Overcoming cheese challenges amid fat shortages and export tariffs

18 Oct 2022 --- At SIAL 2022 in Paris, FoodIngredientsFirst examines the market dynamics in global cheese sectors. Lactalis underscores fat shortages while other companies flag a “dramatic slowdown” in cheese exports. US companies also discuss the uphill battle of gaining market share in Europe, while the US Dairy Export Council highlights American innovation. 

Dairy innovators share insights on the evolving cheese sector and the trends steering innovation. Meanwhile, this year’s event is spotlighting activated charcoal cheese and floral and fruit inclusions. 

Dairy fat shortages
Stephane Brudi, commercial director of cheese and trade at Lactalis, flags that while the demand and supply of milk remain steady, rising in parallel about 2% per year, there are some headwinds for European dairy companies, as access to fat is increasingly difficult.

While the demand and supply of milk remains steady, there are some headwinds for European dairy companies.“We are increasing our buying efforts from different suppliers – including outside of Europe. However, the problem of limited fat supply affects the sector as a whole,” he explains.

As the supply is squeezed, prices for fat increase; thus, consumers see pricier products on shelves. 

One aspect that has helped lower prices is China’s weak demand for milk. Brudi attributes the feeble demand due to COVID-19 lockdowns this year in China. 

Brudi expresses optimism that the inflation will not continue into next year.

Market complexities
Meanwhile, Frank Alfaro, director of foodservice and export sales at Belgioioso Cheese, sheds light on the uphill battle of trying to win market share in the European market.

“US cheese is a baby in Europe,” highlights Alfaro.

He explains that cheeses have names which denominations are protected under EU legislation. Commercializing under the names “Fontal” instead of Fontina, “Belgranelli” instead of Parmigiano and “Crumble blue” instead of Gorgonzola. 

Furthermore, according to Alfaro, US cheese makers have to deal with strident tariffs of approximately US$2 per kg of cheese exported to Europe, almost double the amount of duties Europeans pay to ship their products to the US.Van der Heiden Kaas presented its Dilano Black Lemon cheese.

“There should be lower tariffs during times of high inflation. Legislators should come together and do what’s right for the people,” highlights Alfaro.

Other headwinds include the “dramatic slowdown” in cheese exports to some countries, such as South Korea, or the flattening of sales in China. Furthermore, Alfaro adds that securing containers to transport products is still tricky, adding supply chain issues to the list of headaches.

Meanwhile, Alfaro flags good sales in Latin America, specifically Mexico, whose currency has not devalued strongly against the US dollar.

US market offers more than just processed cheese
The US Dairy Export Council’s senior vice president of global cheese marketing, Angélique Hollister, speaks to FoodIngredientsFirst about the Council’s push to break into the European market. 

“The US cheese industry has a wide variety of cheeses that go beyond processed cheese.”

“Our industry makes over a thousand varieties of cheeses between European-style products to American originals. And if you take the US, we’re a country of immigrants, and so that heritage comes from other global countries, Hollister explains. “So these make our offerings very versatile.”

The US Dairy Export Council’s senior vice president of global cheese marketing, Angélique Hollister.She says people see Europe as the place to buy cheese and hopes to change this narrative. 

“The US is opening doors to different products to more varieties.” 

“Melting” cheese demand 
When it comes to processed cheese and, more specifically, “melty” cheeses, St. Paul Smart Cheese Solutions is exhibiting concepts that do “exactly what a melting cheese should do,” a trend that initially started in the US.

Sales manager, Egbert van de Winckel, outlines how they use emulsifiers to create cheeses that tick all the boxes for their melting properties. “Anything is possible with our solutions, and we go as far as we can for our customers,” he comments. 

“The company also has a hybrid melting cheese, which is a win for consumers seeking the balance of a plant-based version. 

“It’s partially plant-based,” he says. “You can add a little bit of milk fat, which can be blended with real cheese and then used for pizza cheese, for instance.”For cheese lovers across the globe, innovation in the dairy scene is an exciting and appealing prospect.

According to van de Winckel, it’s a lot cheaper than standard cheese because it’s based on palm oil, coconut oil, and starch. “And if you blend it, you don’t see any difference, and it makes a big impact on price,” he claims. 

Loaded fries expands beyond the States
Meanwhile, the loaded fries craze is heating up in Europe. The company also uses emulsifiers to get the right texture for the cheese used in loaded fries. 

The cheese sauce is a processed cheese but with more water, states van de Winckel. “The overall trend started in the US. They put cheese sauce on anything, fries, salads, meats and so on.”

And in the UK, loaded fries are picking up pace. According to the company, the trend will take off in the rest of Europe in “the next two years.”

Audrey van Ham, marketing manager at St. Paul Smart Cheese, says the European market is now “becoming a little bit more adapted to it” as the company develops more possibilities for cheese, sauces and snacks. 

“Our cheese curds are adapted to the US and UK, but not the rest of Europe yet,” she notes, adding how the company is eyeing more acceptance of cheese snacks. 

Strawberry Cocos from Jacks Cheese is made using coconut flakes and strawberry flavors.Charcoal cheese 
Van der Heiden Kaas, a Dutch-based company, presented its vitamin-D enriched Dilano Black Lemon cheese.

Lucas Heijboer, marketing and sales associate, says: “This is a cow cheese, with two months of maturation, and the beauty is in the color. It can also be compared to a young gouda.”

The cheese has a “hint of lemon, which makes a very nice combination,” he adds. 

Commenting on consumer reactions, Heijboer says it’s all been very positive. “The color gets people’s attention, and then they think it tastes nice.”

The cheese is currently being exported worldwide from the Netherlands, and in the future, Heijboer says there could even be potential for a black goat’s cheese or different black varieties. 

Specialty and unusual flavored cheeses 
Meanwhile, Dutch brand Jacks Cheese presented its line of flavored specialty cheeses. 

Hajar Gaamouz, administration and export assistant, says the unusual flavors are crucial to the company’s development. 

“We have many flavored cheeses and work on replicating the right flavor. Some examples include green pesto, lavender pesto and black garlic.”

Strawberry Cocos is a stand-out flavor on the stand, a combination of strawberry and coconut, made using coconut flakes and strawberry flavors. 

Another concept is the Fancy Rose Leaves Cheese, which features rose petals inside the cheese itself. Rose and cheese may be an unexpected pairing; according to Gaamouz, it tastes fruity. 

By Elizabeth Green, with additional reporting from Benjamin Ferrer, Marc Cervera and Inga de Jong at SIAL 2022, Paris