Foodservice Drives Asian Cheese Demand

US - For US cheese suppliers, reports of soaring restaurant profits in China or same-store sales growth in South Korea or new unit construction in Southeast Asia spell opportunity—and a sizable one at that, writes Angélique Hollister Vice president, cheese and consumer products at the US Dairy Export Council.
calendar icon 21 May 2012
clock icon 3 minute read

Three new cheese foodservice and bakery research studies produced by the US Dairy Export Council (USDEC) examined the foodservice and bakery markets in Korea, China and a select group of Association of Southeast Asian Nations (ASEAN) countries, specifically, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam—also known as the “ASEAN 6.”

Three positive cheese growth messages emerged:

  • Cheese consumption in each market is booming. The report forecasts 10 per cent annual gains for the ASEAN 6 over the next five years, creating the need for an additional 110 million lbs. of cheese. China’s cheese market is expanding about 20 per cent per year, which should push total volume to more than 125 million lbs. by 2015. South Korea’s market is expanding more sporadically but grew 30 per cent to 194 million lbs. from 2006-2011 and further expansion is ahead.

  • The foodservice and bakery channels are driving the gains, accounting for 80-90 per cent of cheese use, depending on the country.

  • Imports account for more than 70 per cent of Korean cheese consumption, around 85 per cent of ASEAN 6 consumption and a whopping 98 pe rcent of Chinese consumption. And that situation is not expected to change soon due to scant cheesemaking capacity and no plans to invest on the horizon.

ASEAN 6 foodservice operators questioned in one of the reports forecast 10- 25 per cent cheese usage per year for the next three to five years.

US suppliers have earned recognition for efforts to meet buyer specs, particularly in Korea, and US cheeses boast a reputation for quality. However, US mozzarella is still viewed by many consumers as too white, and salt content is often an issue. Despite progress a perception lingers among some that US product is behind that of Oceania and Europe.

There still exists a gap in basic cheese knowledge in all three regions that limits the uptake to the most popular varieties— mozzarella, cream cheese and processed cheese.

Korea, the most advanced in terms of cheese use, is an example of what cheese education can accomplish. The country imported no gouda in 2007. In 2011, gouda was gaining on cream cheese as the third largest seller by variety after pizza chains began incorporating it as a topping.

The United States is on the right track. US sales have been rising to all three regions. In 2011, US cheese sales to Southeast Asia, Korea and China/Hong Kong grew 46, 85 and 117 per cent, respectively, to a combined 122 million lbs. Targeting foodservice opportunities could drive those gains significantly in the years ahead and USDEC’s marketing programs will continue to lay the groundwork to build image and increase the overall sector’s recognition of the United States as a quality and committed cheese supplier.

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