The gourmet cheese market could follow in the footsteps of the craft beer industry. Photo / Getty Images
The gourmet cheese market could follow in the footsteps of the craft beer industry. Photo / Getty Images
I once read that before World War I, back before decades of blander mass production, New Zealand seed catalogues looked a lot more like they do in the 21st century, with much more variety. People were growing endive and cavolo nero, for example, and lots of interesting fruits.
But with one of the highest mortality rates among countries who participated in the war, followed by a deadly flu epidemic and then the Great Depression a decade later, it's no wonder that from the 1920s New Zealand focused on survival … and therefore on potatoes, cabbages and the accursed mashed swede.
In parallel, better transport links and better refrigeration and mass production led to lots of our food industries consolidating. Local dairy factories progressively closed and companies combined until eventually Fonterra emerged as the behemoth it is today. Local breweries followed the same path until DB and Lion shared most of the market. Flour and bread, seafood, vegetables, canned fruit ... all followed suit.
Mass production has been a boon for New Zealand. We produce a lot of quality food and drink for reasonable prices, and we sell much of this to the world to pay our way. But sometimes it has been at the cost of, well, flavour, texture, and adventure.
But that missing variety has been coming back. We Kiwis are now much better off for being able to buy a fresh dark rye loaf, try a local truffle, eat a weird-looking heritage tomato, drink some outstanding beer and, increasingly, obsess over some of the best cheese in the world.
More than that though, this flowering of experimentation is becoming a serious value-add contributor to our economy. Craft beer exports have the potential to follow our wine exports. I reckon our artisan cheese industry might be on the same path.
Craft beer has shown the way
Nothing goes better with a sharp gouda than a red IPA. The cheese-beer match might go deeper than taste, though. Like cheese, the beer market was dominated for generations by large breweries making bland commodity product, and we didn't know what we were missing. Early rebels like Mac's fought hard for better beer, but by 2011 the market for small brewery beer was actually shrinking.
There are almost as many reports on what's happened since then as there are New Zealand craft breweries now (194 of them, making 1600 unique beers, apparently). It shows New Zealand's small-brewery sector is growing in production, but this is mostly driven by lots of little start-ups showing moderate growth, rather than existing breweries increasing production. Across this sector, total production has gone up about 20 per cent a year, but the number of small breweries has increased almost as much (17 per cent a year) and the average production of small breweries has increased by only about 2 per cent a year.
The growth in small breweries has been enormous. Source / Beertown (2017)
Beertown notes that this kind of industry profile is typical of an emerging sector. This also implies there will be churn as everyone fights for margin.
The industry continues to mutate, too. Brewpubs are returning, and some brewers are focusing on seasonal-only releases, or a new release each month. Margins are tight, but it's great for us consumers.
Shanghai's Beer Lady
The ANZ's annual Craft Beer Reports show a trend to exporting - even in 2015 a third of craft brewers exported, and another third wanted to export within two years. But there are challenges – beer needs to be fresh of course, so there are some supply chain issues. Exports are reportedly static at about 10 per cent of production – compare that with the wine industry, which exports 80 per cent, and brings in export earnings of more than $1.6 billion.
The opportunities out there are significant, including in Asia. Writing for the Spinoff, Sam Gaskin tells of a shop in Shanghai called "The Beer Lady", which sells more than 300 beers, including New Zealand's Tuatara and Epic. China is the biggest beer market in the world, and its beer imports grew 15.8 per cent over 2017. Gaskin says New Zealand sold $2.7m of 5%+(abv) beer to Australia in 2016 (our biggest market), but China is second at $0.7m.
It's not easy though: "More brewers are entering the market, prices for craft beer are falling, and every new shipment throws up a new issue with packaging, labelling or compliance". Gaskin quoted Epic founder Luke Nicholas, who said it's "imperative that New Zealand brewers establish themselves in the market before China's sleeping giants wake up to the craft beer opportunity".
Cheese on a roll globally
Consumer curiosity is also reflected in the global cheese market, particularly artisan cheese.
A 2016 study reported that the global cheese market was growing at an annual compound growth rate 4.4 per cent per year, that it had increased to US$97.5 billion (NZ$145b) in 2012, and was predicted to be up to US$105 billion by 2019.
There's endless diversity when it comes to cheese and this creates and industry ripe for experimentation. Photo / Getty Images
A Scottish report found people in the nation, which has a temperate and a population of about five million, were eager to test the palates with everything from "fresh cheese or soft cheese from cow, goat or sheep milk; unripened to aged cheese; mild to strong flavoured cheese, a wide variety of cheese styles exist around the world".
This is the thing about cheese. The possibilities are really limited only by the creativity of the maker.
Burgeoning market
A third of grocery sellers had a speciality cheese counter and about half of all shoppers would take a look, implying a clear interest.
Consumers are also prepared to pay more for local and organic cheese, and for the backstory.
Today, the US cheese market is growing, and artisan cheesemakers' share of that market is also growing, as US cheesemakers have responded with innovative products. Growth is coming from small and mid-sized companies, which have grown steadily for 20 years.
ANCO, which says it is the largest importer of specialty cheese in the US, reported in 2015 cheese consumption was at an all-time high – it had increased by 42% over the past 25 years, and was predicted to grow 4 per cent a year to 2018.
The state of Wisconsin (climate: temperate; population: about 5 million) produces about half the speciality cheese made in the US. In 2004, Wisconsin's specialty cheese made up about 9 per cent of all cheese produced in that state, but by 2014 that share had jumped to nearly a quarter (23 per cent). That's nearly 100 per cent growth.
By 2017, speciality cheese was nearly 8 per cent of the US$120.5 billion speciality foods market.
