Cheese consumption in the United States has increased dramatically over the past 30 years, jumping from 11.3 pounds per person in 1970 to 32 pounds per person in 2006. The state of Wisconsin is the largest producer of cheese at the national level (26% of total U.S. production) followed by California (23%), Idaho (8%) and New York (7%). In 2006, cheese sales were nearly $12.8 billion, representing about 5.5 percent of total sales of food in the United States. The largest selling categories were American and Italian types, which together accounted for about 80 percent of the total cheese sales.

Several factors could be behind the growth of the consumption of cheese: a more sophisticated consumer willing to explore new flavors and dishes, an upward trend in eating out, the increasing consumption of processed foods in which cheese is a main ingredient, the adoption of new cheese entrees in restaurants and the growth in Hispanic cheese production.

The European Union has been the major producer of cheese in the international market. Data show that since 2001 European countries have produced on average around 13.7 billion pounds of cheese every year. The United States and Japan are the two largest importers of cheese, importing 455 thousand pounds and 454 thousand pounds, respectively, every year.

Specialty cheese differentiates from commodity cheese because of the volume of production, the cheese design, the origin of cheese and the segment of the market to which the cheese is target. The specialty cheese market has enjoyed great success, with total retail sales reaching over 900 million pounds. On a per capita basis, specialty cheese has grown five times faster than total cheese consumption during the past ten years.

Wisconsin Production of Specialty Cheese
Wisconsin has tracked the production of 14 types of specialty cheese in its state since 1993. This is the only known data on specialty cheese production. The information provided in the report details the volume of production and the main characteristics of the cheeses. While some of the reported cheeses may appear to be commodity cheeses, they are recognized as specialty cheese due to the production methods or the specialty flavors. The cheeses included are Asiago, Aged Cheddar, Edam, Farmers, Feta, Gouda, Fontina, Havarti, Limburger, Monterey Jack, Parmesan, Provolone, Romano and Hispanic types.

Regulatory Requirements
The Food and Drug Administration (FDA) is responsible for all dairy processing facilities including all production operations (herd management, milking parlors, storage, processing and transportation). States can use the FDA regulations or establish their own programs. The enforcement and inspection of facilities are the responsibility of each state. Contact your Department of Agriculture for more information about your state.

Several programs are designed to facilitate the monitoring and control of food product quality and safety. Good Manufacturing Practices (GMPs), Standard Operating Procedures (SOPs) and Sanitization Standard Operating Procedures (SSOPs) are all programs that processors use to ensure the quality and safety of food products. Hazard Analysis and Critical Control Point (HACCP) is another program that helps establish safe food products. While not required for the dairy industry, it is used to identify potential food hazards (Hazard Analysis) so that key actions (Critical Control Points) can be taken to reduce or eliminate risk.

The Bioterrorism Preparedness and Response Act of 2002 requires the registration of all food processing plants with the FDA. For more information, contact the FDA at: www.fda.gov

The established guidelines for labeling your product include certain font size for specific information as well as placement of certain information on specific panels. Specific rules state where to place the statement of identity, net contents, nutritional panel, ingredient statement and manufacturer statement as well as the type and size of the information. Always check with a label expert when laying out your labels.

The facility and equipment needed for a specialty cheese plant varies depending on the type of cheese produced, the volume of cheese and the storing requirements. A new facility will require capital investments in land acquisition, facility construction, equipment purchases and installation cost.

Trends in Gourmet Foods
Bold flavors, handmade artisan products and foods from around the world all dictate new trends in the food industry. American consumers spent about $38.5 billion on specialty food products in 2006. Specialty cheeses are in the top five categories (others include condiments, coffee and cocoa, snacks and diverse beverages) of specialty foods. The areas of importance in gourmet food products are: flavor, quality, food safety and convenience.

Educating consumers about the finer points of cheese tasting, much like the wine industry did, should be an important part of cheese marketing. Consumers want to know where the cheese is made, a description of the flavor and texture, pairing suggestions, serving suggestions, tips for cutting and storing, and new recipes incorporating the cheese.

Survey Results
A telephone survey of 160 specialty cheese producers was conducted in the last quarter of 2007. The purpose of the survey was to obtain information from producers about their business structure, their production operations and their strategic plans for the future. The survey results show that most of the interviewed specialty cheese companies are family-owned or -operated businesses, and in most cases, the owner is the principal cheesemaker.

Most of the respondents agreed that in the specialty cheese market there is not a “price leader” producer, which means that manufacturers charge their own price that reflects the high quality of their product.

Due to the market characteristics and in accordance with the increase in cheese consumption, most of the interviewed specialty cheese manufacturers are not concerned about foreign competition, instead most of them are planning to grow their business in the short run by increasing their production, hiring additional production staff and investing in new equipment.

Regarding the distribution channels of specialty cheese, the respondents considered direct sales to retailers, wholesalers or the food industry to be very important for their companies. On the other hand, most of the respondents reported that the services of a broker to commercialize their cheese were not at all important in any of the mentioned channels.

For further information on the report or to order printed versions, please contact:
Mark Hutchison
Food Processing Center
University of Nebraska-Lincoln
Telephone: 402-472-0381
Fax: 402-472-1693
E-mail: mhutchison1@unl.edu
http://fpc.unl.edu

A CD with an electronic version of the report, a printed copy of the report and a free copy of the previous report may be purchased from the Food Processing Center for $45.

An electronic-only copy may be purchased for $25.