Is exporting the way forward for British cheesemakers?

24 November 2020, 08:20 AM
  • How big is the export opportunity for British cheesemakers, and where can you reap the best rewards? We look into the growing appetite for the UK's cheese, and how Brexit and Covid could impact trade prospects
Is exporting the way forward for British cheesemakers?

Britain is internationally renowned for its cheeses, but the industry has undeniably had a challenging year in 2020. Following the outbreak of Covid-19, some producers were faced with ditching surplus stock as supply chains broke down and the closure of hospitality and deli counters cut off many farmhouse cheesemakers’ route to market.

The industry rallied together, however, and worked collaboratively to boost sales of speciality cheeses across the UK. National campaigns were created to champion British cheeses, like Neal’s Yard’s Buy British Cheese box, which got the backing of Jamie Oliver. Retailers also joined in with their own British cheese selection boxes.

But while Britain has a vibrant and competitive market of its own for farmhouse cheese, the UK’s imminent exit from the European Union at the end of the year has brought about whispers of new trade deals and emerging export opportunities.

What do these new prospects mean for the cheese industry? For those cheesemakers who are looking to broaden their horizons, demand is certainly there, according to James Monk, director of commercial services at Business West. “In 2019 the United Kingdom was the 11th biggest exporter of cheese,” he said.

In fact, last year the total value of British cheese exports was £676bn, a 5% increase on 2018, according to the AHDB.

Cheddar is by far one of the most popular cheese brands overseas, James says, but it’s not the only variety seeing an uplift as the appetite for British cheese grows. “Mozzarella has seen the largest growth in year-to-date export volumes, shipping 62% more between January and September than last year. Cheddar has also seen growth over this period, exporting 7% more volume (4,690 tonnes),” James said.

Indeed, Wyke Farms, the UK’s largest independent producer of cheese, has launched a new cheddar specifically for the export market. London 1856, a premium, aged British cheddar range, was developed to target the rapidly growing Asian cheese market, and it’s the first brand Wyke Farms has created purely for export markets.

The company said the cheese is part of its “Brexit proofing” strategy.

“In many of the emerging regions we are seeing the first generation within families who are able to travel; the first trip is often London to experience the tastes and culture of the UK,” says Rich Clothier, a third generation cheesemaker and managing director at Wyke Farms.

“Because of this and the success of the London Olympics, ‘Cool Britannia’ is a growing sentiment and one we have been market researching for a number of years. We are now ready with the right cheese, in the right place and at the right time.”

Where are British cheese’s best export opportunities?
For cheesemakers who are considering their options abroad, there are a few key markets to consider. France is the UK’s biggest export market for cheese. A massive £514bn of the total cheese exports were to the EU last year, £83bn of which was sent to France.

“I think that’s a lot to do with the fact that they eat a lot of cheese and they appreciate cheese,” said Lucy Randolph, senior exports manager for dairy at AHDB. During the pandemic, Lucy said some exporters have even seen their cheese retail sales in France grow, potentially due to the closure of the foodservice sector.

North America is the second-largest export destination for British cheese, with £61bn of the total share. But it’s Asia, where historically dairy is not a large part of the diet in many countries, poses a growing opportunity for British cheesemakers. UK exports were £36bn to Asia and £42bn to the Middle East and North Africa in 2019.

China’s still a work in progress for cheese,” Lucy said, but the perception around dairy is changing. In fact, the government has recommended that each person eats 300 grams of cheese per day due to its health benefits. “So slowly, more and more people are starting to do that,” Lucy said.

Elsewhere, Hong Kong and Singapore have more mature dairy markets, and Lucy sees more speciality cheeses being sold in these areas. What’s more, despite Covid, consumption of British cheese across these areas in the third quarter rose by 140%.

While Lucy couldn’t give a definite reason for the increase, she believes it could be due to the fact that eating out is very popular in these markets, and the pandemic has forced consumers to eat more at home.

Beyond these established markets, there are a number of new opportunities opening up across Asia. “One of them is Vietnam, which historically, has a big French influence, and therefore cheese and dairy isn’t new to them over there,” Lucy said. “It’s not a massive market but it’s a potential low-hanging-fruit market, and quite an interesting one for us.”

James noted that cheese exports have also increased in Japan and Egypt this year. During the first nine months of 2020, cheese and curd exports to Japan stood at £1.8m, an increase of roughly 12% on the previous year, according to HMRC data. In the first five months of 2020, the UK exported £2.7m worth of cheese to Egypt, up 242% from the same period in 2019.

“While some markets have taken a hit during the pandemic, those that have grown serve to reflect the sustained demand for British cheese even during challenging times,” James said.

Indeed, while cheese export sales were down around 10% on the third quarter due to Covid-induced shipping problems, the market has proved to be buoyant. “The fact that we’ve only really seen a 10% dip, I think is incredibly promising, and just shows the commitment that we have from our customers around the world,” Lucy said.

What does Brexit mean for cheese exports?
While 2020 has shown that there are exciting opportunities for cheese exports even amid a pandemic, Brexit is still lurking on the horizon. “We’re going to have disruption for the next year, I would say,” Lucy said.

“The requirements for new documentation and the introduction of new checks at the ports will undeniably create logistical disruption,” James added. “We are still hoping for a deal that will provide companies with added security in international trade. Meanwhile, companies must do whatever they can now to avoid delays and extra costs on 1st January 2021.”

While the scale of disruption for European and North American exports will depend on the trade deals that the UK agrees, Lucy said countries in Asia and the Middle East won’t be as affected.

Despite the expected disruption, James and Lucy argue that there are still opportunities to be taken with exporting. “We know that companies who export report greater profits and business growth,” James said. “It can also boost the local economy and provide more jobs, something which is needed during this difficult time.”

Plus, with consumers in other areas of the world used to paying much more for their cheese, British cheesemakers can command higher price points beyond their own borders, Lucy said. “If you are looking to expand your business I think exporting is the way forward.”

Exporting won’t be for every cheesemaker, and it’s important to weigh your options on the domestic market before venturing abroad. While export markets grapple with the impact of Brexit and Covid, there are still plenty of opportunities right on cheesemakers’ doorsteps.

The coronavirus pandemic has brought about huge challenges for the cheese industry – from working around retail closures to finding new ways to excite customers with virtual cheese tastings – but the crisis has also brought to light the innovation that the domestic market is capable of.

At home, cheesemongers have broadened their customer bases beyond their local communities this year by jumping into online delivery and social media marketing with both feet.

Whether you’re looking to dive into new exporting opportunities or you’re focusing on seeking out new domestic customers, the growing demand for cheese at home and abroad proves that the future is bright for British cheesemakers.

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