Specialty Cheese Can Benefit from Export Markets

Cheese Market News, May 9, 2008

CMN, 5-9-08 -- MADISON, Wis. — Artisan and specialty cheesmakers need not miss out on the current favorable conditions on the export market, but experts say developing overseas clients takes careful planning and a great deal of patience.

The Wisconsin Specialty Cheese Institute brought in two guest speakers to discuss export opportunities for U.S. specialty cheesemakers during the organization’s May 2 meeting.

Angélique Hollister, manager of cheese and manufactured products, U.S. Dairy Export Council (USDEC), notes it is only recently that the international markets have opened up for U.S. dairy products, whether they be specialty or commodity. She notes that when she joined USDEC in 2000, there were a number of factors working against U.S. producers: a strong U.S. dollar, export subsidies in the European Union and plenty of supply coming out of Australia and New Zealand.

“It was really hard to get buyers from overseas to be interested in our product,” Hollister says.

However, just eight years later, these factors have nearly reversed with a weak dollar, subsidy reform in the EU and tightened supplies in Australia and New Zealand due to prolonged drought conditions. As a result, U.S. cheese exports grew from 48,000 metric tons in 2000 to 99,400 metric tons in 2007. According to USDEC, 2.3 percent of the U.S. cheese produced last year was exported.

The United States’ largest export market is Mexico, accounting for 34 percent of cheese exports. Hollister notes that U.S. producers enjoy duty-free access to the Mexican market through the North American Free Trade Agreement (NAFTA), so it is the natural first choice for many producers looking to export for the first time. Cheese exports to Mexico totaled 33,600 metric tons in 2007. Japan and Canada accounted for 10 percent (10,100 metric tons) and 9 percent (8,800 metric tons) of U.S. cheese exports in 2007, respectively.

Hollister notes that U.S. exports were up 40 percent from 2006 to 2007, and the Middle East showed the largest percentage of growth, increasing by 77 percent year over year.

“People are very open to our products in this market,” Hollister says, noting that U.S. products and popular culture have high exposure in the Middle East through television and other media sources. U.S. cheese exports to the Middle East totaled 8,100 metric tons in 2007.

Exports to Southeast Asia were up nearly 50 percent from 2006 to 2007 and totaled 3,700 metric tons in 2007.

The demand and potential is there, Hollister says, adding that exporting specialty cheese can be very challenging.

“But if you’re committed, the reward is great,” she says.

Christopher Gentine, The Artisan Cheese Exchange, Sheboygan, Wis., says one challenge facing exporters of specialty cheese products is the need to receive a premium price to make the transaction profitable. He says patience and education are key to overcoming this hurdle.

“There is less price resistance in specialty cheese when importers can appreciate the quality,” Gentine says of foreign buyers.

Gentine founded The Artisan Cheese Exchange to work with specialty cheesemakers as a partner in the development of export relationships and business. He notes developing overseas relationships can be very time consuming. For example, a product his company began representing in October 2006 had its first international order this spring.

“But once you develop a relationships, they are very loyal,” Gentine says. “And you really only need one product to catch on to have a pretty nice piece of business.”

Hollister says specialty cheese companies interested in exporting cheese must consider whether or not the product meets appropriate labeling guidelines and whether the target market has restrictions on product ingredients. Gentine also suggests spending time doing research on target markets to figure out where a company’s products make the most sense.

He adds that entering well-respected contests such as the World Championship Cheese Contest hosted by the Wisconsin Cheese Makers Association or the American Cheese Society’s Annual Cheese Contest can garner instant worldwide exposure. In addition, USDEC provides financial support to U.S. entries in the World Cheese Awards held in London to promote U.S. cheese overseas and to prove that U.S. cheesemakers stand toe-to-toe with the best in the world.

However, Hollister says not all artisan cheeses are suitable for export due to shelf-life issues as well as being incongruous with local flavor trends. Most importantly, she says developing foreign relationships takes a great deal of patience.

“Building relationships with overseas customers takes time,” Hollister says. “Potential customers will ask a lot of questions.”

Gentine notes transit time can be considerable when dealing with exports — shipping time from the West Coast to Japan is 25 days, which takes nearly a month off the shelf-life of products.

Another challenge facing specialty cheesemakers is consumer perception. Hollister says consumers in foreign countries often identify the United States with process cheese as they are most familiar with U.S. products through interaction at international quick serve restaurants such as McDonald’s or Burger King.

“They are completely unaware of what you guys are making,” Hollister told the room of artisan and specialty cheesmakers.

As a result, USDEC began a specialty cheese program in 2006 with the objective of raising the image of U.S. cheese worldwide. The program’s flagship markets are the United Kingdom (UK) and Japan.

Hollister says trade missions have generated interest in the UK, but that negotiations have been difficult. However, the program has not been without its success as Rogue Creamery, Central Point, Ore., recently announced it would be shipping its Rogue River Blue cheese to countries in the European Union.

Hollister says USDEC chose to focus on Japan because of its position as a trend setter for other Southeast Asian countries. She says the program has made considerable progress, noting that more than a dozen U.S. artisan cheeses are now regularly sold at upscale supermarkets, cheese shops, restaurants and department stores.

Gentine also has spent time building relationships in Japan and says that if export business generally takes a long time to build, “in Japan it takes a very long time.”

“But they really appreciate quality,” he says.