Prepared by Daniel Keech, James Kirwan, Dilshaad Bundhoo and Damian Maye CCRI, University of Gloucestershire Case Case Study Cheese in the UK (Task 3.5) Study XY (Task 3.5)
Authors – Partner
The research leading to these results has received funding from the European Union’s Seventh Framework Programme for research, technological development and demonstration under grant agreement n° 311778
2014
Contents
Summary ...... 5 1. Introduction ...... 7 1.1 General introduction ...... 7 1.2 National context ...... 7 1.2.1 Historical details ...... 7 1.2.2 Cheese production and consumption ...... 7 1.2.3 Milk supply in the UK ...... 10 2. Context of the case study ...... 13 2.1 Global-local continuum ...... 13 2.2 Selection and revision of cheese types ...... 13 2.3 Global and local issues in the value chain ...... 14 Global (creamery) ...... 14 Local (farmhouse) ...... 15 2.4 Scope of the selected chains ...... 15 2.5 Production and processing of the cheeses ...... 16 2.6 Critical issues ...... 17 3. Research design ...... 18 3.1 Identification of the main research questions ...... 18 3.2 Methods of data collection ...... 18 3.2.1 Phase 1: Analysis of cheese supply chain performance at the production stage ...... 19 3.2.2 Phase 2: Analysis of cheese supply chain performance at the consumption stage ...... 19 3.2.3 Secondary data collection ...... 20 3.2.4 Future stakeholder workshop (WP5) ...... 21 4. Methods ...... 22 4.1 The attributes ...... 22 4.2 The indicators ...... 24 4.3 Data Quality Check ...... 30 5. Results ...... 32 5.1 Farmhouse cheese - Single Gloucester ...... 32 5.2 Farmhouse cheese - Cheddar ...... 46 5.3 Creamery cheese – Cheddar ...... 55 5.4 Consumer Focus Groups ...... 63 5.4.1 Socio-economic and cheese buying profile of focus group participants ...... 64 5.4.2 Consumer cheese buying habits and behaviours ...... 65 5.4.3 Purchasing behaviours and the affordability of cheese ...... 66 5.4.4 Information and communication, including labels and labelling ...... 69 5.4.5 Nutrition ...... 71 5.4.6 Summary ...... 71 5.5 Local food chain retailer perspective (Single Gloucester and Farmhouse Cheddar) ...... 73 www.glamur.eu 2
5.6 Visual comparison of the performance of global and local supply chains, by attribute and indicators ...... 79 5.6.1 Affordability (Economic Dimension) ...... 80 5.6.2 Creation and distribution of added value (Economic Dimension) ...... 83 5.6.3 Information and communication (Social Dimension) ...... 87 5.6.4 Consumer behaviour (Social Dimension) ...... 90 5.6.5 Resource use (Environmental Dimension) ...... 92 5.6.6 Biodiversity (Environmental Dimension) ...... 93 5.6.7 Nutrition (Health Dimension) ...... 95 5.6.8 Animal welfare (Ethical Dimension) ...... 98 6. Discussion ...... 100 6.1 Key performance issues ...... 100 6.2 Methodological observations ...... 103 6.2.1 Introduction ...... 103 6.2.2 Participatory approach ...... 104 6.2.3 Multi-criteria nature of Glamur ...... 104 6.3 Policy ...... 104 6.4 Case study research questions ...... 105 7. Conclusions ...... 108 7.1 Issues in local/global ...... 108 7.2 Contextual influence ...... 109 7.3 Final concluding comments ...... 110 7.3.1 Linking performance to global/local characteristics ...... 110 7.3.2 The importance of 'quality' when assessing performance ...... 110 7.3.3 Qualifying ‘nutritional benefits’ ...... 111 7.3.4 The choice of indicators...... 111 8. References ...... 112
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To be quoted as: Keech, D., Kirwan, J., Bundhoo, D., and Maye, D. (2014) Glamur project: UK Cheese value chain case study. CCRI, University of Gloucestershire.
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Summary
This report, which constitutes deliverable D3.2, presents data relating to the performance of local and global cheese supply chains in the UK. It is one of six pairs-of-pairs of food commodity supply chain studies within Glamur as part of Work Package 3, and has been carried out in close co-operation with our Swiss partners. While this collaboration will extend to a cross-national comparison in WP4, including a more detailed explanation of performance using radar graphics, this report serves to identify distinctions between local and global performance in the UK; performance within this context being assessed according to the five dimensions which underpin Glamur and in relation to the eight attributes of performance that have been mutually agreed with our Swiss partners. The eight agreed attributes are: affordability, creation and distribution of added value, information and communication, consumer behaviour, resource use, biodiversity, nutrition, and animal welfare.
By way of context, there are currently 700 different types of cheese produced in the UK, with a total of about 400,000 tonnes being produced annually. This represents less than 50% of UK cheese consumption levels, although almost 15% of domestic cheese production is exported. The market penetration of cheese is high, with over 98% of UK consumers purchasing at least some cheese. A significant proportion of the cheese eaten in the UK is as a constituent of processed food. Over 55% of national consumption is cheddar, with most of the cheese produced for domestic consumption being made by large-scale industrial processors. A key challenge facing the cheese sector in the UK in the future is how to expand domestic production and consumption, while framing cheese as being part of a healthy lifestyle.
In choosing which chains to study, desk-based reviews suggested that the distinction between global and local cheese supply chains was best described in terms of a continuum. This continuum was based upon issues such as the volume of cheese produced, the proportion of cheese exported, and the degree of mechanisation or industrialisation of the production process. As a result, a key distinction was made between ‘farmhouse producers’ (producers who make less than 50 tonnes of cheese per year) and ‘creamery producers’ (producers who make more than 50 tonnes of cheese per year). The farmhouse scale was represented by two small-scale producers of cheddar, together with two producers of Single Gloucester; whereas the creamery scale was represented by two larger scale cheddar producers. It is important to stress that the research undertaken as part of this WP should be understood as illustrative rather than representative. In other words, the results should not be used to make general statements about the performance of cheese chains per se, but instead to illustrate two key things: firstly, how local and global is characterised within the cheese chain in relation to specific enterprises; and, secondly, how the performance of supply chain actors across the farmhouse-creamery continuum is articulated (via attributes) and measured (via indicators), through comparing and contrasting different types of cheese.
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Some of the key performance differences identified by cheese producers and retailers within this report between the creamery and farmhouse scales, are as follows. • Within the creamery chain, technical and nutritional information is clearly communicated on standardised packaging that is demanded by major retailers in order to conform to regulations and voluntary measures. By contrast, within the farmhouse chain the cheese 'story' tends to be communicated through personal contact with consumers and wholesalers. • Price plays a crucial role in both chains, but tends to reflect competitive positioning in the larger scale creamery chain, compared to the farmhouse scale where it is more about reflecting the costs of production. • There are clear distinctions between the two chains in terms of the perception of the nutritional qualities of cheese. At the larger creamery scale, fat and salt are perceived as nutritional hurdles that are being addressed through technological and practice innovation. By contrast, the farmhouse sector is unwilling to compromise on the traditional production methods of cheeses, suggesting that the qualities of their cheeses are to be enjoyed in moderation and that the idea of cheese as a low cost staple is a more serious threat to nutritional health than the consumption of cheese per se.
Some of the key performance issues identified by consumers in relation to cheese, are as follows. • In terms of global-local distinctions, a key finding is that consumers very often talk about cheese in a general way. There are some distinctions made: local cheeses are more territorially embedded, for example, and often associated through alternative retail sales (farmers’ market or farm shop) and they are often perceived as more expensive. However, consumers generally were not so interested in the production side, including the scale of production. Only informed participants seem to look at the production side in any detail, a feature which was more evident in the rural focus groups. • There are differences between urban and rural consumers that are important to note, including: greater awareness of production practices, animal welfare and milk price challenges in rural participants, the prominence of affordability in urban groups which can determine willingness to support local products and the prominence of price and convenience in urban groups, with taste the key factor in rural groups. • That said, similarities between urban and rural consumer perceptions and behaviours are also notable. For example, consumers with the same household profile tend to behave similarly in terms of purchasing patterns; most consumers perceive cheese to be expensive and artisan cheeses are perceived as more expensive than more commercial cheddars; the issue of trust in the information provided is prominent across the sample, with consumers sceptical about the way information is provided, although trusting of health and safety regulations; all consumers buy at least some cheese from supermarkets; purchasing habits are not driven by environmental motivations; instead, purchasing habits are driven by economic reasoning (affordability) and taste preference. www.glamur.eu 6
1. Introduction 1.1 General introduction This report outlines research findings relating to the performance of UK cheese supply chains. Performance is specifically related to five dimensions, namely economic, social, environmental, health and ethical, in accordance with the structure of GLAMUR. Our findings are based on data gleaned from desk and fieldwork carried out between August and December 2014 by members of the CCRI team. In accordance with the work package structure of GLAMUR, this report on UK cheese supply chains is one half of a national ‘pair of pairs’, with a corresponding report relating to the Swiss cheese supply chain. This report will present results predominantly from the UK, although the research methods outlined were applied in both countries. A comparison between the findings in the two countries will follow in a subsequent report (D4.1, due 30th April 2015).
1.2 National context 1.2.1 Historical details Cheesemaking is a long-practiced method for storing surplus milk (BCB 2010). Localised farmhouse production led to the development of a wide range of cheeses with distinctive characteristics, influenced by an inter-relationship between animal breeds and husbandry, local climate, seasonal factors, geology, and variations in craft practice and recipes (Rance 1988 pp.32-4, Hartley 1954/1999 p.482). Several varieties of high quality cheese were produced in adequate quantities for trading outside the area of production. Some, such as cheddar, have become well-known commercial varieties.
During the Second World War cheesemaking in the UK was centralized and standardized, leading to greater consistency and efficiency through industrial methods of production. However, this development also resulted in fewer cheesemakers resuming farmhouse production after the War. The industrialization and state-intervention in cheese production, which continued until the 1980s and which was linked to EEC accession and the management of post-colonial trade relations (QS Interview 1), severely eroded the distinctiveness and territorial characteristics of many cheeses (Rance 1988, p.53). However, heightened consumer interest in food origin from about the 1990s has helped revive traditional and craft cheeses (QS Interviews 1, 3).
1.2.2 Cheese production and consumption While it is claimed that there are currently 700 UK cheese types (BCB 2010), the production process is more-or-less common: warmed milk is curdled, either via natural bacterial action, or more usually by adding a coagulant, namely rennet or a non-animal equivalent, as well as a bacterial starter culture which begins the cheese-making transformation by converting sugars in the milk into lactic acid. The milk then separates into solid curds and liquid whey. Curds are drained and manipulated until they reach the desired consistency and level of acidity. Salt is added and the curds are pressed or www.glamur.eu 7
shaped in moulds and left to mature. This may typically take 1-12 months, depending on the type of cheese and the maturity desired, and some cheeses are matured for longer. About 400,000 tonnes are produced nationally, of which about a quarter is exported.
The UK currently has around 10,000 milk producers, a reduction of about 60% from a decade ago (DairyCo1), and dairy farming is a sector of agriculture under pressure due to the gap between milk prices and the costs of production2. Dairy farmers market their milk in three main ways: as independent suppliers, through membership of co-operatives, or through contracts with large-scale milk supply companies. Cheese offers the single biggest premium for liquid milk supply (QS interview 1).
The interests of cheesemakers are promoted by a number of commercial and public networks. These include Dairy UK, which represents about 85% of milk producers and processors, the British Cheese Board whose members are cheese producers, and DairyCo which is an environmental and business development service funded by a national levy imposed on dairy farmers.
Cheese is nutritious, concentrating most of the fats, proteins and minerals of the milk from which it is made (Davidson 1999, p. 159). Its ability to keep well in cool conditions, as well as its sensual attractions, make it a valuable and versatile food, evident in an annual per capita consumption of about 11kg in the UK (BCB 2010), or 700,000 tonnes in total. Market penetration is high, with over 98% of UK consumers purchasing cheese (DairyCo3). Over half (55%) the national consumption is represented by cheddar, which uses a quarter of all UK milk for its production (BCB4). The average market price for cheddar is around £6.60/kg5. About 94% of cheese is purchased in the UK from supermarkets (QS Interview 1).
1 http://www.dairyco.org.uk/market-information/farming-data/producer-numbers/uk-producer-numbers/ accessed 28th Jan 2014. 2 For example, see: http://www.bbc.co.uk/news/uk-30200732 accessed 26th November 2014. 3Kantar Worldpanel data for year ending 31st July 2013, cited on DairyCo website http://www.dairyco.org.uk/market-information/dairy-sales-consumption/cheese-market/cheese-market/ accessed 3rd Feb 2014. 4 http://www.britishcheese.com/facts/faqs-31 accessed 14th Jan 2014 5 http://www.britishcheese.com/facts/faqs-31 accessed 14th Jan 2014 www.glamur.eu 8
Figure 1: Predicted domestic consumption, production and self-sufficiency in cheese, millions of tonnes (NFU 2012)
Figure 1, above, foresees a steady level of domestic cheese production, anticipating that UK production will continue to fall short of gradually rising UK consumption demand. The graph masks distinctions in the way that cheese is eaten in the UK, including that a significant proportion of cheese is eaten as a constituent of processed food compared to other European consumers (see Figure 2, below). Figure 2 illustrates the UK’s low overall per capita consumption compared to France, Germany and Italy, and that around a third of UK consumption takes place within the industrial segment.
Figure 2: Per capita cheese consumption (kg) per market segment, selected EU countries, 20116.
6 http://www.thedairysite.com/articles/2875/european-cheese-market accessed 3rd December 2014 www.glamur.eu 9
1.2.3 Milk supply in the UK Most cheese produced for domestic consumption is made by large-scale industrial processors, starting with the supply of liquid milk. The UK is the ninth largest producer of milk in the world, with an annual output of about 14 million tonnes7. The milk sector is currently dominated by four large firms, namely Arla, Dairy Crest, First Milk and Weisman-Müller. Table 1 provides an overview of the market segmentation of these four companies within the UK milk supply chain. Of the four companies, which together account for over 90% of all milk coming to market, only two companies, First Milk and Dairy Crest, produce table cheeses (Arla produces cottage cheese). Mozzarella has become the second most commonly produced cheese in the UK, after cheddar, albeit for use in the catering trade where it is used as a pizza topping (Blundel 2002).
It should be noted that at the time of writing Dairy Crest is in the process of selling its fresh milk dairy business to Weismann-Müller, further consolidating the market share picture for fresh milk presented in the table. Dairy Crest will, however, retain its cheesemaking business, which is the largest in the UK. Furthermore, the commercial challenges facing he cheese industry have been highlighted by First Milk’s request to its members accept delayed supply payments, to ease cash-flow difficulties8.
