Cheese Industry Profile

Revised November, 2018.

Overview

All traditional cheeses are made from some type of milk, whether it is from a cow, goat or sheep. In the United States, more than 300 varieties of cheese are produced, largely from cow's milk. In fact, the demand for cheese has been one of the most significant factors influencing the dairy industry.

Production

Total U.S. cheese production in 2017 was 12.7 billion pounds, up 1.5 percent from 2016. Wisconsin led the nation in cheese production in 2017 with 3.3 billion pounds. Likewise, California continued to rank second, producing 2.5 billion pounds of cheese. Other top cheese-producing states include Idaho, New York and New Mexico (Statista).

In terms of international cheese production, only the European Union-27 continues to produce more cheese than the United States (FAS).

Demand

U.S. per person cheese consumption was 39 pounds in 2017, a slight increase from the previous year. Cheddar cheese and mozzarella cheese remain the most popular varieties of cheese (USDA).

Overall cheese consumption continues to increase due to its versatility and adaptability to recipes, more available varieties and more women employed outside of the home. The consumer shift from at-home food preparation to purchases of partially or fully prepared foods has also benefited cheese sales.

Another contributing factor to cheese popularity in the United States has been mainstream acceptance of ethnic cooking, such as Italian and Mexican, which use substantially more cheese. The popularity of Latino foods and Hispanic cheeses is at an all-time high.

Additionally, America’s dairy producers are working with foodservice chains such as Wendy’s, Pizza Hut, Taco Bell and Applebee’s, further increasing demand for cheese. According to Dairy Management Inc., demand for traditional pizza has shifted to other segments such as submarine sandwich shops and quick-casual chains, resulting in increased demand for new types of cheese.

Value-added Products

Increased cheese consumption can be attributed, in part, to growth in specialty, artisanal and farmstead cheeses.

Specialty Cheese
Specialty cheese is a value-added product of high quality and limited quantity. Some of the unique qualities of this cheese include having an exotic origin, distinctive processing, extraordinary packaging or unusual use and channel of sale, with particular attention paid to natural flavor and texture profiles. Specialty cheeses may be made from all types of milk and may include flavorings, such as herbs, spices, fruits and nuts. To be regarded as a specialty cheese, annual production cannot be more than 40 million pounds.

Reasons why the specialty cheese market is growing include: more U.S. citizens traveling abroad and trying unique varieties of cheese; U.S. restaurants offering a cheese course (a time-honored European tradition); greater access to a wide variety of cheese; an increased interest in ethnic food; the overall trend of U.S. consumers desiring more variety and robust flavor in food; and education from retailers, foodservice and cheese organizations on the use of unique cheese. Successful merchandising of specialty cheese is a key factor in the growth of the retail market for specialty cheese.

Artisan or Artisanal Cheese
The word “artisan” or “artisanal” implies that a cheese is produced primarily by hand, in small batches, with particular attention paid to the tradition of the cheesemaker’s art, thus using as little mechanization as possible in the production of the cheese. These cheeses may be made from all types of milk and may include various flavorings.

Farmstead Cheese
Farmstead cheese is another leading force behind the growth in traditional European-style cheese sales. Farmstead cheese is defined as an artisan cheese that is produced on a farm using only milk from the farm’s herd or flock. The milk cannot be obtained from any outside source. Farmstead cheeses may be made from all types of milk and may include various flavorings.

Sources

USDA Consumption Diary, 2017

Top U.S. Cheese Producing States - Statista, 2017

Cheese, International Dairy Foods Association.

Dairy Products Annual Summary, National Agricultural Statistics Service (NASS), USDA.

Dairy: World Markets and Trade, Foreign Ag Service (FAS), USDA, 2009.

Global Agricultural Trade System (GATS), FAS, USDA.

Natural and Specialty Blended Cheese Market Reaches $14 Billion in U.S., Packaged Facts, 2010.

Specialty Cheese

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.