Today, the global artisan cheese industry is growing exponentially. Ireland's speciality sector, for example, has about 50 farmhouse cheese makers, who increased sales by 43 per cent in 2012 alone. Dutch cheese exports increased by almost 9 per cent in 2016.
Beware the competition
Today, the global artisan cheese industry is growing exponentially. Ireland's speciality sector, for example, has about 50 farmhouse cheese makers, who increased sales by 43 per cent in 2012 alone. Dutch cheese exports increased by almost 9 per cent in 2016.
Even Brazil – following New Zealand's lead – has repealed the law banning the sale of unpasteurised cheese, and artisan cheese production was predicted to grow. In 2013, a Canadian Lankaaster Aged Loaf gouda won best cheese at the Global Cheese Awards – no surprise, because speciality cheeses are taking off there, too.
The Asia-Pacific is very much part of the trend, with the cheese market in the region predicted to experience the highest growth rate in the global cheese market, with a compound annual growth rate of 8.1 per cent up to 2021, based on these countries' growing economies and middle class.
Australia is certainly looking to capitalise. The Western Australian government has identified artisan cheese "as a key growth market for WA producers, with the potential to add millions to the state economy". Dozens of new cheesemakers have appeared in South Australia in recent years.
The potential in North Otago
In Aotearoa today, one estimate suggests we have about 214 speciality cheeses made by 23 cheeseries. But the absence of Cartwheel Creamery and some others suggests the industry is moving fast.
With speciality foods and beverages, differentiation and specific local backstories are what it's all about. Innovation will add further value here – like the Whitestone Cheese Co's use of local bacteria strains, for example.
Whitestone is a local industry leader, founded in 1987 and now employing 68 staff, and selling throughout New Zealand and the world. It continually innovates, making cheeses that reflect its North Otago microclimate. For example, CEO Simon Berry spent months trying to locate a local version of the Penicillin roqueforti bacteria found in French limestone caves – this even included some cheese-related exploring of his own in Otago's caves. Berry finally got the word that a new blue culture had turned up in some hay on a South Canterbury cattle farm, and the result was Whitestone's new Shenley Station Blue (named for the farm), using the company's new 45 South Blue mould strain.
Simon Berry is part scientist, part cheesemaker. Photo/File.
Adrian Walcroft, the founder of Cartwheel Creamery in the Manawatū, is similary passionate.
"The amazing thing about cheese," he says, "thousands of different cheeses all start with the same basic ingredients: milk, some cultures, rennet, and salt. When you look at cheese, that's all there is. But just add subtle changes in the process, the time at which you do things, how much you heat things, how long you stir for, which cultures you choose, and you get this cascade of hundreds of different choices."
Cartwheel Creamery's Opiki Mā, with Garage Project's Hops On Pointe. Photo / Supplied
To the cheese nerds out there, Cartwheel's Opiki Mā soft white rind is sublime – it's a perfect pas de deux with a Garage Project Hops On Pointe – and it's a perfect example of the extraordinary cheeses being made in Aotearoa.
Regulatory shifts
New Zealand's specialist cheese industry has seen a number of important regulatory shifts, including a key one just a few months ago.
The deregulation of the dairy industry in the early 2000s, which saw the birth of Fonterra, also protected the small players' access to milk, providing a basis for the speciality cheese sector to thrive. Later, in 2009, restrictions on the production and importing of raw milk cheese were removed – this not only allowed Kiwi consumers to get their hands on a wider range of great European cheeses, it also allowed a few raw-milk cheeseries to get underway in New Zealand.
One of those local raw-milk cheesemakers was the late Biddy Fraser-Davies, who made her famous Cwmglyn cheese on her farm outside Eketāhuna (it's pronounced "Coom-glin"). Sadly, Cwmglyn Farmhouse Cheese is no longer operating, but we all owe a debt to Biddy for her successful lobbying on behalf of artisan cheesemakers.
Biddy Fraser-Davies, champion of small cheesemakers. Photo / Supplied
I was lucky enough to see Biddy in action at the Great Eketāhuna Cheese Festival in May this year when – largely because of her efforts – the Minister of Food Safety announced a more light-handed regulatory regime for small cheesemakers.
The changes included a new online food safety template. Compliance is now a lot less onerous, and the online approach also requires less travel from MPI assessors, which further lowers compliance bills for the cheeseries. Biddy commented at the time that the new regime meant "a huge saving in cost and time".
Rocky road
The ANZ's craft beer reports identify challenges for that industry that also resonate for the artisan cheese industry. Craft breweries are running out of productive capacity. Some are attracting investment (ParrotDog famously crowd-sourced capital), some are out-sourcing production (Garage Project to bStudio in Napier), and there are lots of collaborations. Some have been sold to the big brewers, too, of course – like Panhead to Lion.
The whole craft beer value chain is being upgraded as sales grow. Hop production is expanding rapidly. New bottles and cans are being developed to differentiate brands and to prolong freshness. New distribution networks are being negotiated. Supermarkets are using craft beer as a differentiator, and providing it more shelf space. Restaurants are expected to have a beer list to match their wine list, and to pay attention to matching those beers with their food.
The speciality cheese industry will need to meet each of these challenges, too.
The best news for fans of craft beer and speciality cheese like me is that both industries are also looking to leverage and extend New Zealand's competitive advantages. Beer needs innovative varieties of hops and malt flavours, and it needs to experiment with New Zealand yeasts. Cheese needs lots of different kinds of milk, and it needs to experiment with local bacteria. Both need fresh water and the best production techniques and technology.
Now, where's my Garage Project Golden Brown and my Talbot Forest Shropshire…?
- Kevin Jenkins is managing director of professional services firm MartinJenkins, and a director of digital automation firm Quanton among other roles.
