Industry

Cheese is the one thing that brings a smile to almost everyone’s face. This versatile delicacy has had many incarnations throughout the history of time. Travelling back to 5,500 BCE (around 7500 years ago), the earliest evidence of cheese-making was found in Poland. It is fascinating that we still celebrate such processed food item as a classic in our culture.

World Cheese Map by Tasty Dairy Specialities Ltd.

Crumbly, creamy, firm or soft- cheese comes in a variety of textures, colours and flavours. Even the process of preparing cheese is different across various cultures. If one wishes to taste all the cheeses from the place it originates, he has to travel around the world to do so! There are over 1500 varieties of cheese produced around the globe. This article is a walk-through of where cheese stands in today’s economy with a global point of view.

In 2016, 19.1 million tonnes of packaged cheese were sold across the globe, according to IMARC Group. By the end of 2018, the global cheese sales are expected to touch the US $131 billion. It’s not surprising to see this massive number since cheese is becoming a staple throughout the world.

France dominated the world of cheese for many centuries until it stepped down to the second largest, preceded by America as the single largest producer of cheese in the recent years. Germany and Russia follow France. European Union together produces almost half of the total global production of cheese. Best quality of cheese, of course, can be found in Germany.

Consumption of cheese varies to a great extent throughout the world. Denmark has the highest cheese consumption with an average of 28.1 kg per-person annually. On the other side, China consumes the lowest amount of cheese- an average of 0.1 kg per capita per year.

The consumption of cheese is spreading rapidly in Asian countries. For example, Japan’s per-capita cheese consumption was estimated to be as less as four grams a year until 1940. Now, it has increased to a great extent of 2.5 kg a year! Per capita consumption of cheese for Indians is merely 0.2 kg per annum as compared against the world average of 7 kg. This shows there is unexplored growth potential in Indian cheese market, ready to unravel in the course of time.

Germany is the biggest exporter of cheese sending out 14.5% of the total exports, valued at US$ 4.4 billion. 15 countries dominate around 84% of cheese exports- Germany, Netherlands, France, Italy and Denmark being the top five. India contributes a tiny percentage of cheese exports at 0.1% valued at the US $22.6 million.

The primary cheese markets in Europe and the USA are saturated, opening opportunities to newer markets to flourish in the production of cheese. And as we know, India is the largest dairy producer in the world. This means that India has a potential to become a significant exporter of cheese.

Indians are moving the cheese market. Cheese blends well with many of the dishes consumed in India like Sandwiches, Dosa, Pav Bhaji or even fusion dishes like Cheese Parathas. There has been a revolutionary uplift in the consumption of cheese in recent years. Indian cheese market has grown with 23% CAGR from 2011–12 to 2016–17 and currently weighed at the US $237 million. India consumes only about 40 types of cheeses among the pool of varieties available globally. The market is still fresh and novice for cheese and tremendous opportunities are here to explore.

Coming to recent developments in the cheese industry, diversification and tailoring of cheeses is soaring than ever before. People are now becoming more health conscious and opting for good quality food over low price food. In recent years, numerous low-fat, low-salt and diet-friendly cheese varieties have been produced. Fat is a major contributor to the taste texture of the cheese and innovating cheese with less fat while retaining taste is a big challenge we face today.

The other challenge faced by the cheese industry is to maintain an efficient demand-supply harmony. Increasing demand calls for faster production and distribution of the product. The fact is that most cheese requires ageing to acquire good taste, texture and quality. With such tremendous demand, the ageing process is accelerated and the final product (which is supposed to be healthy) loses its health benefits with the forced ripening. Afterall, every good thing demands its own pace to flourish!

Making cheese is an art- there are various competitions held globally, one of the famous one being the World Championship Cheese Contest. Cheese consumption is a cultural phenomenon. For many people, cheese is a regular part of their daily diet while for others, cheese is never on their plate. The difference is in the culture. With such global acceptance of this delicious ingredient, the sky is the limit to excel in cheese business.

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