The effect of cheese

Almost three years have passed since the introduction of Russian food embargo. The maximum effect of the sanctions, according to experts and market participants, has received the industry of cheese-making, marking 2015 with multiple growth of 18.5%, but later it slowed down the growth because of lower consumer demand due to weak national currencies and unstable macroeconomic situation.

According to Rosstat, the production of cheese and cheese products during 2015 has increased by almost 20%. Experts emphasize that the increase in the production of cheese products has shown the greatest dynamics, however, other segments – in particular, production of curd and elite cheese grew as well. In 2015, imports of cheese and curd into Russia decreased by 36.5% and amounted to 201 thousand tons. 2016 continued these trends, however, the growth rate of the production of cheese decreased significantly, and continued to decline in early 2017. Most revealing for the first effects to cheese making became 2015: when at the beginning of the year, retailers ran out of imported cheese and domestic producers only started.

According to the Russian Dairy Research Center (RDRC) volume of the domestic production of cheese grew by 3.5% in 2016, reaching 464 thousand tons. However, the growth rate of cheese production in 2016 slowed down significantly. Production of cheese products in 2016, according to official statistics, amounted to 136.2 thousand tons, 2.4% more than in the previous period. In 2015 the growth of production of cheese products was equal to 14.8% compared to 2014. Productio of curd in 2016 fell by 1.9% to 405 thousand tons.

From January to April of 2017 production of cheese by enterprises of the Russian Federation increased by 1.2% (including curd the growth was 2.4%), of cheese products - by 9.9%.

Cheesemakers are confident that the prospects for niche of cheeses are not exhausted, especially in the production of curd and elite cheeses, which are gradually gaining the market share. However, market participants noted that in difficult conditions of savings consumer model, the majority of buyers can afford only cheap cheese and cheese products, the production of which will grow.


AN INSIDE LOOK

As noted by Alexander Egorov, an expert on quality of dairy products of the companies "Izbyenka" and "VkusVill", in recent years, the situation with the quality of cheeses on the market began to improve, but not fast enough to be able to talk about some dramatic improvements. "There is still a lot of falsification. The introduction of grocery sanctions gave impetus to more intensive production in Russia of analogues of European cheeses, but these cheeses are often made either practically by hand in a pretty small volumes, or the producers somehow think that Suluguni and mozzarella are the same," - emphasizes the expert.

According to Alexander Egorov, by the quality Russian cheeses can compete with foreign ones. The problem, the expert says, is that Russian consumers are for the most part not used to such cheeses and do not understand them.

"It is impossible to explain to a Russian buyer, on cheese with mold by French technology this mold can continue to grow in the cheese during storage and by the end of shelf life the cheese can play with all the colors of the rainbow, and that's fine. Our producers are unlikely to get one hundred percent match by organoleptic indicators with foreign cheeses, since they have different raw milk, feed, etc. I can also note that the most successful analogues of foreign cheese (Italian, blue, etc.) have those manufacturers where foreign technologists manage the production of these cheeses. The others in most cases get Suluguni under the guise of mozzarella", - speaks the representative of the retailer.

Director of LLC "Rozhdestvo" and manufacturer of cheese John Kopiski, is trying to assess the situation on the market objectively and notes that cheesemaking (especially artisan) in Russia is still not organized.

"As a result of today's sanctions, or crisis, we saw a big increase in the number of private and small producers of cheese – it is a fact. However, the market is not organized, it is difficult to sell, and there are serious issues with quality and reliability, as well as with general control of certification, both for raw materials and for finished product. Such cheeses are not produced in large quantities and almost all of them are handmade, as a result, the prices get higher and such a product is not available for a significant part of buyers," commented John Kopiski.

"With good milk and long-term commitment we can produce good cheeses here in Russia. Soft cheeses such as Camembert. Hard cheeses such as cheddar and Parmesan. This is already happening, but in small quantities. But our prices are higher. We have not received and do not receive production subsidies, our cost of financing are high and the payment period is shorter", says the founder and head of LLC "Rozhdestvo".

The investors continue to come to cheese market, despite its slowdown. Cheese production has a high cost: to produce 1 kg of cheese we need on average 12 to 16 liters of raw milk, moreover, hard cheeses have a high exposure over 1 year that means high energy costs, notes General Director of GC "Losevo" Eldar Beglov. Against this - low buying activity. Only a few can afford to buy high-quality cheese.
"Our company studied the demand for Italian soft and semi-hard cheese, having started in December 2013, a pilot plant based on our dairy production. Last year it was decided to build a separate workshop, since we have estimated that there is a demand for our cheeses. We plan to start its building in late 2018," - said the head of GC “Losevo”.

Large manufacturers in the cheese market still lack high quality of raw materials. This was a key reason for the exit of large and medium processors in the industry the production of raw milk (for example holding "Molvest").

"Our factory is provided with raw milk by 100%, we do not have enough equipment to increase production volume. However, the shortage of milk is a serious problem that hinders the development of the industry, because if there is no milk and one have nothing to make cheese from", - said the representative of GC "Alantal" Alexander Nikitin. – "It's worth noting that it is impossible to solve the problem of shortage of raw material from one side, if someone says that it is necessary to invest and develop only the increase in population of cattle, it will be wrong. We need to develop the processing; otherwise there will be no one to supply raw materials. Unbalanced development will lead to imbalance in the industry", - said Mr. Nikitin.

Earlier it became known that, "Dairy plant "Voronezhskiy", which is the key enterprise of "Molvest" (the 3rd place in Russia by volumes of processing of raw milk) has registered the trademark "Cheese production of Arkady Ponomarev". Earlier it was reported that the processor may start the production of blue cheeses of the type of Camembert.

"Cheese making is developing at a slow pace due to the lack of state support. Higher growth can be achieved only at the expense of own funds, with the profits from the sale of cheese. It is very difficult to obtain government support and preferential loans. We are at the very beginning. But we have a problem with insufficiently developed habit of consumption of cheese, especially in the regions", - said Vladimir Ievlev-Stark, the enterprise "Cheese without holes".

Definitely we can say that the interest to the industry is not lost, though, it becomes more thoughtful and leisurely on the part of potential investors. In case of an increase of consumer demand and living standards of the population, the increase of the production of quality cheeses can be accelerated.

Read full article in Russian on DairyNews.ru