Cheese

INDUSTRIAL CODES

NAICS: 31-1513 Cheese Manufacturing

SIC: 2022 Natural, Processed, and Imitation Cheese

NAICS-Based Product Codes: 31-15131, 31-15134, 31-15137, and 31-15137

PRODUCT OVERVIEW

Cheese manufacturing is the second largest industry based on milk. The production of cottage cheese is reported by the Census Bureau as part of the fluid milk industry, the largest of the five. The other three are ice cream, butter, and dry, condensed, and evaporated products.

Most of cow's milk by weight is water (88%) followed by lactose (4.7%), fat (3.4%), protein (3.2%), and minerals (0.7%). The protein in milk is further subdivided into casein (about 80% of the protein) and the solids in whey (20%). The basic raw material of cheese is the casein in milk. The word is derived from the Latin for cheese (caseus). When young sucklings of any mammal species drink milk, enzymes in their stomachs cause casein to curdle into digestible solid clumps. Professor David Frankhauser of the University of Cincinnati, in a paper titled "Rennet for Making Cheese," provides a plausible scenario of how humanity must have discovered cheese making.

Presumably [he writes] the first cheese was produced by accident when the ancients stored milk in a bag made from the stomach of a young goat, sheep or cow. They found that the day-old milk would curdle in the bag (stomach), yielding solid chunks (curds) and liquid (whey). Once they discovered that the curd-chunks could be separated out and dried, they had discovered a means by which milk, an extremely perishable food, could be preserved for later use. The addition of salt was found to preserve these dried curds for long periods of time.

The enzymes causing the curdling are called rennet, rennin, or chymosin. Initially rennet was obtained by slicing up stomach tissues and inserting them into containers of milk. In modern practice chymosin is produced by recombinant DNA techniques in cultured bacteria.

Natural Cheese Production

Natural cheese is produced by preparing the milk, coagulating it to produce curds, treating the curds, draining off the whey, knitting the curds, salting them, pressing them, and ripening the cheese mixture. Cheese may also be dried, grated, or shredded.

In the preparation stage raw milk is first adjusted to a predetermined fat content by skimming off cream or by using a centrifuging process to accomplish the same end. Once the desired fat content is reached, the milk is pasteurized, that is to say it is heated, but not boiled, and held hot long enough to kill off all pathogens harmful to humans. Most cheeses are coagulated using rennet, but certain kinds of cheeses (Ricotta and cottage cheese being examples) are coagulated using acid. With many types of cheeses a two-stage coagulation is common in which bacteria are used as starters and, after the curdling process begins, typically because lactose-consuming bacteria gen-erate lactic acid, rennet is added for the full digestion of the casein. The process requires between 20 and 35 minutes depending on the cheese being made, longer if acid alone is used. Curd treatment consists of making the curds larger or smaller by cutting them apart or pressing them together. Cutting curds reduces the moisture content; creating larger formations causes these to retain their moisture. As part of treatment most cheeses undergo a heating process; the curds are scalded, cooked, or simply heated to influence their moisture content and texture.

In the draining process whey is removed from the cheese using a heat process, mechanical treatment like cutting, stirring, oscillating or pressing the mixture, or some combination of the two. Spores of penicillium molds are injected into interiorly mold-ripened cheeses like Roquefort, blue cheese, and the French Bleu d'Avergne during the draining process. There are numerous varieties of penicillium molds—not to be confused with penicillin, the drug, derived from species of mold other than those used in making cheese.

Throughout the cheese-making process producers aim at bringing about desirable chemical transformation known to take place if the environment is managed appropriately. After the whey has been drained, curd knitting takes place. Producers use mechanical devices to pull, knead, press, draw, and shape the cheese. Their motivation for going to these lengths is knowledge that lactic acids forming in the cheese must be evenly distributed in order to achieve desired cheese textures. The maker controls the curd's acidity in this process and, for certain cheeses, may also introduce additives. Salting of cheese is an important step. Producers apply salt to the outside of shaped blocks or dip blocks into salt-brine briefly. Salt draws residual whey components to the surface of the clump, slows down the chemical processes inside the cheese, acts as a preservative, and plays a role in crust formation. Finally, with the exception of cottage or cream cheese, most varieties of cheese undergo a period of ripening. Ripening may take a few weeks up to a year or longer. Cheese continues to form as it ripens, bacteria and enzymes continuing to work. They slowly transform the texture, taste, and chemistry of cheese. Cheese producers maintain temperatures and humidity ideal for each variety as it ripens.

