The British Cheese Board, which represents manufacturers within the UK dairy market, said that producers of both higher-end branded cheeses and more value-focused private label products were both doing well in the current market.
As part of its agricultural outlook predictions between 2008 and 2015, the European Commission suggested that food demand, particularly in the higher value-added sector was likely to be directly affected by consumer spending concerns.
“The economic and financial crisis is expected to weigh heavily over the short-term perspectives of most agricultural sectors in the EU and at global level, even though the agricultural sector is generally more resilient to economic crises than other sectors,” stated the report.
Despite the commission’s claims, Nigel White, secretary of the board, suggested that the cheese segment had shown versatility in adapting to potential trading down by consumers relating to spending fears.
White suggested that after a drop in the UK market for more ‘speciality’ cheeses during the middle of 2008, demand seemed to pick up and return to normal by the Christmas period. This trend appears to be continuing into 2009 so far, as consumers continue to treat themselves to higher value foods like cheeses, he claims.
“While consumers appear to be cutting back on more big costs like holidays or getting that new car, they seem less concerned on economising on other areas like food,” said the secretary.
White suggested that both branded cheddars and more value products were doing well at the expense of dairy goods sold in the middle ground between quality and budget as a result of this economising.
He claimed that retailers had specifically driven the market for cheaper cheeses by looking to manufacturers to supply younger products designed with reduced shelf life.
The British Cheese Board added that consumers still appeared willing to pay for higher quality cheese products specifically for use in cooking or cheese boards when entertaining.
One noticeable shift within the market for cheese products suggested by White could be seen it the restaurant sector, where demand was appearing to switch among consumers.
“There is evidence that people are eating out less for lunch and cutting down on takeaways,” he said.
The British Cheese Board suggested that, in the UK at least, the packed lunch was seemingly undergoing a surge in interest that would again benefit cheese products.
Although White said that demand for cheese was likely to be down in the important restaurant market, conversely, pizza chains were reportedly witnessing growing interest for goods like mozzarella within their products.
In terms of the overall dairy sector, the European Commission said that milk production within the EU had shown slight growth, though by 2015 there would be a steady decline in bulk commodity output due to a focus on value added dairy products.
The outlook report concluded that despite apparent short-term setbacks from the recession within the Bloc’s agricultural sector, wider predictions were less bleak.
“Despite the significant short-term setback in the wake of the economic recession, the medium-term prospects for EU agricultural income remain positive with the aggregate income in real terms and per labour unit exceeding the very favourable 2007 year by 7.5 per cent in 2015,” stated the report.