Table 1 – UK milk sector: the ‘big four’9 Name Business model Principal market Cheese products Arla UK Parent company is Danish- UK own-brand Cottage cheese Swedish farmer owned co-op. supermarket trade UK direct suppliers formed as accounts for 45% of Arla’s Arla Foods Milk Partnership liquid milk production. which has a 3.2% stake in Arla UK Dairy Crest UK plc which emerged from 17% of UK milk Owns Cathedral City10 the disestablishment of the production. 50% of market and Davidstow cheddar state-owned Milk Marketing is in convenience, catering brands Board and doorstep deliveries. First Milk UK farmer owned co-op 14% of UK milk production Owns Lake District Cheddar and Kingdom Cheese company (the latter producing Mozzarella and cottage cheese) Weismann- German company bought out 16% of UK milk production n/a Müller major UK firm Robert Wiseman Dairies in 2012
7 http://www.fao.org/ag/agp/AGPC/doc/Counprof/britain/unitedkingdom.htm#4ruminant accessed 3rd Feb 2014. 8 http://www.bbc.co.uk/news/uk-30771288 accessed 12th Jan 2015. 9 DairyCo (March 2011 – Feb 2012) Company Strategy and Performance Reports. DairyCo, Kenilworth. 10 Cathedral City constitutes 10% of the total UK retail cheese market by value (source Dairy Crest annual report 2013, p. 20) www.glamur.eu 10
The state of the UK milk sector is regarded as uncertain and somewhat volatile in the short-term. Surveys by the NFU in 2010-11 noted that milk prices were around 4ppl below the cost of production11. Media reports in 2014 cited 6ppl swings in supply price from 33ppl in the spring to 27ppl in the autumn, while average production costs are around 30ppl12. Despite these challenges, there is an oversupply of milk at the global level which has a depressive effect on milk prices13, although the diversion of supply into butter and milk powder has helped stabilize prices to some extent. Milk producers, however, benefitted less from these price increases in relation to other types of farmers: in 2011/12 average farm gate prices rose by 11%, while the farm gate milk price rose ‘marginally by 1.2% to 28.4ppl’ (DairyCo 2013). Recent poor weather (for example, extensive flooding in the West Country during the winter of 2013/14) and the on-going accumulation of solid stocks has led to higher milk prices and a 11% rise in production by 2014 in creamery cheddar cheese14.
However, there are noteworthy distinctions between the liquid milk market and the market for milk for cheesemaking, with the latter emerging from a much smaller pool of producers: ‘There are some hotspots, like the North West and the West Midlands where the competition for milk is extreme and some of the big commodity buyers are all having to compete to keep farmers happy and keep the milk pool together; there is less competition in [other areas such as the South West]’ (QS Interview 1).
A policy development in the near future will be the lifting of EU milk production quotas, in 2015. There is a high expectation among farmers and the government that more milk can and should be produced in the UK, with as much as a 20% increase in production anticipated (QS interview 1). Some of the increase is likely to be directed towards cheese production, although in recent years the share of the domestic market captured by UK cheesemakers has declined due to a limited milk supply of the appropriate quality. This means that, currently, rising UK market demand is being lost to sales of imported cheese. Some of those involved in the cheese industry suggests that much of the additional post- quota milk production capacity will need to be geared toward export to satisfy the demand for fresh and curd cheeses, which are commodity products used for onward processing abroad (QS interview 1).
Finally, the ending of production quotas is expected to accelerate the consolidation of European milk production within the northern ‘milk belt’, an area looping from southern Finland through Poland, Germany, and the Benelux countries towards Ireland and
11 http://www.publications.parliament.uk/pa/cm201012/cmselect/cmenvfru/952/95205.htm#note33, citing: NFU, Cost of Milk Production Report April 2010-March 2011 Estimates, February 2011. The report was based on actual costs for April 2009 to March 2010 and projected costs for April 2010 to March 2011 for 809 dairy units provided by independent consultants. The NFU's report compared the estimated cost of production to the farmgate price of in November 2010 (25.94 ppl). The updated average farmgate price for the relevant period (April 2010 to March 2011, obtained from DairyCo) is 25.1 ppl. 12 http://www.bbc.co.uk/news/uk-30200732 accessed 25th November 2014. 13 DairyCo (August 2012) UK Dairy market outlook and milk production forecast. DairyCo, Kenilworth. 14 http://www.dairyco.org.uk/news/news-articles/may-2014/cheese-production-up-but-is-all- calm/#.VA2mbKNku20 www.glamur.eu 11
including the south-western tip of England15. If this prediction proves correct, it will have profound implications for the cheese producers being examined within this report. Firstly, the milk belt consolidation excludes currently important areas of the UK such as Wales and the North-West, largely because milk production is considered more efficient, productive and/or closer to markets in other areas. Secondly, the geographical consolidation of milk production has already become a feature of UK agricultural trends, with an increasingly clear division between west and east in terms of the production of milk and arable crops, respectively (QS Interview 1).
In summary, the current UK production capacity of cheese satisfies little more than 40% of (gradually growing) national demand, while increased milk production output following the abolition of quotas is expected to be directed towards export commodity markets, not necessarily into domestic production.
15 http://www.dairyreporter.com/Markets/Milk-quota-abolition-will-create-North-European-production- belt www.glamur.eu 12
2. Context of the case study 2.1 Global-local continuum In relation to the characterisation of global/local cheese supply chains, desk-based reviews suggest that global/local is best described in terms of a continuum. The following characteristics can be used to situate individual producers along this global-local continuum (which are an adaptation of the four main key-dimensions used to differentiate local from global in the GLAMUR theoretical framework): • Volume of cheese produced • Proportion of cheese exported • Network of milk suppliers (number of and distance of suppliers from the place of cheese production) • Number, range and distance of other input suppliers from the place of cheese production • Degree of mechanisation/industrialisation of production processes • Number of links in the supply chain (from production to final consumer) • Nature of the information available to consumers about the cheeses sold • Number, range and geographical concentration of market outlets.
In relation to these characteristics, some producers are easy to identify as ‘mostly global’ or ‘mostly local’ businesses. Others may be locally embedded in terms of milk supply, for example, but predominantly orientated towards national – or even international – marketing (wholesalers and supermarkets). Supply chains, therefore, inevitably have a degree of hybridity in their geographical make-up.
In the UK quickscan, a key distinction was made between ‘farmhouse producers’ (i.e. producers who make less than 50 tonnes of cheese per year) and ‘creamery producers’ (i.e. producers who make more than 50 tonnes of cheese per year). However, a global / local binary was seen as being less helpful by stakeholders due to the ways that many chains are arranged in practice. This approach is designed to avoid pre-empting local / global distinctions, although in practice many cheesemakers do not sit neatly even within this binary, as will be revealed in Section 5.
2.2 Selection and revision of cheese types Three types of cheese were initially identified along this continuum, from the more farmhouse type to the more creamery type: Singe Gloucester, Stilton and Cheddar.
The reason for initial selection of these cheese types was that between them they include: a) a range of producers from which a selection can be made to cover different volumes of production distributed across the continuum;
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b) both Stilton and cheddar have substantial domestic (including imports, in the case of cheddar) and export markets, while Single Gloucester has a predominantly local production and consumption sphere; c) they were considered likely to illustrate the blurred distinction between both local- global and farmhouse-creamery binaries; d) they are cheeses of rather different but significant territorial qualities; and e) there appeared to be a strong likelihood of research collaboration due to the existence of cheese variety/trade/producer networks at the point of drafting the research plan. We also consulted representatives of the British Cheese Board about our selection plans.
In practice, having justified a sampling strategy and managed to glean a wealth of contextual (descriptor) data from literature and web sources for each of the three cheeses selected, we encountered significant difficulties in securing interviews with some actors. In particular, none of the selected Stilton producers felt able to collaborate due to pressures of time (in the lead up to Christmas, which is their busiest time of year).
Interviews with larger scale cheddar companies also proved to be very difficult to secure despite excellent referrals via industry specialists, partly because of reservations about revealing operational details that might compromise commercial confidentiality, but also (as suggested above) due to commercial changes and pressures within the large-scale milk market. Large-scale retailers were also elusive.
2.3 Global and local issues in the value chain Having justified a more flexible approach to categorizing cheese chains in terms of global-local, it is nevertheless possible to identify a number of general distinctions between cheesemakers who conform to either a mainly farmhouse, or mainly creamery, scale. Global (creamery) In section 1, it was suggested that at the global level the milk market is over-supplied, which causes pressure on prices and volatility in short-term prices. Volatility is a feature of dairy markets, because in times of over-supply milk is ‘stored’ in cheese and butter stocks until the consequent fall in milk supply causes prices to rise. However, increased volatility is evident, being linked to a number of economic trends including the consolidation of dairy firms in both the UK and the EU. Achieving production efficiency is likely to remain a key factor affecting competitiveness in the structure of the national/global sector in both the short- medium-terms. Other factors linked to price include the gradual but continuing fall in the numbers of dairy farmers in the UK, and rises in cheese consumption outside the table cheese segment. Some cheesemakers are responding to this by investing in technologies which use whey, predominantly for onward sale into food manufacturing.
Resource use costs are an area of concern for all cheesemakers, linked to rises in energy prices and costs associated with waste disposal. For large-scale cheesemakers, resource use efficiency is an increasingly important influence on production efficiency. In some www.glamur.eu 14
cases, interview data indicates that reductions in material consumption are linked to retailer-led strategies to reduce packaging.
Consumer interest in nutritional factors, especially the health consequences of eating fats, sugars and salt, have led to an expansion in the production and consumption of low-fat and low-salt cheese equivalents, especially in the cheddar sector. Data from our interviewees suggests a rising market for these products, although they are associated with territorial challenges, which will be discussed in Section 5.
Local (farmhouse) The local/farmhouse sector is no less innovative than the global, albeit in different ways. Because farmhouse producers frequently produce their own milk, much thought is given to how feed costs can be minimized: for example, by closed-system grazing and silage production. Herd nutrition is also a key influence on the quality and composition of the milk used in distinctive territorial farmhouse cheeses and there is evidence that specialist networks are increasingly providing detailed technical advice relating to milk quality, storage and marketing. These networks illustrate the relatively collaborative and expansionary nature of some parts of the farmhouse sector, in relation to the highly competitive and consolidating global scale. However, some farmhouse cheddar producers have gone out of business in recent years following expansions linked to national supermarket contracts (Interview FC1).
On the consumer side, mature and territorial cheeses have enjoyed consumption increases. There has been a growth in the appearance of local cheeses in supermarkets, although consumers also reflect the importance of producer contact via direct sales opportunities such as farmers’ markets. While the relationship with supermarkets exposes some farmhouse producers to the risk of becoming price-takers, PDO designation may be used as a way to protect cheesemaker power positions in the chain. However, there is only scant interest and knowledge about the qualities which PDO status seeks to protect among consumers, leading some cheesemakers to forego the added administrative burden of registration (Interview FC3).
In contrast to global cheesemakers, some farmhouse producers balance the price of their cheese against concerns including quality, market messages, production costs and animal husbandry. In some cases, market supply is regulated, or limited, by the cheesemaker, with regular customers sometimes being offered privileged access to products (Interview FC2). Demand management may also allow them to be selective about which routes to market they choose. In other cases, cheesemakers have attained a level of income and job satisfaction from craft production, which accords with their professional ambitions. Through taking these approaches, they are better able to be price-setters rather than price-takers.
2.4 Scope of the selected chains Creamery-produced cheddar cheese represents the global scale in this case study. Data have been drawn from both primary and secondary sources in relation to two distinct cheese producers, as outlined in table 2 below. www.glamur.eu 15
Table 2: Overview of selected global case studies Creamery Production p.a. Organisational model Marketing cheesemaker CC1 4,000 tonnes Unlimited company Direct CC2 18,000 tonnes Farmer co-op Via third party contract
By contrast, farmhouse producers have been selected from two cheese types, namely Single Gloucester and farmhouse cheddar. As in the case of creamery cheese chains, farmhouse cheese chains vary. However, a number of key distinctions arise from our farmhouse case studies. These are: (i) in each case the cheesemaker has his/her own dairy herd, thereby ensuring full control over their milk supply; (ii) marketing happens through a mixture of direct and indirect channels, with the type of channel having a significant impact on the relative power of the cheesemaker within the chain; and (iii) marketing targets, production ‘philosophy’ and production scale also play an important role in determining a cheesemaker’s market power.
Table 3, below, provides an overview of four farmhouse cheesemakers from which both primary and secondary data has been drawn:
Table 3: Overview of selected local case studies Name Production p.a./(SG) Organisational model Marketing SG1 5 tonnes/(2.5 SG) Limited company Direct SG2 12 tonnes /(6 SG) Limited company Direct FC1 70-90 tonnes Limited company Mixed FC2 190 tonnes Limited company Direct
In Table 3 above, marketing relates to the degree of control over how products come to market, rather than the number/types of market channels. For example, while all four cheesemakers have more than one market channel (farmers’/street markets and farm shop sales), all but FC1 are in direct control of presenting their cheeses to the market. In the case of FC1, some marketing control is delegated to a third party, resulting in a commensurate loss of direct control on the part of the cheesemaker. While further explanation will follow (in Section 5.2), it is possible to graphically indicate the general distinctions relating to each chain according to ETH architypes, with the farmhouse chain generally conforming to archetype 2 and the creamery chain generally conforming to archetype y, as figures m & n below show.
2.5 Production and processing of the cheeses Individual cheesemaker descriptions are presented in Section 5, which also contains production and processing details for each of the cheese types.
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2.6 Critical issues Some summary points emerging from our earlier analyses (WP2, Quickscan and desktop research) include: • UK domestic milk supply of the correct quality is currently satisfies less than 50% of UK cheese consumption levels, although almost 15% of domestic cheese production is exported. Relaxation of the EU milk production quotas in 2015 will have associated consequences, which remain uncertain, but are likely to include increased milk price volatility. • Farmhouse and creamery productions can be distinguished by scale, mechanization and the extent of milk sourcing networks, although distribution and retail chains may overlap, and milk sourcing is, at most, regional in scale, even for the creamery scale. • Voluntary industry and policy initiatives designed to improve the environmental performance of the dairy sector seem irrelevant to smaller-scale producers, mainly due to their limited impact when looked at across the whole chain. Mechanisation clearly produces labour efficiencies, although in some cases industry joint-ventures transferred labour to actors beyond the creamery (Interview CCB). • Although the principal cheese chain networks represent the interests of primary and secondary producers (milk suppliers and cheesemakers), the public-facing messages emerging from the sector are linked to nutrition. A key challenge facing the cheese sector in the UK is how to expand domestic production and consumption while framing cheese as being part of a healthy lifestyle. • Small-scale craft producers, and those producing raw milk or novel cheeses, face lingering consumer suspicion about the food safety of unpasteurised and blue- veined cheese. However, entrepreneurial entry in this market segment seems vibrant, catering principally for epicurean consumers. It is notable that the BCB was keen to contribute to the development of new research on cheese, citing frustration with earlier research that linked cheese consumption with diet-related disease.
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3. Research design
3.1 Identification of the main research questions The methods used to inform this case study report were agreed with our Swiss colleagues in the Spring of 2014, and are set out below. It is important to stress that the research is illustrative rather than representative. In other words, we do not intend to make general statements about the performance of cheese chains per se, but instead to illustrate two key things: firstly, how local and global is characterised within the cheese chain in relation to specific enterprises; and, secondly, how the performance of supply chain actors across the farmhouse-creamery continuum is articulated (via attributes) and measured (via indicators), through comparing and contrasting different types of cheese.