Processed Cheese

The first step in making processed cheese is to make natural cheese in the laborious way described above. Processed cheese manufacturing is thus a form of secondary processing of natural cheese in an effort to transform it into a uniform, industrial product. The method originated in Switzerland but was adapted so widely in the United States that processed cheese is also called American cheese. American cheese is usually made of Cheddar or Colby. The producer begins with blocks of finished cheese. Rinds are cut off and the cheese is ground. Sampling determines its fat and moisture content. The ground cheese is melted until the fat and the protein portions (the serum) separate. Emulsifiers are mixed in, their quantities based on the earlier sampling. Emulsification causes uniform dispersion of fats throughout the mass and their suspension in the serum (the liquefied protein). This produces a high level of homogeneity absent from the original Cheddar or Colby. The molten cheese is rapidly cooled, shaped, and packaged in oxygen-free environments; in the absence of oxygen molds cannot survive. Processing takes place in a nitrogen gas atmosphere.

Cheese Classification

The most common classification of cheese is by its degree of hardness or consistency. Those inclined to make finer distinctions classify cheeses as soft, semi-soft, semi-hard, and hard. The semi-soft category is often reserved for processed cheeses. Others are content with three categories: soft, semi-hard, and hard. Using this last classification, examples are the following:

• Soft Cheese: Brie, Camembert, Feta, Gorgonzola, Roquefort, Mozzarella, Muenster.
• Semi-Hard Cheese: Brick, Gouda, Monterrey Jack, Provolone, Stilton.
• Hard Cheese: Asiago, Cheddar, Colby, Emmental, Gruyere, Jarlsberg, Parmesan, Romano.

There are hundreds of varieties of cheese, of course, and people have strong loyalties to the cheeses that they favor. With this in mind any listing of examples will invariable leave out someone's best-liked variety. To see a list of 103 varieties, the reader is referred to CheeseNet on the Internet (see references). Even that list, of course, will leave some seekers dissatisfied. The total count of varieties is said to exceed 2,000 the world over.

We can also classify cheese by the mammals from which the milk is obtained. Most common animals are cows, goats, ewes, camels, and buffalo. Cheeses are also classified as having smooth, holey, and veined surfaces. Cheese with holes (like Emmental and the American Swiss cheese) are made by introducing gas-producing bacteria in the cheese; veined cheeses are produced by introducing molds. Consumers also sometimes classify cheeses by their countries of origin. Wherever milk-producing mammals are raised, fine cheeses are also produced. Some of the best of these are eaten all around the world. In the United States cheese varieties from European countries are consumed in large quantities and are widely known. Brick cheese (originally from Wisconsin and so named because actual bricks were used to press the cheese), Colby, Monterey Jack, and Swiss—America's compliment to Emmental produced in Switzerland—are distinctly American cheese varieties as is, of course, processed cheese in a great variety of forms.

MARKET

Cheese-making in the United States accounts for much of the demand for cow's milk. Annual production consumes around 38 percent of all milk produced. In 2005 cheese shipments by U.S. producers were a $27.1 billion industry. Cheese production has been growing at a rate of 3 percent per year in the period from 1992 to 2005, but this period had one major hiccup. Between 1992 and 1998, the industry advanced at a rate of 3.5 percent a year but then declined sharply for two years between 1998 and 2000. Growth picked up again in 2001 and has been growing at 6.5 percent per year to 2005, the last year for which data were available at the time of writing.

Industry growth generally has been supported by growing consumption of cheese, but market fluctuations have been due to price issues in the dairy industry as a whole—most particularly wide swings in milk pricing beginning in the mid-1990s. Demand for cheese has been increasing steadily as shown by per capita consumption figures maintained by the U.S. Department of Agriculture (USDA). Cheese consumption per person stood at 25.9 pounds in 1992. By 2005 consumption had increased by nearly 6 pounds to 31.7 pounds per capita. Natural cheese consumption grew more energetically whereas processed cheese showed signs of weakness, particularly late in this period. Per capita consumption actually dipped between 2004 and 2005. In 1992 natural cheese accounted for 56 percent of consumption, in 2005 for 59 percent.

