There are over 3,000 varieties of cheese available all over the world of which only 40-45 varieties are available in India. As Europe and US markets have saturated, the world is now turning attention to India where production is growing approximately at 15 per cent every year and the market is expected to show double digit growth By Saloni Bhatia
Originally cheese has been popular in Italian cuisine and Indians were introduced to cheese through pizzas and pastas. The rise in fast food chains like Domino’s and Pizza Hut triggered demand for cheese and slowly India has become one of the fastest growing markets in this industry. There has been a surprising increase in the varieties of cheese available over the past years and many new brands have entered the market. Britannia and Amul dominated the market but the past five years have seen a drastic change. International brands like Kraft Cheese, Fromageries Bel and Arla entered the market with rise of domestic brands like Choudhery Cheese, Dairy Craft, Flanders, Acres Wild and Hi Cheese.
According to the Global Agriculture Information Network (GAIN) report cheese production is growing approximately at 15 per cent per annum, in response to the growing demand driven by India’s youth demographic. The Indian cheese market is expected to show double digit growth in the coming years. Urban cheese demand represents 60 per cent of total Indian sales. An interesting fact is that imported cheese represents only a fragment of the market where there are more domestic players. The processed cheese market is once again expected to grow above average Compound Annual Growth Rate (CAGR) that includes products such as slices, cubes and slabs.
Increasing demand
Urban cheese demand constitutes approximately 60 per cent of total Indian sales. Eighty per cent of the total cheese market is processed cheese, which reportedly is mostly used for fast food such as pizzas and burgers. Urban per capita consumption is 700 grams per year while the national average is 200 grams per year. This consumption is much lower than the world average of seven kilogram per year. Chef Sabyasachi Gorai, owner, Lavaash, shares, “Direct cheese consumption is growing at an astounding rate. Where global firms like Kraft have already been successful in the market, domestic players are also doing exceptionally well. The craze for imported cheese is fading with more people resourcing the product locally. I think our domestic cheeses will soon take over the market. I have always preferred cheese from domestic sellers from Kodai, Puducherry and Kolkata because I feel the Indian market is coming up with some fantastic products.”
Parag Milk Foods sells its cheese under the brand name ‘Go’. The company’s cheese plant, located in Manchar, is one of Asia’s largest cheese plants having a production capacity of 40,000 tonnes/ day. It is one of the only two facilities in Asia having UHT technology. Moreover, Parag Milk Foods is one of the largest suppliers of cheese to hotels, restaurants, pizza chains, street food stalls in India. “We are also exporting to 33 countries worldwide including the Middle-East, North Africa and South-East Asia, etc,” mentions Devendra Shah, chairman, Parag Milk Foods.
To broaden its product range under the ‘Go’ cheese brand and penetrate further into the Indian cheese market, Parag Milk Foods has tied-up with German cheese manufacturer Hochland Group and has introduced the latter’s premium category cream cheese product ‘Almette’ into the India market. Parag Milk Foods also plans to tie-up with major e-commerce portals for consumers to buy it online. Shah adds, “Currently, we have launched two variants under Go-Almette and will soon be launching other variants as well. In the future we will be expanding our product portfolio with an increased focus on health and nutrition based products.”
Cheese has also been associated with various health benefits because of its nutritional value. Currently, the market is importing different styles of international and domestic cheese such as chedder, mozarella, parmesan, emmenthal, gouda, ricotta, feta and mascarpone. These are usually used in different forms be it cubes, cheese spread or shredded.
India has not been a cheese consuming nation. However, paneer has been a household product used in curries across Indian kitchens. It was always prepared at homes before the major manufacturers entered the market. The organised cheese production began 30-40 years ago and later processed cheese with various packaging came into the picture.
Artisanal cheese, using traditional craftsmanship, is another form of cheese that has been in demand lately. Mansoor Khan, owner, Acre Wild Farms, producer of artisanal cheese, says, “The demand for artisanal, gourmet cheese has been increasing by the day. Indians by and large like milder cheeses or cheeses that they have heard of. So our gouda, gruyere, cheddar, feta and parmesan do really well. But apart from that they like flavoured cheeses so our soft flavored cheeses like herb and garlic and pepper have become really popular.” Acre Wild Farms encourages artisanal cheese making and there are regular courses for people to learn this traditional form of the process.