The benefit of this research emphasis is two-fold: firstly it accommodates the challenge of categorizing cheese supply chains as local or global; and secondly it informs the three principal research questions which frame the Glamur project. These are: (i) What are the key food chain performance issues with regard to a local-global comparison? (ii) What are the methodological strengths and weaknesses of a paired national comparative analysis? (iii) What are the specific interactions of the food chains being studied and how can knowledge of these inform policy-making?
Within this cheese case study, the following research questions are pursued: 1. What are the supply chain arrangements for producers across the global-local continuum (which incorporates both ‘farmhouse’ and ‘creamery’ producers) in the UK, including their geography, market concentration and nature of upstream and downstream relations? 2. What key food chain performance issues can be identified from a production perspective (cheese making and dependent upstream supply chain)? 3. What are the main consumer understandings of food chain performance in relation to cheese buying, including affordability issues, the role of information and communication and the importance of the provenance of the cheese they are buying? 4. What consumer behaviours and practices are evident in relation to cheese buying and cooking, including both health and nutritional issues?
3.2 Methods of data collection To help answer these questions, a series of predominantly qualitative research methods were followed to collect primary data for the case study. These were supplemented with secondary data available via public sources, via key stakeholder contacts or from previous studies. Data collection was carried out in two phases, as set out below. www.glamur.eu 18
3.2.1 Phase 1: Analysis of cheese supply chain performance at the production stage
The sampling strategy for the list of interviewees was developed as follows: • First, a desk-based review of cheese-makers was undertaken as an initial sampling strategy to identify different producers (distinguished by volume) on the farmhouse-creamery continuum; • Second, the above was supplemented following consultations with the British Cheese Board, to identify cheesemakers with different global/local supply chain networks.
These steps led to the compilation of a database of 26 cheese producers in the UK. The main purpose of this database was to act as a sampling framework with which to identify cheeses/related supply chains to study. Six producers were then selected from the database for detailed supply chain research. This number represented two producers of farmhouse cheddar, two of creamery-scale cheddar and two of Single Gloucester (farmhouse scale), which between them covered a range of positions on the spectrum of farmhouse-creamery production, with the potential to provide rich data sources with which to generate performance indicators. To encourage cheese producers to take part in this extensive analysis, we offered them the opportunity to receive some direct consumer feedback on their products (via focus groups and a workshop – see Phase 2, below, and WP5).
3.2.2 Phase 2: Analysis of cheese supply chain performance at the consumption stage The second phase of research examined consumer perspectives regarding cheese supply chains. Four consumer focus groups were carried out in October 2014, with each targeting different consumers in terms of their socio-economic profile and place of consumption. Participants were asked the same research questions in each case.
The focus groups were carried out with ‘mainstream’ consumers – two in a rural location and two in an urban location. In the case of two of the FGs, they were held close to where some of the cheese producers are based. Previous consumer work has shown that consumer knowledge about food differs between urban and rural groups.
The socio-economic profile, age and gender of the participants was balanced as far as possible. Before each focus group, respondents were asked to complete a basic 1-page survey, anonymously, to confirm their socio-demographic background and basic information about spending on cheese per week, consumption and purchasing patterns. In addition, survey of buying and cheese eating preferences was carried out among customers at a farmers’ market in Stroud, close to where some of the case study producers are based.
The focus group materials were designed to examine the consumer-related attributes of the cheese supply chain, as listed under Section 3.3, below. This included exploring www.glamur.eu 19
consumer issues about, for example, their choices in relation to available information, their knowledge and behaviour in relation to cheese buying and household use, price, nutritional knowledge about cheese and how this influences purchasing, understandings of localness and globalness, and the role these issue play in cheese consumption choices. Different cheese packaging images were used to prompt discussion around nutrition, territoriality, the authenticity of the marketing message, and so on.
In addition to the two main research phases, other supplementary data collection strategies were used, including short interviews with key knowledge brokers and other actors within the supply chain (British Cheese Board, retailers and wholesalers), as well as desk and web-based reviews/analysis of available data and documents.
3.2.3 Secondary data collection The methods of primary data collection have been outlined above. Sources of secondary data have been used in three ways within the case study. They have: (i) supported the development of a contextual picture of the UK cheese supply chain; (ii) informed the sampling strategy for primary data sources; and (iii) provided specific (descriptor) data for the individual cheesemakers selected for this case study. Four key sources of secondary quantitative and qualitative data are identified below.
DairyCo In the UK, statistics related to the dairy industry, including all aspects of cheese production (including milk production and supply, processing, marketing, and consumer trends) is held by DairyCo. DairyCo is a non-profit organisation funded by milk industry taxation. This means it is funded by, but is independent of government. DairyCo’s remit is to provide information and publicity about the dairy industry in the UK, and to help Dairy Farmers negotiate regulations and become more effective within the marketplace.
British Cheese Board Closer to industry, the British Cheese Board (BCB) is a network of cheesemakers and other industry stakeholders, including retailers and processors, each of which pays a membership fee according to the scale of their operations. Key functions of the BCB are to offer a collective voice for the cheese industry and to inform consumers about eating cheese, such as variety descriptions, recipes and nutritional considerations. The BCB has been an important source of cheese industry secondary (and primary) data.
Dairy Council The Dairy Council is a non-profit organization dedicated to promoting the dairy sector. Established in the 1920s as a milk PR association, the Dairy Council now concentrates on generating data which presents milk and cheese consumption in a positive light. As well as producing its own data, the Dairy Council also commissions scientific research linked to dairy products and health.
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DEFRA (Protected Food Names) Qualitative secondary data, especially descriptions of PDO specifications, have been gleaned from the Department for the Environment, Food and Rural Affairs (Defra).
Other sources of qualitative and quantitative data include the trade, national and local press, published books and academic journals (see references).
3.2.4 Future stakeholder workshop (WP5) As part of WP5, during the spring of 2015, some of the results from the producer analysis and the consumer analysis will be presented to a sub-set of surveyed cheese producers and other supply chain stakeholders. This workshop will be participatory, both offering the chance to discuss findings, but also inviting participants’ feedback on key attributes and indicators’ of performance assessment. Using the information collected it will be possible to complete a supply chain performance matrix as part of the workshop.
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4. Methods In this section we have combined some of the sections outlined in the case study guidance and presented the attributes, indicators, benchmarks and performance scores in a single format – see table 5, below. This includes a final and comprehensive overview of performance attributes, indicators and benchmarks.
4.1 The attributes Section 3.1, above, describes and justifies the sampling strategy used to identify which stakeholders to approach for data collection. However, a key context in this process was the identification and agreement of appropriate performance attributes, which arose from WP2 and from partner discussions in Rome (February 2014). At that meeting, and in subsequent discussions with our case study partners, eight attributes were selected from the matrix in the combined report, to structure the analysis (see table 4, below). Thus, in addition to the justification for producer selection outlined above, another consideration was the potential to reveal data reflecting the performance attributes listed.
Table 4: Selection of attributes used to frame pair-wise case study research Dimension Attribute Short description (adapted: WP2) Economic Affordability Essentially a consumer-oriented perspective, summarised in terms of accessibility to food by middle and lower income consumers Creation and Concerned with looking at how value is created, but also how it is distribution of distributed within the FSC added value Social Information and A dynamic process indicating openness and transparency in the communication supply chain, which induces trust and responsiveness Consumer Encompasses consumer behaviour in relation to their dietary behavior practices or habits Environmental Resource use It concerns the use and management of the flows of available resources through global and local food chains. It has two main elements. The first element concerns resource consumption. The second related element concerns the tools (techniques) used to measure the resource use performance of food chains. Biodiversity Refers to the ability of food supply chains to preserve the stock of natural resources Health Nutrition Principally concerned with the nutritional qualities associated with food in terms of its composition and ability to contribute towards physical health and well-being Ethical Animal welfare The physical and psychological conditions of well-being of the animals involved in food chains
The quickscan reviews completed for global and local cheese supply chains in both the UK and Switzerland highlighted a number of different perspectives. In the UK report, particular attention was given to consumer and nutrition/health-based issues and attributes. Lack of the consumer perspective/data was noted in scoping interviews with UK stakeholders – this was seen as an important omission when it comes to assessing the current and future performance of UK cheese supply chains, including health-related issues, behaviours and practices. The Swiss report, by contrast, identified more producer- www.glamur.eu 22
oriented and land-use based issues. This different emphasis suggested a need for some flexibility in approaches between the two countries.
It is clear from the discussion above that there are some core attributes that are common to both studies, as well as some relatively more peripheral attributes that relate to just one of the two countries. For example, biodiversity is a prominent attribute in Switzerland; conversely, biodiversity is a less prominent attribute in the UK, where instead there is strong policy emphasis on nutrition, which has implications for cheese consumption due to the relatively high salt and fat content of cheese. This issue was not raised as prominently in the Swiss context.
At the end of WP2, 24 performance attributes had been embedded within the multi- performance matrix. In reviewing these, the UK and Swiss teams were able to make suggestions about which of the attributes reflected areas of common interest, and which illustrated particular national emphases. It is clear that milk production plays a special role in emphasising the upstream aspects of supply chain performance in Switzerland. Whereas in the UK, cheesemaking is a way to distinguish, qualify and add value to generic liquid milk in the market, and thus downstream supply chain performances are more prominent. The attributes which were regarded as reflecting common performance interests included:
Affordability, and creation and distribution of added value – food price is a consumer concern in both countries and an economic performance that is crucially affected by supermarkets. The supply chain activities of supermarkets, such as their relationships with suppliers, affect the creation and distribution of added value across the chain. The farmhouse sectors reflect rather different supply chains, where wholesaling still plays an important role. Smaller, craft producers are able to maximize their capture of added value if supply chain links can be by-passed in favour of direct sales.
Information and communication and consumer behavior – consumers in both countries share high levels of interest in provenance, both as an indication of quality and territoriality, and as a way to enact support for national farmers. In addition, many consumers still carry lingering anxieties about food safety, following a range of incidences of poor food chain transparency and traceability. Such concerns are also linked to shifting consumer tastes for cheeses, including, one the one hand, a willingness to try unfamiliar (ie. imported) cheeses, and on the other, figures indicating the increase in cheese consumed within processed foods or when eating out.
Animal welfare is also a key concern among consumers and among milk producers in both countries. Although consumers are not always aware of the details of milk production, but reflect a hope that animals are well treated and properly fed and housed. Farmers claim, on the basis of our interviews, pride and careful attention ensuring their animals avoid stress, illness and discomfort. In cheesemaking, the importance of milk composition is closely related to nutrition, including free access to forage, and breed type, and cows are frequently selectively bred with milk quality as a priority, rather than milk quantity.
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Attributes which underline national differences are resource use, biodiversity and nutrition. In the UK, our limited dataset reflects an informal approach to managing both resource use and biodiversity at cheese and milk production stages. This is partially linked to the initial cost of installing resource use technologies, especially at a time when the dairy industry is experiencing a very difficult period in the UK, and partly to the prevalence of independent (ie. non-co-operative) family farming which leads to incremental, rather than industrial-scale innovation. In the global scale, resource use is prioritized as a commercial, rather than necessarily an environmental performance, which affects production efficiency. In terms of biodiversity, farmer approaches to nature conservation are closely determined by EU agri-environment contracts, while in Switzerland the challenges linked to the loss of Alpine meadows provides a different focus for prioritizing biodiversity.
Lastly, nutrition features as an important production and consumption attribute in the UK. Cheese contains high degree of saturated fat and salt and the global scale has gone to great lengths to suggest healthy consumption levels and to produce lower fat- and salt- containing products. Farmhouse makers, on the contrary, indicate that the availability of low-cost cheese is an encouragement to eat more of it than is ideal and consumers should eat less cheese overall, but enjoy the taste qualities of craft cheese in preference to mass- produced cheeses
In summary, the selection of attributes is partly based on attributes which were felt likely to reveal common performance factors across the two countries, as well as emphasizing different national performance priorities. A consequence, in the UK, our data in relation to resource use and biodiversity is limited, however, including these attributes in our research has provided us with a broader picture of supply chain performance.
4.2 The indicators A number of common indicators were identified by Swiss and UK teams that would enable comparisons to be made both between and within the two countries (see table 5, below). Indicators have been identified, where applicable, for all eight common attributes. The attribute descriptions in the WP2 comparative report (as well as in the UK and Switzerland national WP2 reports) have been used as a source to identify appropriate indicators. Existing defined indicators have also been adapted from existing tools such as the SAFA FAO guidelines, where appropriate.
Table 5, below, provides an overview of the relationship between Glamur supply chain performance dimensions (indicated by the different colour-shading), corresponding attributes and the indicators used to rate performance. Benchmarks of minimum and maximum performance are also given. Thereafter, performance data linked to local and global chains illustrate variations of performance.
It should be noted that table 5 is a simplified version of a more detailed table which gives precise information about how indicators have been justified, as well as providing an overall performance score for both local and global chains. The table will appear in the www.glamur.eu 24
WP4 comparative report and informs diagrammatic illustrations of performance. However, the emphasis in this report, for WP3, is to highlight local and global chain distinctions and to explore the contexts behind these.