Average milk price in the period 1981 through 1995 was between $12 and $14 per hundredweight (cwt—equivalent to approximately 11.6 gallons of milk). In the 1996–2005 period, prices began to fluctuate more wildly, the average price falling into the $12 to $16 per hundredweight range. Average price changes year to year (and much more pronounced changes month-to-month) tell the story of increasing fluctuation: from 1992 to 1993 the change in average price was 29 cents per cwt, from 1993 to 1994 it was 17 cents, and from 1994 to 1995 it was 23 cents per cwt. But the next four years set the pattern for the future: 1995 to 1996 showed a $2.14 swing in average price upward, 1996 to 1997 a $1.54 shift downward, 1997 to 1998 a $2.16 swing upward—and so on throughout the period to 2005. This was a period of decreasing dairy cow population and sharply increasing output of milk per cow. The price volatility, however, is more directly traceable to the 1996 Farm Act. It called for elimination of milk subsidies by 1999, later reversed; it also reorganized the subsidy schedules. The 2002 Farm Act ensured continued milk subsidies but subsidy schedules, simplified by the 1996 act, continued in place—as did swings in average milk pricing.

Production of cheese by variety is available from the National Agricultural Statistics Service (NASS), an ele-ment of the USDA, based on weight of production. Total production of cheese in the United States in 2005 was 9,127 million pounds. NASS data indicate that Cheddar is the largest variety produced in the United States (33.4% of total) closely followed by Mozzarella (33.1%). Third place was held by other types of Italian cheeses (8.6%). Other American cheeses, including Colby and Monterey (8.3%) held the fourth place; cream cheese and Neufchatel (7.6%) came in fifth place. Processed cheeses were made from Cheddar and the "other American" categories.

Varieties with the largest increase in production from 2004 were Hispanic cheeses (up 17.5% from 2004), Brick (up 9.8%), and Muenster (up 7%). Losing production tonnage were Limburger (down 10.1%), and cream cheese and Neufchatel (down 1%).

Connoisseurs of cheese may buy all kinds of imported cheeses, but imports represent a relatively small fraction of total U.S. cheese consumption—around 5 percent. In 2005 consumption was 9,409 million pounds and imports represented 461 million pounds of that total. Imports have been growing at an annual rate of 3.8 percent, but U.S. exports, while smaller in total tonnage than imports (128 million pounds in 2005) have been growing at a rate of 11 percent per year in the 1992 to 2005 period—suggesting that America makes high quality cheeses. Net imports, consequently, have been growing at a rate of 2.2 percent per year. Thus, in 1992, 4.3 percent of consumption was satisfied with imports contrasted with 5 percent thirteen years later.

Trends Supporting Cheese Consumption

People are cutting back on dairy foods if consumption is measured by weight of product on a per person basis. People are drinking less milk, eating less ice cream, consuming less cottage cheese, sour cream, buttermilk, yogurt, dried milk, evaporated milk, and also less whipping cream. Declining per capita consumption does not mean that the public is spending less. On the contrary. Expenditures are rising, but actual consumption of product is down. People are paying more for less quantity of dairy products. This trend had held for twenty years by the middle of the first decade of the twenty-first century. Only two categories defied the trend—butter and cheese. Why are these two products hold-outs? The USDA attempted an explanation in its 2001–2002 Agricultural Fact Book. After noting per capita consumption trends, the Fact Book authors come to the following conclusions regarding cheese:

Lifestyles that emphasize convenience foods were probably major forces behind the higher consumption [of cheese]. In fact, more than half of our cheese now comes in commercially manufactured and prepared foods (including food service), such as pizza, tacos, nachos, salad bars, fast-food sandwiches, bagel spreads, sauces for baked potatoes and other vegetables, and packaged snack foods. Advertising and new products—such as reduced-fat cheeses and resealable bags of shredded cheeses, including cheese blends tailored for use in Italian and Mexican recipes—also boosted consumption.

Production figures for 1997 and 2002 underline the USDA's findings. These production figures distinguish between shipments purchased for consumption by consumers (packaged cheese shipments) and shipments purchased by the food industry for use in other food products (bulk cheese shipments). In both years, bulk shipments of natural cheese, the larger component of the market, accounted for 65 percent of shipments, the cheese thus reached industrial and institutional buyers. Nearly 40 percent of processed cheese also moved in bulk. Butter, similarly, is a product diet-conscious individuals avoid, but producers of ready-to-eat meals and snacks incorporate into the product because it delivers a taste very difficult to achieve using substitutes. More than half of all butter shipments were also bulk shipments.