The challenges
India is the largest producer of milk and the cheese industry is the most promising segment in terms of business opportunities and direct demand. However, despite the growing demand only 40-45 varieties of cheese are available in the market. Imported cheeses are only used in high end restaurants while some domestic cheeses can be found easily at local shops. Hotels and restaurants have spurred growth in cheese demand, but certain factors like transportation, distribution, storage pose a threat. When it comes to high quality cheese, it becomes difficult to transport to new city markets and modern retail outlets. The truck drivers often turn off refrigeration, which either spoils the product or degrades its quality.
Chef Saby adds to the concern, “ The major setbacks for the industry would be uneven storage and processing facilities. The lack of good quality milk doesn’t result in a good product as well. Cheese entrepreneurs are hopeful this would sort over time so that more varieties are available in the market.”
Godrej Nature’s Basket sells over 30 varieties of cheese through its online and offline channels. Mohit Khattar, managing director, Godrej Nature’s Basket, explains, “The cheese industry has been growing well in general, though the past one year has not seen as much robustness as in the earlier years. We have seen a dramatic increase in the variety of cheese, introduction of new brands and an evolution of consumer tastes as well. Nature’s Basket is known as a destination of some of the finest artisanal cheeses from around the world. Consumers looking for variety beyond what is offered by national brands or those looking to relive what they consumed during their international sojourns, love the wide and high quality offering available at our stores. Our biggest challenge in the last few months has been to ensure consistent availability of some of these imported cheese varieties that our customers are accustomed to.”
He also adds, “There was a time when some very key varieties were only being imported but today there are several manufacturers who are making interesting varieties in India as well. As far as processed cheese is concerned, there are several reputed manufacturers who are doing a good job. Manufacturers of fresh cheese are relatively fewer and also relatively more recent. We as a chain, deal a lot with manufacturers from Europe as well as with a few high quality suppliers from India.”
Majorly the imported cheese is in demand by hotels and restaurants chains. The increased availability of different varieties of cheese matched with growing awareness about the usage can further drive growth for the product. Karandeep and Jasmeet own the latest entrant in the cheese market -Hi-Cheese. Karandeep explains, “It is important for us to spread the awareness about the usages of cheese. It goes beyond pizzas and pastas and culinary chefs in major Indian restaurants are now putting cheese in various dishes. ”
What lies ahead
According to the GAIN report, India’s organised and unorganised milk market size is valued at approximately US$ 70 billion. The estimates show that the retail sales of packaged dairy products in 2014 was US$ 10.2 billion, comprising cheese sales of US$ 244 million. In terms of volume, retail cheese sales were 47,600 tons in 2014 and estimates that total restaurant and hotel cheese purchases were 51,800 tons. Over the past several years, domestic retail sales by volume has increased approximately 13.5 per cent per year. The total cheese production has been growing at least 15 per cent per year and it could continue to show double digit growth in the coming years.
Khattar points out that consumer tastes in India are evolving and as demand for international cuisine rises, the demand for cheese will certainly keep growing. “As of now, offline or retail stores do much better, though one cannot ignore the fast rising contribution of online sales as well,” he states. Talking about the future of the industry, Khan shares, “There is immense potential but there should be people willing to make artisanal cheese in the right spirit and not simply try to make it into a mechanised factory process. We should remember India is a warm country and we need a certain environment to age cheese. Using refrigeration or other cooling methods over months of aging can be prohibitively expensive.”
The industry has grown over the years and will continue to grow, asserts Jasmeet, adding “People hardly knew brands besides Britannia and Amul. Now with emergence of more domestic players everyone has more choices. Private sectors are entering the cheese segment because of the growth opportunity and increase in demand. The coming years shall be beneficial for the industry as a whole.”
The future demand is driven by the country’s young demographic and growing urban middle class. People have become more experimental with food and therefore the chefs are compelled to bring new varieties to the table. People are travelling internationally and coming back with better awareness. They demand better variety due to their exposure to international cuisines. Earlier Indians largely used paneer but now the tables have turned. Cheese spread has replaced butter while shredded cheese is used as topping in several dishes. The increasing cheese styles and modern packaging including slices, cubes and sauces have added people’s interest in the product.
(With inputs from Rituparna Chatterjee)