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Table 5 – Summary of performance attributes in the CH and UK contexts with their corresponding indicators and scores, including methods of data collection
Dimension Attribute Agreed indicators Benchmark performance B/M Min B/M av. B/M Local Global Data Data Max data data needed source Economic Affordability Influence of price on quantities 25 4 18.25 9.76 Market Internet Price paid for cheese £/kg purchased (£/kg) prices and
interviews Scale of 0 to 4. 0 = perceived 0 4 1 2 Subjective Focus to be: very expensive; 1 = evaluation groups The perception of price by expensive; 2 = neither consumers expensive or good value; 3 = perceived to be good value. 4= very affordable Economic Creation & £10/kg is the indicative 0 4 10 6.65 2.45 Wholesale Interviews distribution of wholesale price of cheese from and milk added value cheesemakers who also price. produce their own milk for cheese production. In this case the price for the most Cheesemaker profit expensive cheese in our case
study range was taken. In other words, this is the max amount of income which a cheesemaker is likely to receive. Proxy: farmer to retailer wholesale price Differences in the share (%) of 0 25 50 M:15% M: 37% Milk, Internet Share of final price value across the final selling price between C:41% C: 31% wholesale and the chain milk producers, cheese makers R: 44% R: 32% and retail interviews
and retailers. prices See note 1 Number of FTE per tonne of 0 0.4 0.365 0.005 No. of Interviews Contribution to the economy of the cheese produced from the FTE/t and region industry minimum to an cheese calculation artisanal cheese factory. 1 0 0.250 0.338 Indicator calculated following Distribution of final price Swiss guidelines. See Swiss explanat’n. Social Information & Scale 0 -1 where 1 signifies 0 3/3 = 1 1 0.6 Subjective Interviews communication satisfactory and 0 is not evaluation and focus Communication along the chain satisfactory. Produce one score groups between each stage to reach total, linked to milk producer,
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cheesemaker, retailer. Information available. Scored 0 6/6 = 1 0.8 0.67 As above. Interviews from 0 to 6 from a sum of the following, score 1 each: Availability of Information website available, personal contact, tastings, newsletter, point of sale information, use of social media. Information in addition to legal 0 5/5 = 1 0.6 0.75 As above. Legal requirements. For each of the requiremen following, score 1: nutrition, ts: cheese Product Labelling ingredients, labelling sourcing/provenance, ethical information and production practices. Social Consumer Qualitative comparisons made N/a N/a As above. Focus behavior Consumer use between different FSCs and groups types of cheeses, in textual form. Taste preference As above. N/a N/a As above. Focus groups Convenience As above. N/a N/a As above. Focus groups As above. N/a N/a As above. Focus Willingness to pay groups Environmental Resource Use Score 1 each (of 5): systematic 0/5 5/5 4 2 Information Interviews soil improvement practices; on practices Soil improvement practices use/absence of mineral followed fertilizer; active pursuit of minimum tillage; systematic PH management; soil sampling. Score 1 each (of 4): renewable 0/4 4/4 4 4 As above. Interviews energy sources installed; Material consumption practices concentrates bought in/avoided; energy saving practices evident; own land used for fodder production Score 1 each (of 4) 0/4 4/4 4 4 As above. Interviews presence/absence of waste Waste reduction and disposal reduction strategy; whey
reclamation; biomass re-use; water re-use practices Number of litres of milk 12 10 8 10 10 As above. BCB and Processing efficiency needed per kg of cheese interviews Environmental Biodiversity Score 1 each (of 4): (4): 0/4 4/4 4 4 As above. Interviews membership of agri-env Landscape conservation plan schemes; presence of buffer zones; habitat management;
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systematic approach to biodiversity Score 1 (of 4): at least 4 crops 0/4 4/4 1 1 As above. Interviews in the rotation (3=0; number to define=1); practice of mixed cropping, agroforestry, Diversity of Production intercropping or crop-livestock; number of breeds in the herd (to define); crops, breeds or trees locally adapted, rare or traditional Health Nutrition Salt content of cheese by - 1.5 0.4 1.74 1.76 Label data See note 2. Salt content percentage weight from the or lab test
most to the least. scores Fat content Fat content of cheese by 49.18 33.33 17.5 35 34 As above. See note 3. percentage weight. Saturated fat Saturated fat as a % of fat 41.67 23.33 5 24.5 21.76 As above. See note 4. content. Calcium content Content of calcium mg/100g. 675 1200 740 739 As above. See note 5. Ethical Animal Welfare Animal stocking density per 3 0.5 1.75 2.8 Information Synchornisa Animal density hectare on practice tion with
CH scale Lifetime of dairy cows Average age of cows in the 3 10.5 8.5 7 As above. Interviews herd (in years) Total time spent on pasture as 0 50 100 62.5 66 As above. Interviews Time spent on pasture or housed % of year Notes: 1. The global scores need to be interpreted with care in that they are based on data from just two cheesemakers, one of which has the strategic objective of limiting its own profits in favour of ensuring a higher farmer milk supply price. 2. 2015 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/300886/2902158_FoP_Nutrition_2014.pdf) 1.7g/100g corresponds to the mean content of salt found via a cross-sectional survey carried out in 2012, including 612 cheeses available in UK supermarkets. "Cheddar and cheddar-style cheese is the most popular/biggest selling cheese in the UK and has the highest number of products in the analysis." (Accessed 20th Jan 2015 http://bmjopen.bmj.com/content/4/8/e005051.full) 3. 33.33% as an industry average for cheddar cheese following Dairy Council document accessed online: http://milk.co.uk/publications/default.aspx This was calculated as follows: cheddar contains about 10g per 30g portion. So every 100g would contain = (10/30), 100=33.33. 17.5% corresponds to the UK government recommendation. (Page 14 accessed 21st January 2015) https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/300886/2902158_FoP_Nutrition_2014.pdf) 4. 5 g/100g corresponds to the UK government recommendations https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/300886/2902158_FoP_Nutrition_2014.pdf 23.33% as an industry average for cheddar cheese following Dairy Council document accessed online 21st January 2015: http://milk.co.uk/publications/default.aspx . This was calculated as follows: cheddar contains about 7g per 30g portion. So every 100g would contain = (7/30)*100=23.33.
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5. The recommended Daily Value for calcium is 1,000 mg for adults and children aged 4 years and older. Foods providing 20% of more of the DV are considered to be high sources of a nutrient, but foods providing lower percentages of the DV also contribute to a healthful diet. http://ndb.nal.usda.gov/ndb/foods/show/9?fg=&man=&lfacet=&format=&count=&max=25&offset=&sort=&qlookup=. Thus, for the minimum benchmark, 675mg/100g has been chosen as it is the standard reference for Cheddar cheese according to the National Nutrient Database for Standard Reference from the National Agricultural Library (USA). http://adlib.everysite.co.uk/adlib/defra/content.aspx?id=000IL3890W.198AWLDOHJ69F3
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4.3 Data Quality Check Section 4.3.2 of the WP3 case study guidance outlines a method for presenting the quality of the data used to inform this report. This is particularly important given the predominantly qualitative methods used for data collection in the UK case study.
The guidance offers a data pedigree matrix method, which assigns numerical scores to the type of data collected in respect of each of the 24 indicators used in the UK cheese case study. The sum of these scores allows researchers to rank their data on an A-E scale, where A represents a quality class range linked to a high level of ‘real’ quality data. E represents a lower ‘real’ quality of data, indicating that data have been collected from lower-tier or unverified sources; the lower the QS score, the higher the quality class.
Table 6 below provides quality classifications for the data used in relation to each of the performance attributes used in the UK case study. Where quality classes are on the boundary of two classes, the lower class has been given.
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Table 6. Quality check of performance data for global/local chains in relation to indicators Attribute Indicator QS A (Global)/ QS B (Local)/ Comments Quality class Quality class Affordability Price paid 1.9/C 0.6/A Influence of price 1.6/C 1.6/C Creation and Gross business profit 2.0/C 0.8/B Representativeness not known as not all stakeholders can give exact details due to commcerial distribution of confidentiality, especially those operating at the global scale. added value Share of final price 1.6/C 1.6/C In both cases, the nature of the supply chain crosses regional boundaries, for example in terms of milk suppliers (global) and market channels (global and local). Contribution to regional 1.8/C 1.8/C economy Information and Communication along the chain 0.8/B 0.8/B communication Availability of information 1.4/B 0.8/B Some global data is not available from primary sources and therefore has attracted a higher score. Product labelling 1.2/B 0.8/B Consumer Consumers’ use 2.8/D 2.8/D Although data in this attribute are based on primary collection, they are so subjective (focus groups) as to behaviour Taste preference 2.8/D 2.8/D be unverifyable, therefore they are scored as unqualified estimates. Convenience 2.8/D 2.8/D Willingness to pay 2.8/D 2.8/D Resource use Soil improvement practices 2.0/C 1.4/B Local data quality is very limited, especially in one case, thus the age of that data is scored as unknown. Material consumption practices 1.2/B 2.2/C Waste reduction and disposal 1.4/B 1.4/B Although these figures are the same for both scales, they are comprised of different sums of scores: local is more closely related to the geographical area; global offers more robust secondary data, rather than estimates. Processing efficiency 1.4/B 1.4/B This is a very difficult indicator to benchmark. Interviews reveal waste efficiency - whey is used one way or another. All cheeses require about 10l milk per kg of cheese. Scoring thus relates only to the type/source of unverified data and the relation it bears to the geographical study area. Biodiversity Landscape management 1.4/B 1.4/B Both scales use/cite the same data for all indicators. It is possible that global scores could be lower simply practices because secondary sources are needed to verify data, but this is more to do with our posession of the Species conservation practices 4.0/E 2.2/C data at this stage, rather than its availability. Diversity of production 4.0/E 1.4/B Locally adapted varieties/breeds 1.8/C 0.8/B Nutrition Salt content 0.8/B 0.8/B Fat content 0.8/B 0.8/B Fat types 0.8/B 0.8/B Calcium content 0.8/B 0.8/B Animal welfare Animal density 1.4/B 0.8/B Lifetime of dairy cows 1.4/B 0.8/B Time spent on pasture or housed 1.4/B 0.8/B
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5. Results This section presents data from both farmhouse and creamery scales. The farmhouse scale is represented by two types of cheese, Single Gloucester and cheddar, with the analysis being based on data from two cheesemakers within each cheese variety (SG1, SG2, FC1 and FC2.) The creamery scale is represented solely by cheddar and informed by two companies (CC1 and CC2). Data from a third farmhouse cheddar maker was used to inform the indicator scores in table 5; however, this producer was not able to offer a full interview and is, therefore, not featured in the case study descriptions.
The results are organized as follows. Sections 5.1 and 5.2 present data related to two types of farmhouse cheeses: Single Gloucester and farmhouse cheddar, respectively. Each section begins with an introduction outlining how the cheese is produced, as well as aspects of both its historical and contemporary market characteristics. Thereafter, systematic descriptions of two cheesemakers from each type of cheese are provided in detail, using attribute and/or indicator headings where data is available, as well as including diagrams of their supply chains. Data are presented in relation to both milk and cheese production. This pattern is followed in Section 5.3 for two creamery cheddar producers. Section 5.4 then reports on the perspectives of consumers, which were accessed via a series of four focus groups. Finally, Section 5.5 provides details of how retailers of varying sizes perceive the cheese supply chains with which they are involved.
5.1 Farmhouse cheese - Single Gloucester Single Gloucester (SG) is a hard, round cheese with a natural rind made with cows' milk. It is usually eaten young and has a mild, fresh taste. It has a Protected Designation of Origin (PDO), which means that its production area is strictly limited to the county of Gloucestershire in England; furthermore, the PDO requires that the milk is sourced from within the county of Gloucestershire and at least some of the herd is traditional Gloucester cattle. SG is currently produced by only six cheese makers, all of whom are small scale. The total production of SG cheese is likely to be in the region of 100 tonnes per annum. Although approximately half of SG cheese is sold outside the county, and a very small percentage exported from the UK, this cheese is predominantly local in its orientation.
The county of Gloucestershire (Wikipedia) Traditionally, SG cheese was made with skimmed milk from the evening milking (with the fat being used to make butter or cream), added to full cream milk from the morning milking. This is distinct from Double Gloucester (DG) cheese, which is produced from the full cream milk of both the evening and morning milkings. DG cheeses, which are larger than SG cheeses and matured for longer, are also coloured with annatto which originally would have been used as a signifier of quality. The smaller size of the SG is a direct result of the skimming process, which reduces the fat and solid contents of the cheese (Rance 1986, p. 68). SG, because it is eaten as quite a young cheese, is also a lactic www.glamur.eu 32
cheese with a quite distinctive flavour from the longer matured and stronger DG. Traditionally, SG cheese would have been made when there was an abundance of milk on the farm. The cream from the evening milk would have been taken to make butter and the remaining milk used to make a mild cheese. It would usually have been kept on the farm or in the local community and not deemed to be of any great financial value. It was sometimes known as 'hay cheese', in that it was often made in the spring and was ready to eat within a couple of months at which time it was taken out into the field at haymaking. After the Second World War, when there weren't so many people making cheeses, its lack of value meant that SG almost died out. In contrast, DG is a hard, mature cheese, with lots of flavour that was always made with the intention of selling it into the towns and cities. As a result, DG cheese ended up being made everywhere, whereas SG was restricted to a very few producers with Gloucestershire.
The modern revival of SG cheese was inspired by a man named Charles Martel, whose original concern was for the near extinction of Gloucester cattle. He was the driving force for the SG PDO in the 1980s, which was in large part intended to provide an economic incentive to keep Gloucester cattle. In this respect, the PDO requirement to have at least some Gloucester cattle in the dairy herd producing milk for SG cheese has been critical, and the numbers of Gloucester cattle have now recovered to some extent.
In order to examine what is distinctive about the performance of the SG supply chain, two of the six SG cheesemakers were examined. This involved in-depth interviews with the cheesemakers themselves, as well as with three of the outlets they sell through. The latter included a farm shop, a delicatessen shop and a motorway service station that also includes a very significant food shop in its offer. In each case, all the milk for the production of cheese came from the cheesemakers’ own dairy herds.
Single Gloucester 1 (SG1) The first of the SG cheesemakers was SG1, who have been making the cheese for 28 years. They are a family business currently involving a husband and wife team, together with one employee from outside the family. The hope is that their children will take on the business in due course. Originally it was the cheese maker's mother who learnt cheesemaking, introducing it as a source of farm diversification and additional income. They produce both SG and DG, in equal quantities. They make cheese twice a week: on Tuesdays they make DG and on Thursdays SG. Each of their cheese-making days involves producing 75 kg of cheese, meaning that their total production of cheese is approximately 5 tonnes per annum, of which approximately 2.5 tonnes is SG.
SG1 cheesemaker in his cool store The business invested in a new cheese house in January 2014. This was mainly to improve the efficiency of the cool store, but also to allow them to increase their capacity to some extent. At present, 15-20% of their annual milk output is for cheesemaking. This produces approximately 50% of their annual income, with www.glamur.eu 33
the remaining 50% coming from milk sales and cattle sales. They are considering producing a blue cheese, but do not want to grow their cheese output significantly for two reasons. First, they are contracted to sell their milk to a large wholesaler, First Milk, who will start to penalise them if they supply less than 800 L a day, thereby reducing the value of their milk sales from the farm. In purely economic terms this may not matter if they are producing more cheese, but it does mean they are then forced to make cheese every day in order to utilise their milk, which is too onerous for their small family business. Second, at present they have no problems selling all the cheese that they produce. If they were to significantly increase their output, this would necessitate greater marketing and time spent selling at farmers' markets and so on, again putting pressure on their family unit and lifestyle.
Selling the cheese In terms of the pricing of their cheeses, the aim is to try to make enough to keep the business viable, "but we've always been of the opinion that we want people to try the cheese. We don't want to stop people buying it and enjoying it. We are probably too old-fashioned and un-business-like… I don't know if it is an ethos or what, but if we are making a living then we don't want to charge more than is necessary". They have a wholesale price, a trade price and a retail price, with approximately 60% being sold wholesale, 20% trade and 20% direct retail, with the latter two outlets being predominantly within Gloucestershire. Over the last 12 months or so, the SG has become more popular with wholesalers, partly because its profile was raised when it won the best traditional British cheese at the British cheesemaking awards, in 2011. At some stage, a small quantity of their SG cheese was exported to North America through the wholesaler Neal's Yard, but recently this has dropped back considerably to only a tiny amount.
Selling direct to consumers makes a better margin for them, but involves more effort and therefore they are keen to balance their outlets. Being a small business, they also don't want to put themselves in a position where they are overly reliant upon one outlet. "It seems to us quite a nice safe balance. We have not got all our eggs in one basket". They are happy with the outlets they supply to, not least because of the personal relationships involved. There is no negotiation as such about the price with either wholesalers or traders, with SG1 simply stating what their prices are. This is a position they are keen to maintain, not least because at their current levels of production they have no problems selling all of their cheese output. Their wholesale and trade price for the SG is £0.40 higher than for the DG, mainly because the SG is more labour intensive to produce. The current retail price for SG is £13.70, while the wholesale price is £11.00.