KEY PRODUCERS/MANUFACTURERS

The leading producer of cheese in the United States is Kraft Foods. James L. Kraft began the company in 1903 as a cheese wholesaler in Chicago, Illinois. In 1914 the company began making its own cheese and supplied canned cheese to the military during World War I. Kraft pioneered processed cheese production in the United States and received many patents for its process, the first one in 1916. Kraft was also a pioneer in specialty cheese products, introducing Velveeta in 1928 and Kraft's Macaroni & Cheese dinners in 1937, a ground-breaking entry into the prepared food market. The company remained independent until 1988 when it was acquired by Philip Morris, the tobacco company. Philip Morris had already purchased General Foods (in 1981). In 1989 the company formed Kraft General Foods from the two acquisitions and, in 1995, renamed this element Kraft Foods. Philip Morris, renamed Altria, spun off Kraft Foods in early 2007. Kraft had revenues of $34.4 billion in 2006 of which cheese and dairy products represented $6.4 billion. The company's overall share of the cheese market in the late first decade of the twenty-first century stood at around 25 percent, lower in natural cheese and higher in the processed cheese categories.

The largest cheese market segment, representing nearly 40 percent of all cheese made, is the chunk or loaf market. Leaders in this segments, after Kraft Food, are Tillamook County Creamery, Lactalis USA, Land O'Lakes Inc., Cabot Creamery Inc., Cacique Creamery Inc., H.P. Hood LLC, and Saputo Cheese USA. Dairy cooperatives play an important role in the dairy industry as a whole—and cheese is no exception. Tillamook, Land O'Lakes, and Cabot are all cooperatives. Tillamook began in 1909 in the county of that name in Oregon and has been operating since that time as a farmers' co-op, currently representing 150 dairy families but distributing cheese products across the nation and other dairy products regionally. Land O'Lakes is the nation's third-largest dairy cooperative and fourth largest producer of natural chunk cheese. The cooperative is based in St. Paul, Minnesota, and has 1,200 members. It was founded in 1921 and is the largest producer of butter in the United States. Cabot is the nation's fifth largest chunk cheese producer, a dairy cooperative based in Montpelier, Vermont, first organized in 1919. It is a producer and distributor for 1,500 farms, operating four plants.

The other leading participants in this segment of cheese manufacturing, in addition to Kraft Foods, are corporations. Lactalis USA is the representative in the United States of Groupe Lactalis, a very large multinational dairy company based in France. Groupe Lactalis is Europe's largest cheese producer with top market share rank in France as well as Italy. It holds third place in chunk natural cheese (fifth place in natural shredded cheese) in the United States. Lactalis built plants in Belmont, Wisconsin and Turlock, California and owns two other acquired operations. Cacique is a relatively recent corporate entry into cheese making in the United States. Established by a Mexican family in 1973 in California, Cacique began making just 100 pounds of cheese per day in a tiny facility, producing unique Hispanic cheese products. The company has achieved fifth-place ranking in chunk natural cheese and is the leader in the rapidly growing Hispanic cheese varieties. Cacique continues to be family-owned and operated. H.P. Hood, with sixth-place rank, participates in the category through Heluva Good Cheese Inc., a company it acquired in 2004 as part of its acquisition of Crown Foods. Heluva was established in 1925. It began and is still operating in Sodus, New York (near Rochester). Since then the company has expanded and operates facilities in the states of New York, Massachusetts, Pennsylvania, Virginia, and Tennessee. Saputo Cheese USA is the U.S. element of Saputo, Inc., a major Canadian multinational cheese company. Saputo had revenues of $4 billion (Canadian) in 2006. It has operations in Canada, the United States, Argentina, and Germany. Saputo USA has 13 cheese-making plants in the United States. In 2007 the company was negotiating with Land O'Lakes to acquire the cooperative's West Coast industrial cheese manufacturing business.