They sell a small amount of cheese direct from the farm. They also sell to a range of delicatessens in the area, as well as a number of farm shops. They also sell their cheeses in at least eight farmers' markets per month, although he said that sales were down quite significantly compared to two or three years ago. "The people who want the local cheeses, the local food, they are still there. It is the passing trade that is down, because you can buy cheese a lot cheaper if you go to the supermarket".
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The SG1 cheesemaker feels that the PDO protects the SG name, which is of value to Gloucestershire farmers. At the same time, it is clear that very few consumers are aware of SG cheese or of what the PDO designation means. As such, it is not of great commercial value when selling directly to the end consumer; nevertheless, outlets such as delicatessens stock the SG precisely because it does have a PDO which differentiates it from other cheeses.
Once in a shop, he felt that the SG cheese was not competing on price, but on the basis that it is a specialist cheese. Although consumers don't tend to recognise the significance of its PDO status, those shops selling the cheese usually do and promote it as being special in some way. This status may well encourage people to buy the cheese initially, but its inherent qualities will encourage people to come back for a second time. They do have a website, but find that it is not used very much by consumers and it is usually out of date.
They are not organically certified, feeling that it would not add sufficient premium for the amount of work and costs involved. "The cheese gives us a premium anyway and to add enough premium on top of that, is possibly going to make our cheese too much. We consider we are a traditional farm. We don't use huge amounts of fertilisers or pesticides or anything like that. We don't believe in ripping hedges out".
Labelling As a small producer, their labelling obligations are relatively less than larger manufacturers. Their only obligation is to put the name of the product, the EC identification number and, in the case of SG, a PDO stamp on the label; they are not required to include the salt and fat content on the label. He is happy to keep their labelling to a minimum. "Once you start putting more and more information on it, not many people look at that anyway, it just dilutes the important things". And what are the important things? "What the cheese is. Who's made it. That's about it, isn't it (laughing). We know the cheese. We know where it is produced and we say who has produced it. We put the EU producer number on it because that is required".
Organisation membership They are a member of two organisations. Firstly, the Specialist Cheesemakers Association, which is principally a technical and regulatory body for cheesemakers and not involved in the marketing or promotion of cheese at all. Secondly, they are a member of the local tourist board. As part of this, they are in the tourist information guide for Gloucester and the Forest of Dean. This results in a number of visitors to the farm, who are interested in seeing how local cheese is made. He felt it also helped promote SG and DG as part of Gloucestershire's history and cultural identity. They do not have much interaction with other SG cheesemakers, other than a three yearly meeting to ensure that everyone is producing SG to the correct standard.
Supply chain The supply chain for SG1 is notable for supplying the main ingredient -- milk -- from their own herd; nevertheless, there are still a number of ingredients that are sourced from global suppliers, even if they are purchased from local outlets. Waste is minimised in this www.glamur.eu 35
chain, because the main by-product of cheese-making -- whey -- is fed to pigs on the same farm. In terms of marketing outlets, some of the cheese is sold directly to local outlets, with the remainder going to a wholesaler and subsequently to independent retailers. None of the cheese is sold to, or in, supermarkets.
Figure 3: Supply chain for SG1
In terms of the cheesemaking process itself: • Their cheese is not pasteurised. "We believe that it is better for not being pasteurised. The theory being, that if you produce good milk, clean good quality milk, you have got a good product with bacteria and all those living things in it to make cheese. So you are going to make a cheese which has got a huge diversity of flavours and everything in it. If you pasteurise your milk, you kill out any baddies but also the majority of the good bacteria. So you start with a product that is lacking a lot to start with, so you have to use more artificial starters to get the base and then you probably won't have the depths of flavour that you might have with unpasteurised. And that's fine as long as we don't have problems with tB. If we have any inconclusives or any problems with tB, we then have to pasteurise".
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• He uses 10 L of milk per kilogram of cheese for both the DG and SG, although the exact amount depends on both the protein and fat content of the milk, which in turn depends on the time of year. • In terms of fat content, this is set out within the PDO (typically 58% fat in dry matter; 42% moisture of good hygienic quality). The exact percentage varies between batches, partly because of the milk consistency and partly because the cheese is handmade and un-mechanised. • He uses 1 kg of salt to 70 kg of cheese. The salt is critical in terms of drawing moisture out, helping with flavouring and preserving the final cheese. He said that it might be possible to reduce the salt content by a small amount, but anything below 700 g per 70 kg of cheese would potentially create a food safety issue. • Apart from milk and salt, they use a vegetable rennet and commercial starters, both of which are sourced from a local supplier but originally come from France. • By-products and waste from cheese making: "The whey is the main byproduct and that is fed to pigs, so it is not a waste". They don't make any cream or butter. The other waste is washing down water (see below). They only have three sows and a boar, which means that the enterprise is not very profitable, even though 50% of the pigs’ feed is whey. However, they do represent a sustainable way of getting rid of what would otherwise be a waste product. • Each cheesemaking day involves about 75 kg of cheese. At the time the cheese goes into the moulds it will be about 4.2 kg. By the time the cheese is sold, they will weigh about 3.2 kg. The Single Gloucester is matured for 60 days. He has about 240 cheeses in the cold store at any one time, at 3.2 kg/cheese.
The production of milk They farm a total of 130 animals on 37 ha of land, milking 75 cows, of which 16 are Gloucester cows with the remaining cows including Holstein, Brown Swiss and Meuse Rhine Issel. They average 6500-7000 L of milk per cow per year, although the Gloucester cattle are more like 4500-5000 L a year. They don't push their cows for yield, endeavouring to keep their cattle as stressfree as possible. This reduces the incidence of ill-health within the herd, lowering their reliance on antibiotics and improving the fertility of the cows. While the overall UK average number of lactations per dairy cow is approximately 2.5, they average more like 6-7 lactations, with one cow being on her 13th lactation. The average length of a lactation is 12 months.
All the cattle are housed over winter, principally because the ground is too wet for them to stay outside. The cows are kept in kennels and the heifers in a loose yard. The animals are fed a combination of grass silage, hay, straw and brewers grains; in addition, the cows are fed dairy concentrates in the parlour. Generally the cows are out until November and then ideally out again in early April. At the moment (October) they can run into the yard
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overnight to have access to silage as they want, but not to the actual kennels themselves. In the winter, they self-feed at clamp silage.
Relationships within the supply chain In terms of the company that buys their milk, First Milk, he felt that they had no say at all in terms of how much they were going to be paid for the milk they produce. In this respect, they are very much price-takers, with little or no influence. In contrast, he described their relations with the various trade and wholesale cheese buyers as: "Hopefully, quite nice in that we can talk to each other. It's obviously more personal". However, as mentioned above, there is no negotiation on price as such; they simply state what their price is.
Resource use on the farm: "We like to think we are fairly traditional. We'll use farmyard manure and slurry as far as possible on the land. We have a bore hole, which we use for our water needs on the farm. We've invested in solar heating and power in here, because it is a renewable sort of technology that we wanted to try. From the health point of view, we use antibiotics in the cows as necessary, but we try not to use too many. We keep the cattle fairly stress free".
Water use on the farm: "The water usage in here is basically for the hot water and steam to heat the vat. We actually use less now than we used to, because we had this vat made slightly differently so that it doesn't run to waste continually (the vat was new at the same time as the new building)". The vat they use has a jacket into which they pump the water and steam. The power for the steam and hot water comes from a diesel generator outside. The power for the hot water comes from the solar panels for about 85% of the year, with backup from an immersion heater. He felt that overall his resource use was as little as he reasonably can get away with. "We like to think it is relatively low input. From the cheesemaking point of view, it is pretty well all hand work". He felt that it might be 500 L of water per cheesemaking day, by the time the heating and washing-up has been completed. 70-75 kg is on average what they make on a cheesemaking day, and this is two days a week.
Energy use on the farm and for cheesemaking: They contract out the silage making and the bigger jobs, although they do have tractors on the farm. The main energy use is electricricity for cooling and milking, and the tractors use some diesel. They have recently invested in solar PV, which has helped offset some of the electricity in daylight hours, and the new cheese house has improved the efficiency of the cheese storage.
Land management Apart from 2 ha, the whole farm is deemed to be permanent grass. This includes 8 ha of traditional grass which hasn't been improved. What determined that you kept this traditional? "Sentiment, probably (laughing). It is a fairly steep bank that would be ploughable, but it is a traditional field that has lots of daffodils in it. Once you plough it,
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you will lose all that tradition. It makes nice meadow hay and feeds the heifers in the summer".
On average, 50% of the land area is for forage. During the autumn and summer at least 60% of the dairy cow feed is grass, with the rest concentrates. In the winter, it will be all conserved grass and concentrates.
Soil management plan and fertilizer use "We have a soil management plan in terms of where we can spread the manures. We use an oxygenator quite a bit now, which supposedly improves the structure and allows the ground to work better. And I think that has improved the grass growth”. Approximately 50% of their fertilizer needs are through their own manures, with most of the bought in fertilisers being calcified fertilisers.
Landscape conservation scheme membership They are not members of any landscape conservation scheme, because they feel that they farm in a traditional way anyway, and that these schemes usually involve considerable hassle and time to complete all the paperwork, with insufficient financial rewards. "It was going to make very little difference to our finances and very little difference to the farm, or the environment. So that was the main reason why we didn't actually go on to it, it wasn't that I didn't believe in it".
Developments in the coming years "The plan is to make a blue cheese. Hopefully one of the children in a few years will feel the need or the urge, or both, to carry the cheesemaking on. I don't see this farm being viable as a farm in its own right without the cheesemaking. As a small dairy farm, cheesemaking makes it viable. If you got rid of the cheese, the dairy probably wouldn't be viable, certainly not with the way the price of milk is going down. It certainly wouldn't function as an arable farm unless you ripped all the hedges out and changed the whole structure of it. So I see the best option as it remaining a small traditional dairy farm, making cheese. It would be nice to produce a bit more cheese and a bit less to the dairy, but as I explained earlier it is a balancing act to get it just right”.
Health concerns over cheese "It depends on the person for a start. I don't think any food is bad for you. The problem is how you use it. The way we look at cheese, is that it is a good healthy food. It is full of calcium. Good for growing children. Good for bones; older people and that. Osteoporosis is worse nowadays and that may be because people are eating less dairy products. So, I think it is a good food in all ways and means. The problem is, if you have a sedentary lifestyle you can't expect to eat as much as if you have a very active lifestyle. It is the same with any food. If you are not going to utilise it, it is going to cause you health problems".
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Single Gloucester 2 (SG2) The second of the SG cheesemakers, SG2, was prompted to consider cheesemaking when the price of milk dropped below the cost of production in the year 2000. She responded to an advert in Farmers' Weekly for a cheesemaking course, and that is how she started cheesemaking. They produce all their own milk, but the cheesemaking business is kept separate from the farm. The latter is a limited liability partnership which consists of herself and her husband. They also employ four people part-time, all of whom can walk to the business. They make cheese four times a month, using 2500 L of milk each time they do. They use 10 L of milk to make one kilogram of cheese. Their annual production of cheese is 12 tonnes, of which 6 tonnes is Single Gloucester. They charge the same price for all the cheeses they sell, in that the costs of the production are the same in each case.
SG2 Cool store Selling the cheese In terms of pricing their cheese, their average price is £10 a kilogram, although the retail price is almost double that at £18 a kilo. About three quarters of their sales are wholesale. Anyone buying their cheese wholesale pays the same price. When deciding on what price to charge for their cheese, they went round a number of farm shops to see what price other people were selling cheese for and matched this to what they needed in order to make a profit. Her philosophy when dealing with potential wholesale purchasers is: "I'm not going to sell it for any less, so if you don't want it that's fine. It is a handmade product. I'm not going to be dragged into reducing the price to sell more, to stay in the same place". In relation to retail, they have considered putting their prices up, but as the cheesemaker said: "I suppose in a way, we kind of want everybody to enjoy our cheese. So we don't want to make it so ridiculously priced that people can't buy it".
About three quarters of their cheese is sold within 50 miles of the farm. When the business first started they were selling through farmers' markets, which was critical to getting their produce sold and their name better known. The remainder of their produce is sold to a wholesaler who is outside the county, as well as to the high end supermarket chain, Waitrose. They find selling to Waitrose works well for them, but they did also try working with Tesco, which proved to be less successful. She felt that Tesco are not well suited to dealing with small-scale artisan products, not least because they tend to put too many costs back on the supplier.
One element that distinguishes their artisan cheese from some others is that they are able to prepack their cheese. She describes this as the Heineken effect in that they can then "get into shops were other cheeses can't". Although they have a very convincing looking website presence, they sell very little cheese through their website other than £500 worth www.glamur.eu 40
of hampers at Christmas. She felt this was because cheese is physically heavy and difficult to send by post.
They are keen to sell more cheese beyond the local market, as a means of growing the business. "Well, if we could double it, it would be fantastic. I suppose, because myself and my husband are looking in the next 10 years to possibly retire and if nobody actually wants to take the cheese business on, we may need to sell it. So we want to get it into a saleable condition". They have considered exporting their cheese, but felt that they would do better to concentrate on selling throughout England, in the first instance.
In this respect, she feels that the PDO status of the SG cheese is an important marketing tool. Two of their largest current outlets are Waitrose and the new Gloucester services on the M5 motorway, both of whom are selling to people who want to buy a 'bit of Gloucestershire'. In this respect, she felt that through selling at the motorway services they were promoting Gloucestershire cheese to the wide range of people who go through the services. She felt that for sales within the county of Gloucestershire itself the PDO is of less significance; having said that, she felt that it was important to be able to say that the cheese was handmade in Gloucestershire, for all consumers.
In terms of marketing their cheese, they decided that it was not worth being registered organic in that the price of their cheese is already quite high and if they were to become organic it would need to be even higher. In addition, as highlighted under the resource use section, below, they feel they are farming in a way that is already biological, even if they are not certified as such.
Labelling In terms of their labelling, they are currently considering changing them. They originally put them together themselves and now feel that they are too utilitarian. There is no mention of fat content, salt content etc on the labels. She felt that in future they would need to include more nutritional information than at present.
Organisation membership They are a member of two organisations. Firstly, the Specialist Cheesemakers Association, which is principally a technical and regulatory trade body for cheesemakers. They are also members of the Gloucester Cattle Society in order to prove that they do own Gloucester cattle and are therefore able to sell their SG with PDO status. In addition, they are members of the Gloucestershire Grassland Society.