The leader in the second largest cheese segment, shredded natural cheese (about 35 percent of total production) is also Kraft Foods with an estimated share of 32 percent in 2004. The second largest producer in that year was Sargento Foods Inc. with a 12 percent share. Sargento was founded by the Gentine family in Plymouth, Wisconsin, a family that still owns the company. Leonard Gentine and Joseph Sartori founded the company by joining forces and their names, but the Gentines bought out the Sartori interest in 1965. Sargento was the first company ever to market shredded cheese and remains a strong presence in that market. The third ranked producer in the market is American Dairy Brands, an element of Dairy Farmers of America, the nation's largest dairy cooperative based in Kansas City, Missouri, but operating nation-wide. Lactalis, Saputo, and Tillamook come in fourth, fifth, and sixth place.

The seventh-place participant in shredded natural cheese, Schreiber Foods Inc., deserves special mention. The company is the second largest manufacturer of cheese in the United States overall but is rarely mentioned because it is predominantly a supplier of the fast food industry and the leading private label cheese producer. In virtually every market share compilation, the "private label" category has the largest share of sales; and the largest share of the private label market belongs to Schreiber. The company was founded in 1945 in Green Bay, Wisconsin. It is a privately held company with sales in excess of $3 billion. As a privately held company, it does not interest those in the media who track the performance of publicly traded entities. Schreiber claims to be the largest privately held cheese company in the world. Schreiber operates globally (in the United States, Europe, Latin America, the Middle East, and Asia). Schreiber also sells its own pro-prietary line of cheese processing equipment.

Although the eleven organizations mentioned above represent a substantial segment of total production (approximately 65%), cheese manufacturing was carried out by 366 companies in 2002, using Census Bureau data, suggesting that the market concentration is relatively low. The 366 companies operated 501 plants in that year; of those, 278 had twenty employees or more and were thus substantial. Company and establishment counts have been declining over time. In 1992, 418 companies operated 576 establishments, 314 of those being large (20 employees or more). Consolidation is thus taking place gradually; in the process, establishments are being closed. Small establishments with fewer than twenty employees have been declining more rapidly than the larger ones. The presence of many small companies, however, implies the presence of a significant wholesale distribution system.

MATERIALS & SUPPLY CHAIN LOGISTICS

Milk is the only bulk ingredient required for cheese manufacturing. Milk production, however, is concentrated in 23 states; they produce 89 percent of all milk. California, Wisconsin, and New York account for 40 percent of all milk production. Not surprisingly, cheese production is heavily concentrated in Wisconsin, on the West Coast, and in the North East. A gallon of milk weighing 8.6 pounds produces about one pound of cheese. Logistics alone dictate that cheese is most economically produced near the occurrence of milk. The transportation costs of one pound of finished product to a distant consumption market is much less than moving the milk.

In the production of processed cheese, the major raw material is natural cheese itself—which is then ground, melted, emulsified, and shaped. Processed cheese operations thus can be located more distantly from milk-producing regions. Processed cheese, requiring controlled atmospheres for optimal production, require the availability of nitrogen gas. Location of such facilities is somewhat influenced by the gas liquefaction plants where, typically, in the production of oxygen from air, nitrogen is also produced for industrial purposes. Oxygen production is normally closely located to centers of steel production, thus in heavy industrial corridors.

DISTRIBUTION CHANNEL

In 2005 some 2,400 dairy product wholesalers distributed dairy products valued at $39 billion. Some portion of that total was cheese, but Census Bureau data, at the wholesale merchant level, are not broken out by kind of product distributed so that precision is not possible—especially in the dairy category where many different types of distribution exist side by side. Two-tier distribution is common in situations where a large producer sells directly to a large grocery chain and the chain, in turn, sells directly to the consumer. The chain may perform a middleman function by buying for regional markets, holding the product in its own warehouses, and distributing the product to stores. A similar process is in place where chains buy private label merchandise; the manufacturer puts the product into packaging designed by the buyer and delivers directly to the chain. Two-tier distribution is also common for cheese products aimed at the fast food industry. The products—cheese slices for cheeseburgers, for instance—are produced under contract for the franchises and delivered directly by the producer. Variations on these patterns are common, and distributors are used, where producer-controlled deliveries are not justified by volume.

Major cooperatives play a large role in the distribution of products. The top dairy cooperatives—Dairy Farmers of America, Land O'Lakes, and Dairylea Cooperative Inc.—are major distributors as well as producers. A number of smaller cooperatives are also active in distribution, an example being Associated Milk Producers Inc. selling products produced by its members in the Upper Midwest. Commercial distributors will frequently have a history of production or be engaged in manufacturing although their principal activity is the distribution of goods on behalf of smaller dairies. Examples are Crystal Farms and Shamrock Foods. Crystal Farms has its own processing facility in Lake Mills, Wisconsin. The Arizona-based Shamrock Foods is a major dairy food distributor but also owns and operates Shamrock Farms.