Supply chain The supply chain for SG2 is notable for supplying the main ingredient -- milk -- from their own herd; nevertheless, there are still a number of ingredients that are sourced from global suppliers, even if they are purchased from local outlets. Waste is minimised in this chain, with the whey being spread on the fields. In terms of marketing outlets, some of the cheese is sold directly to local outlets, with the remainder going to two main wholesalers and subsequently to independent retailers, but also to the supermarket, Waitrose, as well as to the relatively large-scale Gloucester Services on the M5 motorway. www.glamur.eu 41
Figure 4: Supply chain for SG2
In terms of the cheesemaking process itself: • 10 L of milk are required to make 1 kg of cheese. They make cheese once a week, or four times a month. This requires 2500 L of milk each time they make cheese, or 10,000 L of milk a month. This represents 10% of the overall milk output from the farm. This results in an annual production of 12 tonnes of cheese, of which 6 tonnes are Single Gloucester. • In terms of salt use, they aim to have 1.5% in the finished product. Less than that and there are food safety issues, more than 2% and it will tend to taste too salty. • Apart from milk and salt, the other key ingredients are starter bacteria and rennet, both of which are sourced from a local supplier but originally come from France or Holland. • Their cheese is pasteurised. "Because we transport the milk here. The milking herd is half a mile along the road. Every time you transport the milk, you are potentially contaminating it. Whereas I think the other people that make SG, they milk the cows there and they make the cheese there. So it is a direct line. So for our own peace of mind, we pasteurise". In terms of adversely affecting the quality of the cheese, she felt that this wasn't the case in that the greatest effect on any cheese is www.glamur.eu 42
the person making it (although she acknowledged that those using unpasteurised milk would disagree with her). • They use whole milk for their cheesemaking "because if you skim the cream off you are actually reducing your yield. So in terms of economics, why skim it off. You have then got to do something with the cream and you are going to get less cheese. So I think of the seven of us who make SG, two do skim it and the others don't. If you skim it, because you have got less fat in it, it tends to be a slightly harder cheese". • Their cheese has a fat content of about 35%. • SG is a younger maturing cheese than DG. It is ready to eat from 12 weeks old, but they tend to wait until 16 weeks.
The production of milk They farm a total of 180 cows plus about 80 followers. The bulk of their herd is Friesian- types, although they also have some Brown Swiss, some Ayrshires, some Dairy Shorthorns and a few Gloucesters. The intention is to have durable animals that will graze grass. They keep a total of only 'half a dozen' Gloucester cattle, solely with the intention of getting them PDO status for the Single Gloucester cheese - "there is nothing philosophical about it (laughing)". They would not do so otherwise, in that they are so low yielding. The average yield of the overall herd is 7500-8000 L per year. The average lactation is just over 365 days, followed by being dry for six weeks.
They use about 1.5 tonnes per cow per year of concentrates and estimate that they get between 3500-4000 L of milk from forage out of an average of 7500-8000 L. In other words, about 50% of the cow's feed needs are from grass. They milk twice a day in a 20:20 herringbone parlour.
They ensure the correct protein content in their milk through their choice of breeds, as well as through not pushing the animals too hard. "So, we do it by feeding and also by going to the more Friesian-types. So, how we feed them and we are not pushing them too much. So you tend to get better butter fats and proteins". "I think we have definitely got a healthier herd because we are not pushing them so hard. I mean, you do get problems. And we do use antibiotics, but we are trying to farm… we are not organic, but we say we are biological". The intention is to get an average of five or six lactations per cow, which is enabled by not pushing them too hard.
The animals are housed over winter because the farm consists of heavy, loamy clay and keeping them out would ruin the grassland. They are housed from around October (although it is sometimes possible to keep them out until November), and they will then come out again in March. They are housed in cubicles and are fed a diet of 60-70% grass and 30% maize. This is fed as clamp silage. They lie on sand. The calves are loose housed until the time they go to the bull, at which time they are then trained to go into the cubicles.
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Relationships within the supply chain She felt that in general her relationships with the various outlets they sell to was very positive. "I think it is because we are local and they are local and they want something that's not in the supermarket, because on the whole it is farm shops. So if we were in the supermarket, they probably wouldn't want us in there. Farm shops have got to have a distinguishing mark from the supermarkets. And we know everybody personally".
They still regularly sell at farmers' markets, where they want to get across: "That we are a local, caring producer; I don't want the labels to make them think we are big boys. And that if you phone up, the chances are you will speak to us. It's not that you will get through to 7 options".
Resource use on the farm: They don't have a resource use management plan as such, but because it is only the two of them involved they do talk about minimising resource use quite frequently. "I think we are as thoughtful and considerate with how we use everything, as we can be".
"We do use antibiotics, but we are trying to farm… we are not organic, but we say we are biological, because the inoculant that we put on the silage is good bacteria and then we are also using an inoculant in the slurry, which is good bacteria, so it starts to break down the slurry and it fixes nitrogen from the atmosphere. So by the time the slurry goes out on the field, it is already partly decomposed. So it is a more readily available form of nitrogen, so then you need less fertiliser". They have been using the bacteria on the slurry for three years and they think they can see an improvement in the grassland. They do still buy in inorganic fertiliser, "but we think that everything starts from the ground. You need a good soil structure and you need to consider how you are treating the ground, to get the best from it rather than just abusing it by chucking fertiliser and sprays on it. You need to be looking towards your soil structure".
Water use on the farm: The farm is on a spring, which provides the drinking water for the cows and is used to cool the milk. Mains water is used to actually wash the plant down. Their usage hasn't altered in recent years.
"We have put a water meter on the cheese room and I was amazed that we use 1 m cubed a month. You know, you are in there washing things down and I thought it would be several metres". In other words, they use 250 L of water per cheesemaking day. "So I don't think there is any way we could reduce the water usage".
Energy use on the farm and for cheesemaking: "We are thinking about putting some solar panels up. The electric is the thing we do use a lot of, because we have got the chillers running all the time". They already have a large PV panel on the farm.
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They of course use diesel for tractors and machinery, which has remained broadly the same in recent years because they use contractors even if they don't do it themselves. However, they are seeking to reduce the amount of work the tractors do. "We are trying not to plough because ploughing does actually use up more energy in terms of tractor diesel. We now simply kill the grass off and go over it with a power harrow, which doesn't use as much energy".
Land management They have a total of 180 acres, with an additional 85 rented acres. They employ a farm manager and three other part-time people who help on the farm. The total milk output from the farm is 1.3 million litres a year, of which 120,000 L goes to cheesemaking. Milk is the only thing sold from the farm. Approximately 10% of the milk goes for cheesemaking, with the bulk of the milk sold to Cotteswold Dairies.
The maize silage they use is brought in. All of their fields are down to grass on a 5-6 year rotation. They use a rye mix, with the intention that the fields are available for both grazing and conservation.
Soil management plan and fertilizer use "We use an inoculant in the slurry, which is good bacteria, so it starts to break down the slurry and it fixes nitrogen from the atmosphere. So by the time the slurry goes out on the field, it is already partly decomposed. So it is a more readily available form of nitrogen, so then you need less fertiliser". They have only been using this for the last three years, but feel that they can already see that it has made a huge difference to the fields it has been spread on.
"And the effluent, because we are a farm, we just pump it back over the fields, and the whey". Have you ever considered having pigs? "Yes, but that is just another job. But at least the goodness is going back on to the fields".
Landscape conservation scheme membership "We do ELS and we planted, we have a small orchard with 27 fruit trees, which are all old varieties, which we planted about seven years ago. We have replanted some hedgerows. We have got two ponds, one of which has been done to try and encourage gold crested newts and the other one for birds. The hedgerows that we have done, it is to, we have a small wood as well, it is to provide a corridor of trees". These schemes have all been done for philosophical rather than commercial reasons.
Developments in the coming years They are hoping to retire within the next 10 years or so. Ideally, they would like one of their children to take the cheesemaking business on, but failing that they want to get the business into a saleable state. This involves considering a doubling of the size of their cheesemaking enterprise, principally through increasing the level of their nationwide sales, rather than being principally focused at the local, county level.
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Health concerns over cheese She was adamant that cheese is a healthy food. "I would say it does have fat, but it also has a lot of calcium, it also has protein and it is the only food that a dentist recommends that you can eat between meals, other than water, because of the acidic effect it has on your teeth. So I think, especially for older people, with osteoporosis, I think it is a valuable source of calcium. It is a valuable source of protein for anybody that is a vegetarian. The fats I believe they are now saying that dairy fat is better for you than they thought. And the salt, you can't make cheese without salt. You can't make cheese without 1.5% salt. So long as you are eating a well-balanced, proper food diet, there is absolutely nothing wrong with the salt in cheese. If you are living on prepared food, where they are wacking the salt in and covering it with sugar, that's what you should be avoiding, not natural foods".
5.2 Farmhouse cheese - Cheddar Cheddar is a large, yellow, hard cheese and the nation’s most popular variety. In 2014, about 55% of the 417,000 tonnes of cheese consumed in the UK was cheddar (DairyCo 2013, BCB 2010). In 2008, 138,000 tonnes of cheddar was imported, principally from Ireland and Australia/New Zealand, while in 2012 almost 7,000 tonnes of cheddar was exported (DairyCo, May 2013). Growing demand for UK cheddar in export markets (up 6.4% and linked by DairyCo (2013) to increased demand from China and other Asian markets with expanding middle classes), has helped to stabilise cheddar prices within an otherwise volatile period for dairy commodities.
Although the cheese is geographically associated with the western counties of England, most notably the Somerset town of Cheddar, it was ‘from the outset made throughout the country and the wider region’ (Rance 1986). A PDO mark distinguishes West Country Farmhouse Cheddar, which restricts the origin of the milk to the four western counties of Cornwall, Devon, Dorset and Somerset.
The technique of cutting and turning the drained curds is called ‘cheddaring’, and its object is to expel as much whey as possible. In farmhouse production, which may use pasteurized or unpasteurized milk, the proportion of salt added to the milled curds is 1kg salt to 45kg of curd (Mason and Brown, p.119). Salted curds are put into cloth-lined moulds and pressed, twice, before the cheese is wrapped in dry muslin and greased, usually with lard, to avoid the rind drying out and cracking. The resultant cylinders are called truckles and weigh around 27kg. Oblong blocks of cheddar of 19kg are made in industrial creameries, using very similar techniques, but are wrapped in plastic film at the end of the pressing process to exclude air. PDO designation is only applied to farmhouse techniques, which include a minimum maturation period of 9 months. Outside the PDO, maturation times of less than 6 months qualify the cheese as mild, mature over 9 months and extra mature over 12 months. Cheddar typically contains 30-40% fat.
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Figure 5: The UK’s best-selling creamery-produced cheddar
Retailers retain a strong position in the supply chain, with current retail margins for mild cheddar reported at 49% - the highest level so far recorded for mild cheddar – and 48% on mature cheddar in 2012/13 (down from 57% in 2003). The cheddar chain remains very price-sensitive and branded (named) cheddar has lost ground to budget and supermarket own-brand varieties. The mild cheddar retail market is closely linked to unbranded varieties, while mature cheddar sales are more closely associated with branded varieties. Retail price stability for cheddar has also been driven by the high supply of cheddar which resulted from a global oversupply of milk in 2012.
Farmhouse Cheddar 1 (FC1) Cheddar has been made at the same family-run dairy since 1962. This family farm has three herds of Fresian cows, one of which supplies milk for the cheddar making. Surplus milk from the two remaining herds is sold to a nearby cheddar creamery. The business employs three full-time and two part-time staff. While production varies month-by-month, production is around 75 tonnes a year. There is a relatively flat pay rate at FC1. Drivers get the minimum wage of £6.50 an hour, while cheesemaking staff earn £10 an hour. In addition, pay increments are awarded according to the length of service.
The firm makes PDO cheddars of varying maturities, predominantly pasteurized – FC1’s director suggests that they are the last pasteurised PDO producer in the county, although they also produce small quantities of unpasteurized cheddar. In the case of the latter, maturation may be 18-24 months with the cheese sold fully-rinded in plasticized paper. Pasteurised farmhouses cheeses, by contrast, have their rinds removed and are packed in clear plastic (if sold from the farm, while packaging varies for the supermarkets, see below). The main constraints on expanding unpasteurized production is the additional paperwork needed in relation to hygiene regulations. Smaller 2kg and 3kg truckles are also made, as well as smoked cheese, blended mild cheddars which contain herbs, and dried fruits or other additives such as garlic. Smoking is carried out locally by a third party.
There are three main influences in relation to the choice of upstream suppliers, which are traceability, reliability and price. Traceability is very important, because it is necessary to be able to keep on top of the paperwork, which has ballooned in recent years. Much of it relates to conformation with hygiene standards and cheese composition.
Selling the cheese Each cheese type has different market channels. ‘The mature and extra tasty cheeses are the two largest sellers, via supermarkets, whilst blended cheeses are mainly sold to local delis and [via street] markets.’ FC1’s director estimates that the three supermarkets which www.glamur.eu 47
the dairy supplies represent at least 60% of sales. In each case the cheese is sold as branded, premium quality cheese, not as supermarket own-brand. FC1 does not deal directly with supermarkets, working instead through a larger cheese producer which also offers a wholesale distribution service. Although this distributor is not based in western England, it has a 25-year association with FC1.
Labelling The director of FC1 reflected that few consumers enquire, or know about, the details behind the PDO designation, although it is displayed on the cheese packet labels. Nor do supermarket buyers prioritise PDO over taste. The reason for persisting with PDO accreditation seems to be habit, although there is merit in sitting within a distinctive cheese class. As well as the PDO label, two other geographical labels are displayed: one that marks the cheese as handmade on the farm, and one that indicates membership of a geographically bounded farmhouse cheesemakers’ association.
Organisation membership Like many craft cheesemakers, FC1 is a member of the Specialist Cheesemakers’ Association. FC1 is also SALSA accredited – Safe and Local Supplier Approval – which covers packaging, nutrition, processing procedures, permitted additives. SALSA is a voluntary food industry audit which assures traceability, hygiene and legal requirements for smaller-scale producers unable to conform to the requirements of the British Retail Consortium accreditation scheme applied by supermarkets.
Supply chain FC1’s input supply chain is geographically diverse and illustrates the hybrid local-global nature of the cheese chain. Blended cheese additives are bought from a local wholesaler, although some ingredients will originate outside the UK (such as apricots). Rennet is used in dried format and is imported from France, while a heritage cheddar starter is supplied by a local specialist. (The same starter is used by FC2, below, which is more distant than FC1 from the producer of the starter. For FC2, therefore the starter is of regional origin). Cattle feed inputs are either produced locally (such as silage), or bought from national suppliers (in the case of feed concentrate). Figure 6, below, gives an illustrative overview of FC1’s supply chain.
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Figure 6: FC1 supply chain
Relationships in the supply chain The distributer negotiates a price with the supermarket, and FC1 is responsible for transporting the cheese to the distributer’s warehouse. Currently, FC1’s cheeses sell at a supermarket retail price of about £17/kilo. The distributor is a secondary wholesaler, taking whole FC1 cheeses and then cutting and packing the pieces of cheeses for onward distribution to supermarkets. Once the distributor has taken a proportion of the purchase price to cover cutting, packing and onward distribution, FC1 receives around £5/kilo for its cheese, although in practice, once off-cuts have been accounted for (and which are used in processing, in other blends, or go to waste), FC1’s director estimates a final return of about £4/kilo via the supermarket chain, or about a quarter of the current retail price.