KEY USERS

Virtually everyone eats cheese. Cheese contains very little milk sugar (lactose) and is therefore better tolerated even by the lactose-intolerant. Although some cheeses have a very sharp taste and a distinct odor, others are very mild and almost sweet. Connoisseurs of cheese may appreciate the sharp tones of strong Cheddar or the pungent aroma of Limburger. On the other end of the spectrum are the mild, soft cheeses offered to children by way of increasing their intake of calcium and protein. Among the most popular of these mild cheeses, marketed around the world and with a particular focus on children, are the Baby Bel and Mini Baby Bel cheeses, one of the La Vache Qui Rit (Laughing Cow) brand of cheeses produced by Fromageries Bel, S.A. Within this vast range of cheeses there is almost certainly one to match every taste.

ADJACENT MARKETS

Cheese is a source of protein in food. There are no direct substitutes for cheese, thus adjacent markets must be considered those that provide products high in protein content. Major sources of protein are animals or animal products, thus eggs, red meat, poultry, and fish—and certain categories of vegetables, principally legumes (peas, beans, and lentils).

In the past the public has consumed expensive foods when it could afford it—and animal proteins have always been more expensive than proteins harvested as plants. Early in the twentieth century, for instance, red meat consumption was limited by income. Late in the twentieth century it was limited by fashions. In the early decades of the century beef consumption was under 60 pounds per capita. Between 1964 and 1987, consumption increased sharply to more than 100 pounds per person—and then dropped again, and has continued to drop, reaching 93 pounds in 2005. In the early 1900s people could not afford to eat expensive meat. In the early years of the twenty-first century they chose not to, in order to avoid fats.

In more recent times, for instance, veal consumption dropped from 2.2 to 0.6 pounds per person between 1985 and 2005, pork consumption (despite the lean-pork movement) dropped in the same period from 66 to 64 pounds, lamb consumption from 1.6 to 1.2 pounds per capita, egg consumption from 216 eggs per person to 175. At the same time chicken consumption grew from 56 to 104 pounds per person, and turkey consumption increased from 12 to nearly 17 pounds per capita, and fish consumption from 9.7 to 11.5 pounds. Poultry and fish have been promoted as healthier sources of protein by health and dietary authorities. So have legumes. Legumes, however, have declined in the 1985 to 2005 period from 7 pounds to 6 pounds per person in consumption. The public appears to prefer meat to vegetables.

These data illustrate that in modern industrial markets, with extensive public communications and high levels of income, food products compete with one another based on rationales in which cost plays a relatively minor role. Cheese has done well in this environment and has grown in consumption.

RESEARCH & DEVELOPMENT

A significant waste product of cheese manufacturing is whey. It occurs as a thin liquid carrying whey proteins and residual amounts of lactose, casein, and butter fat. Whey proteins have come under intense study in the twenty-first century as the industry has been looking for ways to utilize whey. Considerable research is under way to identify precisely the function of whey proteins and to explore their potential in food and in pharmaceutical products. Alongside such rather basic R&D, producers in the industry—very much in parallel with producers in other branches of the dairy industry—have been very active in product development. Efforts are directed toward creating unique new snack products to exploit changes in lifestyle that favor casual eating.

CURRENT TRENDS

As the first decade of the twenty-first century is drawing to a close, the major trend in the cheese industry could be characterized as "steady on." This is a way of saying that the industry is on a path of steady growth established already in the closing decade of the twentieth century. The major, and continuing, uncertainties in the industry relate to milk pricing as the dairy industry continues to adjust to legislative manipulations of the national milk subsidy program initiated in 1996. Consumption of cheese across the board is growing; the public preference for natural (as contrasted to processed) cheese has been in place for more than a decade. The notable increase in share of Hispanic varieties of cheese is directly attributable to changes in the composition of the population—the Hispanic component having shown the most rapid growth between 1990 and 2005 (up 60 percent). Cheese was and continues to be an important ingredient in fast food; nothing indicates a cooling of the public's romance with pizza, burgers, nachos, and tacos. In the food industry generally, efforts continue to increase the share of food purchased in ready-to-eat or ready-to-microwave meals delivered in frozen or refrigerated form. Snacking continues to be a growing market. Cheese plays a role in all of these trends. At the institutional level, slow consolidation of the industry, already visible in the early 1990s, is still taking place, resulting in the elimination of very small producers. But this consolidation is influenced by the continuing dominance and effectiveness of large dairy cooperatives.

Another trend that first emerged midway through the twentieth century still continues strong. It is the production of dairy products aimed at the health-conscious. In the first decade of the 2000s a new aspect of this trend includes policies to avoid milk from herds treated with recombinant bovine somatotropin (rBST), a man-made growth hormone used to increase the milk production of herds. This growth hormone, produced by recombinant DNA techniques, came into use in 1994. The product, named POSILAC, is banned outside the United States for use in cattle, but milk obtained from cows injected with rBST has been found to pose no risk for people; foreign countries buy the milk but will not permit their own cows to be injected with the hormone.

Controversy continues to surround use of this productivity enhancer in the twenty-first century. Cheese makers are sensitive to this issue as they are to all dairy industry trends. The rise in popularity of foods labeled organic is part of the movement to use fewer chemicals in the production of our food, be those hormones used on livestock or industrially produced fertilizers used on crops.

TARGET MARKETS & SEGMENTATION

Cheese producers serve well-defined market segments. The two largest segments are institutional and consumer markets. The food industry itself represents the first major segment. These cheese buyers are companies that use cheese as an ingredient in the preparation of snacks, sauces, and ready-to-eat meals and companies that sell fast food.

The consumer market has different segments represented by three forms of cheese. Pre-sliced products intended for sandwich-making are predominantly processed cheese (Cheddar and Colby). Sliced natural cheeses have made their appearance as well and appear to be growing. The third form of consumer cheese itself includes three types of cheese. The block cheeses are intended to be sliced by the consumer; cream cheeses are intended to be spread by the consumer; and grated and shredded cheeses intended for use in cooking.

Although a major portion of all cheese consumed in the United States falls into two varieties, Cheddar and Mozzarella, cheese by its very nature is targeted at human taste buds so that every conceivable variety has its own segment of customers. In the wake of World War II, faced with the disorders left over from the global conflict, Charles de Gaulle once famously said: "Only peril can bring the French together. One can't impose unity out of the blue on a country that has 265 different kinds of cheese." The same may be said of the world as a whole—with 2,000 varieties. But Charles de Gaulle—had he been thinking more about cheese than unity—might well have added to his comment another famous French phrase. He might have said: "But, as for cheese, vive la difference."

RELATED ASSOCIATIONS & ORGANIZATIONS

American Dairy Association & Dairy Council, Inc., http://www.adadc.com

American Dairy Goat Association, http://adga.org/compare.htm

American Dairy Products Institute, http://www.adpi.org

California Cheese & Butter Association, http://www.cacheeseandbutter.org

International Dairy Foods Association (IDFA), http://www.idfa.org/about/index.cfm

New York State Cheese Manufacturers' Association, http://www.newyorkcheese.org

Wisconsin Cheese Makers Association, http://www.wischeesemakersassn.org

BIBLIOGRAPHY

Agriculture Fact Book 2001–2002. U.S. Department of Agriculture. March 2003.

Dairy Products: 2005 Summary. U.S. Department of Agriculture, National Agricultural Statistics Service. April 2006.

Darnay, Arsen J. and Joyce P. Simkin. Manufacturing & Distribution USA 4th ed. Thomson Gale, 2006, Volume 1, 927-929.

Frankhauser, David B. "Rennet for Making Cheese." University of Cincinnati Clermont College. 14 February 2005. Available from: ?http://biology.clc.uc.edu/fankhauser/Cheese/Rennet/Rennet.html?.

"The Internet's Cheese Information Resource." CheeseNet. Available from ?http://cheesenet.info/default.asp?.

Lazich, Robert S. Market Share Reporter 2007. Thomson Gale, 2007.

"Natural and Processed Cheese." AP-42. Compilation of Air Pollution Emission Factors. U.S. Environmental Protection Agency. January 1995.

Wattiaux, Michel A. "Milk Composition and Nutritional Value." Babcock Institute for International Dairy University of Wisconsin-Madison, Research and Development. Available from: ?http://babcock.cals.wisc.edu/downloads/de/19.en.pdf?.

see also Milk & Butter