The margin earned from independent shops is closer to 50% and is handled directly via the FC1 business, and increasingly via the internet. The wholesale price is currently £6.50/kilo with a minimum order quantity of a quarter cheese (£6.75). A second direct marketing channel is farmers’ markets, where there is differential pricing: £10.50/kg for local markets and £17.25/kilo in London, to reflect the additional costs associated with selling in the distant capital. A notable feature about FC1 pricing is that it is flat within the two categories of traditional or blended – neither maturity, nor the relative cost of additives affect the per kilo price.
Falling profitability is also linked to falling output. Eight years ago production was almost double current rates, associated with a supply contract with a major supermarket. www.glamur.eu 49
However, FC1 was displaced by a cheaper, local competitor making PDO cheddar. This competitor has since gone out of business. ‘Supermarket cheese [block cheddar] is getting higher quality, and the firms that make it can produce it at scale, so that is a challenge for us.’
In comparison with the technical requirements of mainstream trading, direct sales, especially farmers’ markets in towns and cities, allow FC1 to expound the details of production and the semantics of the labels, and this remains an important and profitable, albeit subsidiary, market channel. In addition, FC1 has a web-site, which facilitates internet ordering, but this is not regularly updated.
Cheese production process Milk from the farm is pastuerised, left to cool and then heated again before the addition of starters and rennet. Once coagulation is underway, the curds and whey are separated, the curd being cheddared over about two hours, before being salted and pressed. After pressing they are removed from their moulds and left to mature, according to the required strength – mild, mature or extra tasty (‘tasty’ is a synonym for mature). Meanwhile, whey enters a centrifuge and any remaining cream is used in butter production, or sold as dairy cream. Residual whey liquid is fed back to the cows. In terms of the nutritional content of the cheese, its fat content is a little over 30%, of which 70% is saturated fat; and calcium levels are around 740mg/100g, typical for cheddar, whether creamery or farmhouse.
Resource use at the dairy ‘In the past we have made a reasonable profit, but now due to rising costs and selling prices not rising in comparison, we are finding our profit margin squeezed year on year’. Partly, this is linked to the rising costs of resources - water, electricity and diesel - while the price of cheese has not changed’. However, in response to these rising costs, no formal resource use management plans are in operation. This is perhaps linked to the fact that (i) the business produces very little waste (unusable off-cuts are used to feed the pigs of a neighbour) and because (ii) the same production process, technical equipment and energy is used, more-or-less whatever the output’.
Developments in the coming years An unresolved issue for FC1, is succession. Despite its combination of a unique market position, award-winning quality, established and mixed marketing streams, and FC1’s survival in the face of the recent closure of three other PDO West Country cheddar makers, no clear strategy has been made for the retirement of the director and the cheesemaker, both of whom are beyond statutory retirement age. One opportunity is the sale of the business to the nearby creamery, which FC1 currently supplies with milk.
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Health concerns over cheese FC1 represents the position typical of many farmhouse cheddar producers in terms of the nutritional qualities of the cheese: ‘we use predominantly traditional methods as we like to stay true to our origins and believe it provides a superior product… Our cheese is traditionally made, so don’t mess with it!’ No low-fat or low-salt variations are produced and farmhouse makers in our study have all indicated the organoleptic qualities and craftsmanship linked to cheddar production, leaving nutritional concerns to be balanced by consumers.
Farmhouse Cheddar 2 (FC2) Farmhouse cheddar has been produced by FC2 for over 40 years and was started as a way to add value to the milk being produced on the family farm. About 200 tonnes of cheese are produced a year, most of which is cheddar. The firm employs around 24 local people, of which four work part-time, and several of whom live in the village of production in homes owned by the farm estate. Annual turnover is around £2million. The business is formally divided between milk and cheese production (cf. FC1 above). In buying milk from the farm side, the cheesemaking arm uses the milk supply price of one of the ‘big four’ dairy companies (see table 1, above) as a form of ‘tracker’, and adapts it by adding a bonus based on milk composition qualities. In this respect, FC2’s milk supply prices may fluctuate monthly, in parallel with national market prices, but at a higher level compared to the rest of the industry. FC2 is a member of the Specialist Cheesemakers’ Association, Dairy UK and the American Cheese Society.
Selling the cheese The mainstay of production is cheddar, of varying strengths, from mild to mature, extra mature and vintage. A small range of other hard cheeses, such as Double Gloucester, is also produced, as well as a goat’s milk cheese (in the style of cheddar). All cheeses produced are currently pasteurized, in response to the risks linked to bovine TB. Mature cheddar has a wholesale price of just over £9/kg, and retail prices are £14/kg at the farm shop. It represents 50% of sales. Smoked cheddar and goat’s cheese represent 15% each, while extra mature and vintage strengths are 10% of sales. Other territorial cheese and non-cheese dairy products (cream and butter) account for the remaining 10% of sales. The way in which FC2 tries to present its contribution to the construction of place includes making use of ICT. ‘[We admire] the Slow Food concept of investing in the landscape you want to sustain, products that come from a place and have a story behind them.’ Such ‘stories’ can be captured and regularly updated by posting videos of cows on social media along with pictures of the landscape and activities which illustrate countryside management. The importance of protecting a presence in the regional market is reflected in the employment of a promotional worker who attends public events in the south west and provides samples and company promotional information. At the time of interview, FC2 was nearing the completion of a marketing strategy review, including a review of www.glamur.eu 51
branding and undertaking interviews with a variety of clients and staff. This has revealed customer association between the brand and heritage, the winning of awards and the on- farm production that eliminates milk transportation. For the US market (see supply chain section, below), the branding is slightly altered. Although the interviewees indicated the importance of the ‘locavore’ movement in North America, FC2’s locality is not familiar or local to US customers. As a consequence, the high quality of the artisanal, embedded production is emphasized.
Cheese production process As with all cheddars, about 10 litres of milk is required to produce a kilo of cheese. FC2 produces about 200 tonnes of cheese a year from its own herd. All cheeses are cloth bound and produced using the same traditional techniques as outlined for FC1. Cheese fat content is about 35%, calcium content is 740mg/100g and salt content is 2%. Other cows’ milk products include cream and PDO whey butter.
Milk production Milk for traditional cloth-bound cheese production is sourced from the farm’s own herd of just under 300 cows. The herd is ‘closed’ in order to maximize biosecurity. Twice-daily milking is practiced, which provides around 6,000 litres per cow per annum. The average age of the cows is 8-9 years and each cow provides 7 lactations, on average, on a 300- day cycle. Cows are fully fed from farm fodder production and graze outside for 10-12 months a year depending on the weather. The herd is comprised of cows which are the result of gradual hybridisation (cross-varietal breeding), as a way of optimising milk quality for cheesemaking. Milk for the goats’ cheese is not produced on the farm, but is bought in from local suppliers. The fat content of the milk used in cheese production is around 8%, with the protein content in the range of 0.78-0.81%.
Supply chain Although there are some similarities between the supply chains of the two farmhouse cheddar producers, including similar input suppliers, FC2’s chain displays greater complexity and a significant reliance on wholesale market channels as Figure 7, below, suggests.
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Figure 7: Supply chain for FC2
The diagram illustrates, at the top, the range of production inputs used at FC2 and their varied scopes of origin. The regional source of a specialist starter (shared with FC1), makes an important contribution to the market messages of cheese quality, while rennet and salt are generic. In this diagram, farm-based activities are again indicated by dark blue coloration. Direct sales, for example, can be attributed to customers visiting the farm shop or restaurant, and represent less than 10% of overall sales. In addition to direct retail, there are three main channels to market. In the centre, in orange, export accounts for 25-30% of FC2’s sales. Of this, the vast majority is exported to the USA. Smaller export markets are in Singapore, the United Arab Emirates, Japan, Australia and a number of EU countries. Supermarkets account for a fifth of sales. The orange box on the left captures a number of supply chain stages, namely from the farm, via negotiation with a supermarket category manager, to a regional distribution centre and from there to individual stores. Non-supermarket wholesale, in orange on the right, accounts for almost half of FC2’s sales and can be further divided into sub-chains including travel catering (ships and airlines), secondary wholesalers supplying independent regional stores, restaurants and food service (retail catering). www.glamur.eu 53
Labelling A key commercial approach at FC2 is to emphasise the distinctive quality of both the milk and cheese. There are a number of motivations behind this. Firstly, as a family farm, FC2 had initially concentrated on the milk and cheese production aspects of the business. This less strategic approach to marketing resulted in several years of losses, within a highly price-sensitive market for cheddar. Secondly, although the firm qualifies for PDO status, geographical origin per se is not a key marketing message. This is linked to the relative importance of the export market and the promotion of the farm’s individual identity, and that of its family owners. The important message seems to be that FC2’s cheddar is from a beautiful place, which benefits from the careful and positive stewardship of the landscape. The PDO, by contrast, is regarded as embodying rather generic qualities. Thirdly, due to the limited production output, marketing is closely linked to production quality, the complexity of flavour and the husbandry of the land. The market’s access to their restricted quantities of cheddar is prioritized according to the perceived loyalty and commitment of (regular or bulk) buyers.
Relationships within the supply chain In developing market presence linked to the construction of place, it is important for FC2 to be able to source and sell locally, revealed by the importance of the wholesale business. However, local markets are not adequate on their own and export and national markets are required. In summary, FC2 shares with FC1 the position of being commercially embedded at the local level, and being reliant on territorial characteristics linked to production technique, attention to milk quality and superior taste. However, unlike FC1, which has adjusted its output in line with falling demand, FC2 practices demand management in order to protect its market position. A key marketing motivation for FC2 is for ‘our brand and our backyard to be dominated by us’.
Finally, specifically in relation to supermarkets, FC2 tries to strike a balance between the consumer access which such retailers offer, with the risk that their pricing practices cause pressure on farm profitability. In this respect, FC2 cheese prices are not negotiable, and although the proportion of supermarket business is significant, ‘they don’t have too big a role that would put us out of business if they want a price drop’.
Resource use on the farm The firm has no formal resource use strategies. It has installed 50kW capacity of solar panels on building roofs and they are considering installing low-tech water transport systems. Bio-digestion was been considered, but rejected in favour of using slurry for fertilization. The farm employs a systematic breeding regime, which is linked to a grassland management system which maximizes grass production and nutrition. This allows it to carefully match milk composition with the requirements of cheesemaking, and eliminate, as far as possible within the milking herd, the need for supplementary nutrients.
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Developments planned in the coming years There are ambitions to grow, although this is being considered within a context of ‘working out how much [growth] we can sustain, while sustaining the margins’. This also involves intensifying grazing through innovative grass management practices which optimize forage nutrition.
Consideration is also being given to the development of an on-farm food hub, which would provide start-up opportunities and a retail outlet for other local producers and manufacturers.
Health concerns over cheese Interviews revealed a concern that stronger cheddars are gaining popularity among UK consumers. The requirement for an ‘instant [flavor-] hit in their mouth’ contrasts with the more complex flavours that FC2 seeks to characterize its cheeses with. Fat, micro-nutrient and salt content are very similar to other standard cheddars. There are no plans to produce low-fat or low-salt cheeses. The firm’s stance is that people should avoid eating cheese to excess and that the cheeses are highly-flavoured and can be savoured in lower quantities, it is argued, than cheeses with less-developed flavours. Tackling such nutritional challenges through technological innovations is not in keeping with FC2’s approach.
5.3 Creamery cheese – Cheddar
Creamery Cheddar 1 (CC1) CC1 is a privately-owned West Country cheesemaker, which has been pruducing cheddar since the 1940s; before the Second World War it had been run as a small-scale family farm. After changes in ownership, the current incarnation of the creamery emerged in the early 1990s. Today, the company produces between 3,000-4,000 tonnes of cheddar a year and has an annual turnover in the range of £15-20million. The creamery employs 72 staff, the majority of whom are full time and live locally.
Selling the cheese The industrial processes of production, high volume on-site milk storage capacity and the quantity of output, suggest that CC1 can be located within the creamery part of the farmhouse-creamery continuum. Even so, CC1 produces a varied range of cheeses including block cheeses, breed-specific cheeses and a traditional PDO farmhouse cheddar. The vast majority of the firm’s output relates to lower-fat block cheeses which appear as own-branded cheeses in national supermarkets, while the PDO cheeses appear in regional branches of two major national supermarkets. A branded low-fat cheese is also marketed. Marketing is handled directly by the firm (in contrast to CC2, below).
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Around 80% of CC1’s output (up to 3,200 tonnes) is marketed through national supermarkets, 5% (up to 200 tonnes) is sold to food service (catering) companies and the remaining 15% (up to 600 tonnes) are sold to independent retailers based in the West Country. However, a notable distinction for CC1 is that about 90% of its cheese output comprises low-fat cheddar equivalents, providing the firm with an important market specialism. A consequence of producing low-fat cheese (with skimmed milk), which has seen in increase in consumer interest in recent years, is that cream is a major by-product of CC1’s operation, marketed as branded clotted and own-label supermarket cream, through the same channels as cheese sales. Branded butter is also marketed regionally.
Labelling CC1’s director suggests that farmer welfare is an important consideration for many consumers and CC1 makes efforts to inform customers about its supplying farms, for example via its website. Images of supplying farmers will appear on branded products from 2015. Farmers who supply CC1 with milk are also consulted on branding decisions.
The PDO is valued by CC1 as an important quality device that signifies territorial integrity, even though its ability to attract price sensitive consumers is limited. The firm, nevertheless, persists with PDO accreditation, perceiving a gradual movement in the consumer market in favour of territorial cheeses. This is especially the case for export sales to the European continent, which have been rising, and CC1 makes what it describes as ‘blatant use’ of symbols which ‘sell the image of the West Country’, including the PDO. However, despite this optimism, PDO labelling currently remains an added cost rather than an added value.
It is noteworthy that most of CC1’s export is facilitated via its supermarket supply relationships. One deep-discounter which buys CC1 cheeses markets these within its EU networks, as well small quantities to North America. Thus some supermarkets are beginning to act as secondary wholesalers for this UK cheese.
Supply chain CC1’s position as a mid-scale producer with a regional presence is reflected in its sourcing strategy: starters and salt are purchased from national and global specialists, while milk comes from 31 producers – regular suppliers – in two West Country counties.
Milk supply contracts are linked to milk solids content. CC1’s milk supply price is calculated by benchmarking against five other regional cheesemakers on a quarterly basis, and then fixing the price within the upper quartile of that range.
CC1 thus currently appears to be in a positive but precarious position: the firm has been a pioneer in the production of specialist low-fat cheeses that are responding to consumer concerns about health, while succeeding in reaching mass markets via supermarket distribution. On the other hand, while paying milk suppliers in line with upper-end average range market prices, CC1 is left, as a consequence of its low-fat specialism, with cream products which are more subject to price volatility in an unbranded commodity market www.glamur.eu 56
which is currently in global surplus. Furthermore, as consumer demand for low-fat hard cheese increases, so too will competition from larger-scale producers with more efficient cost-production rations.
A simplified supply chain diagram of CC1 is given below, in Figure 8.
Figure 8: Supply chain for CC1
Over the last five years, investments have supported staff training and equipment purchase, and especially the development of in-house packaging; all of these investments have been made to support growth. Being able to control a wide range of operational activities ‘under one roof’ has improved efficiency and aspects of supply chain control: the milk is collected directly from farms, produced, as well as being packed and ripened on CC1 premises, which also contain a dairy shop and café for visitors.
CC1 has a rather linear supply chain (and one less compex than both farmhouse chains featured above), drawing in global, national and local inputs, and directly marketing its products into two retail chains and a catering trade.
Cheesemaking process Although it produces much more cheddar compared to the farmhouse makers within this research CC1 is, nevertheless, a relatively small creamery. Its production of PDO farmhouse cheddar means that it blends farmhouse and creamery techniques, such as hand-turning curds, while block cheeses are shrink-wrapped in plastic. Cheeses are matured for between 3 and 18 months, depending on the maturity grade. www.glamur.eu 57
As suggested, cream is a major by-product of CC1’s specialisation in lower-fat cheeses, which is also marketed, both as own-brand supermarket cream and branded clotted cream. Branded butter is produced from the whey.
Milk production CC1 sources its milk from 31 local suppliers, all of which are family farms. Within the course of this research, one of these suppliers was interviewed, who has a herd comprised of 275 cows, each of which produces 4,900 litres a year, or 1,347,500 litres in total, resulting in a turnover of slightly over £500,000 p.a. The average lactation period is 285 days, with a cow providing an average of six lactations in her productive life. The current average age of cows in the herd is about 3.5 years. Cows are milked for 10 months a year. In addition to grass, cows are fed cake, silage/wholecrop silage, hay and fodder beet during the winter and in dry summers. Cattle are housed from the end of November until mid-February each year. The average fat/protein content of the milk from the farm is 5%/3.8%.
Relationships in the supply chain The firm insists that the relationship with its suppliers is a high priority and CC1was one of the first cheesemakers in the industry to adopt the Dairy Supply Code of Practice, which sets out guidance in relation to fair supply prices. All supplier farms are compliant with national Farm Assurance standards. Interview data emphasised an intrinsic sympathy for dairy farmers, not least CC1 was historically a farm-based business with its own herds. A positive working relationship with suppliers helps persuade producers to maximise the cheesemaking qualities of their milk; this extends to CC1-arranged quarterly meetings for farmers, which include speakers who provide advice on feed, fertility and agronomy.
The importance of cream within CC1’s production process also exposes the creamery to price fluctuations in that wholesale market, in addition to the cheddar market. As a relatively small creamery, CC1 remains a price-taker who is reliant on supermarkets. However, CC1 commands a valuable niche position as a pioneer in lower fat cheese marketing, as well as being a mid-scale PDO cheddar producer. The volatility of the supermarket sector described in the case of FH1 is somewhat compensated for CC1 by the ability to access greater volumes of customers through the multiple retailers.
Resource use CC1’s resource use practices are significantly driven by the package re-use policies imposed by supermarkets on their suppliers. While CC1 has no formal written resource use strategy, the reduction of energy consumption is an important efficiency and cost consideration. The firm draws its own borehole water, reusing as much as possible for washing, and uses biomass and heat-exchange energy generation techniques.
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Developments in coming years CC1’s market position is distinguished by its specialisation in health-related product innovation, alongside its ability to offer territorial and traditional authenticity through mass markets. A risk exists that its market niche will become occupied by larger competitors, whose increasingly global dealings and scale of production advantages will eventually allow them to undercut CC1’s market prices. CC1 regards its main advantage as being ‘nimble’ and thus more quickly able to occupy market niches as a pioneer, thereby staying ahead of market trends, as well as retaining the flexibility to enter complex and hybrid markets more quickly than larger competitors. Increasing levels of branded (value-added) sales in both retail and catering remains a short-term priority.
Health concerns over cheese CC1’s low-fat specialism has been described. Salt content in standard cheeses is around 1.7-1.9%, which is the industry standard for cheddar. However, a low-salt cheese, launched was launched in 2013 after a four-year development process, working in partnership with a major international chemical company. The cheese contains a potassium substitute as well as a flavour enhancer, offering a product with 30% less salt than standard cheddar. The entire production output of this cheese is supplied to food service. Sales are growing slowly and this development has attracted an industry innovation award.
Creamery Cheddar 2 (CC2) CC2 is a distinctive cheesemaking business in a highly consolidated domestic bulk-cheddar market. This creates some challenges linked to the protection of its anonymity. Because of this, some details of the company’s operation need to be generalised. The creamery CC2 was initially a family-run concern until it became subsumed within the state-run Milk Marketing Board (MMB), under which it was substantially expanded and upgraded in the 1970s. After MMB privatisation, CC2 moved into the ownership of one of the four large- scale UK dairy concerns (see table 1 above), and is one of two large regional creameries operated by this dairy concern. Around 80 staff are employed at the CC2creamery plant, which is about the same number as employed at CC1, above).
Selling the cheese A particular feature of CC2 is that it markets all its cheeses and cream under contract to a third party. This allows it to concentrate its resources and energies on efficient production via a relatively small staff. ‘[D]ue to the high level of mechanization at the dairy, a single member of staff can supervise the production of an entire vat of milk from pasteurisation to block formation and whey processing’. A second distinctive feature of CC2 is that its organizational model requires it to divert profits as far as possible into supporting its suppliers. Thus the creamery plant needs to operate at a level whereby it can cover the costs of cheese production as well as plant-related strategic costs, such as recent investments in whey processing technology. The cost recovery requirement is £50 per tonne
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of cheddar, which has a wholesale price of £2,500 per tonne. In fact, ‘income from [whey permeate] and whey cream can normally cover the operating costs of the creamery’.
The main market channels include the supply of all unbranded cheddar to one major UK supermarket, as well as branded cheddar to at least three others, as well as to catering suppliers who take cheese in 25kg blocks for further cutting or grating.
Labelling A number of well known branded cheddars are produced at CC2, as well as cheeses which become packed as supermarket own-brands. None of these cheddars qualifies under PDO criteria.
On their labels, some cheeses produced at CC2 are clearly identfied with the locality of production, even where the cheeses in question have diverse historical origins - cheddar, Double Gloucester and Red Leicester (cf. cheese production below). The rationale behind such locality labelling lies not in the integrity of the cheese provenance, but rather that milk from the cheese has been drawn from a particular region. In practice this region is flexibly interpreted, depending on the seasonal availability of milk.
Supply chain The marketing arrangements for CC2 cheddar require a long period of forward planning, given the time it takes to mature cheddar cheese. Once cheese is produced at CC2, it is transported to a maturation depot in a neighbouring region. This depot is run by another third party firm, with CC2, the maturation firm and the marketing firm all being involved in the joint monitoring of the cheese maturation process. Once maturation has been agreed, CC2 ownership of the cheese is transferred to the marketing company, and physically transferred to its distribution depot in a neighbouring county.
A significant by-product of the production process is whey. After the initial separation of curds and whey in the cheesemaking process, further residual cream is separated from the whey and is usually sold by the tanker-load to confectionery companies and other food manufacturers who are producing butter or butter-oil. Any remaining whey is used in the manufacture of whey protein concentrate, which is used as a health and fitness food supplement, as well as whey permeate, which is used in food manufacturing as a source of lactose/sugars. Whey permeate is a very low-value product and loses much of its value if it has to be transported, so that the concentration process offers a significant efficiency gain. Unmarketed whey may also, finally, be put into anaerobic digesters at the CC2 plant.
Figure 9, below, gives an overview of the supply chain for CC2.
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Figure 9: Supply chain for CC2
Cheese production process CC2 produces up to 22,000 tonnes of cheese a year, of which about a fifth is branded. Most of the rest is cheddar of varying maturities supplied as own-brand products into leading UK supermarkets. Other unbranded products include Red Leicester and Double Gloucester cheeses, which are territorial cheeses at one level, but which at CC2 are produced as ‘really just coloured cheddar with a different starter’. Curd cheeses and a range of whey products complete the product range.
Milk production CC2 sources around 210 million litres of milk a year, predominantly from about 230 local and regional farmers producing, on average, around 900,000 litres each. An important feature of this milk supply pool is that it is seasonal, compared to the more consistent liquid milk market. In cheesemaking, much more milk is available at the required quality in spring compared to other times of the year. To balance this seasonal variation, a collaboration exists between three major UK milk supply companies which have dairy plants in the region, in order to ‘put more milk in the spring peak and strip milk out in the autumn’. Thus milk supplies may be drawn from areas beyond those in which CC2- contracted farmers are situated.
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All supplying farmers are affiliated to the UK’s Farm Assurance scheme. Literature relating to CC2’s sustainability programme is available on-line and covers practices such as cow and calf management; forage; and wider aspects of farm management.
As in the case of CC1, one milk supplier to the CC2 chain was interviewed. This family farm produces milk from a herd of 145 Friesian-Jersey cross-breed cows. It is a closed here in order to help protect biosecurity. The farmer aims to improve milk solid content and to achieve longevity in their milking cows. Previous experiments at keeping highly productive Holstein cattle were revised, mainly due to the poor life-expectancy of the breed. The cows are mainly grass-fed, supplemented by farm-produced silage. However, straw bedding, hay and feed concentrates are bought in as supplements, as required, with supplementary feeding of about 6kg of concentrate stimulating the production of around 35-40 litres of milk. First calving is at 2 years, with a calving index of 396 days. Most cows are in their 5th and 6th lactations, with the oldest cows being in their 8th. The cows of this CC2 supplier are more productive than those at CC1, producing around 6,200kg of milk (around 6,400 litres) per year. Fat content is 4.3% and protein content is 3.4%. Depending on the weather, the cows are housed from mid-October until March.
All manures produced on the farm are used to improve soil hummus and are applied as a fertiliser, supplemented with bought-in urea (nitrogen). The farm regularly carries out soil tests to measure potash, nitrogen and phosphorous levels. Firtilisation is avoided in environmentally sensitive areas, such as those containing water courses or those covered by agri-environment agreements (c. 10 ha). The farmer reports careful management of hedgerows, and the development of arable regimes that support breeding birds. There are several rare species, including otters (Lutra lutra) and red squirrels (Sciurus vulgaris) on the farm.
Three-quarters of the farm’s income is linked to the cheese supply chain, with the farmer seeing CC2 as a ‘fair and honest’ supply chain partner. However, milk prices have fallen from 34.5ppl last summer, to around 30ppl now and are expected to fall another 5ppl. The main strategy for coping with this drop in prices is to improve resource use efficiency, which includes reducing the electricity demands of milk cooling by installing milk pipe coolers, and investing in solar panels which should return a profit within four years. Other ways to compensate for the loss of milk income include improving and expanding farm tourism and lamb production.
Supply chain relationships The arrangements with its third party marketing company are regarded as mutually beneficial in that CC2 has negotiated a profitable business arrangement that offers exposure to mass consumer markets, while the marketing company has secured a competitively-priced cheese supply over an extended contract period.
However, it is notable that the supply arrangements described are not exclusive and ‘[we] may market our cheese independently, albeit within export markets’. Within the contracted partnership, ‘[a] risk exists if [the marketing company] fails to make a return on [CC2-produced] cheeses, then the relationship with them won’t work. The state of the www.glamur.eu 62
market over the past 12-18 months has in fact put pressure on [the marketing company]. This is partly because of the low margins in own-brand bulk supply, but also due to the global oversupply of milk.’
Resource use CC2 has a strategic resource use plan and has recently invested in new gas-fired boilers for pastuerisation and temperature control. In addition to practices which re-use water, most other resource use strategies are related to the processing of whey. For example, at the time of interview, the installation of anaerobic digestion was being explored with a view to producting enough energy to finance whey processing costs from sales to the national grid. Additionally, new membrane-based technology enables a 90% saving in energy costs in whey permate production, which had previously used heat-based drying techniques. The installation of membrane technology was financed through a multi-million pound joint venture with a non-UK dairy company. CC2 also operates a waste management strategy, and no waste from the creamery enters the landfill system.
Developments in the future CC2 will shortly carry out a re-launch of its branded cheese and the interviewee indictated the importance of adding value to branded products, thereby making best use of the company’s processing assets. There is also interest in the further development of high protein products such as (non-cheddar) low-fat and whey products.
Health concerns over cheese Standard cheddar produced at CC2 has a fat content of 35% and 2% salt. However, another creamery owned by CC2’s parent company produces mainly low-fat equivalents within its annual 27,000 tonne output. These cheeses are not included in this commentary, beyond illustrating the separation of the two chains which optimizes standardization and efficiency. CC2 has carried out research into the development of a low-salt cheese, but outstanding issues relating to spoilage affected by salt reduction have not yet been satisfactorily resolved.
5.4 Consumer Focus Groups This section of the report summarises key findings from the consumer focus groups. The analysis relates to the following attributes: consumer behaviour, affordability, information and communication; and nutrition. The analysis is structured as follows: first, an overview of focus group participants, in terms of socio-economic profile, is provided; second, analysis of their cheese buying habits, practices and behaviours is reviewed; third, analysis of factors influencing food purchasing, including affordability, are analysed; fourth, we examine consumer attitudes and reactions to cheese labels and promotional information; and fifth, we review consumer findings related to nutrition. These data are qualitative and provide insights into consumer understandings of global and local cheese supply chains and their performance.
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5.4.1 Socio-economic and cheese buying profile of focus group participants Table 7 provides an overview of consumer participants who took part in the focus groups. As noted in the methods and survey design section of the report, the intention was to recruit a cross-section of consumer participants in terms of socio-economic profile to provide a diversity of perspectives and behaviours. The second key criterion was to run two urban and two rural focus groups to again provide different and potentially contrasting perspectives.
Table 7: Socio-economic profile of consumer focus group participants
Focus Group Household Composition Retail Outlet attendance frequency Total annual Particpant Demographic Gender Age Group Employment status household coded Number category income/£ Number name Farmers' market or of Total Supermarkets of Adults other specialist shop Children F 46-65 Working full-time >40000 1 0 1 URFC101 C1 regular regular F <25 Working full-time >40000 2 0 2 URFC102 C1 regular 0 F >65 Retired 10000-20000 1 0 1 URFB03 B regular occasional F >65 Retired <10000 1 0 1 URFC104 C1 regular 0 M 25-45 Working full-time >40000 2 2 4 URMC101 C1 regular occasional M 25-45 Working full-time >40000 2 2 4 URMC202 C2 regular 0 M 46-65 Working full-time 20001-40000 2 3 5 URMB03 B regular occasional
Urban_Bristol FG1_14102014 M <25 Working full-time 20001-40000 2 0 2 URMC204 C2 regular occasional
F 25-45 Working full-time 20001-40000 1 0 1 URFC105 C1 regular 0 F 25-45 Looking after family >40000 2 2 4 URFD06 D regular frequent F 46-65 Working full-time >40000 4 0 4 URFB07 B regular occasional F 46-65 Working full-time 10000-20000 1 0 1 URFC208 C2 frequent occasional M <25 Working full-time 20001-40000 1 0 1 URMC105 C1 regular occasional M 25-45 Working full-time >40000 1 0 1 URMB06 B regular occasional M 46-65 Working full-time 10000-20000 2 2 4 URMC107 C1 regular occasional
Urban_Bristol FG2_14102014 M 46-65 Working full-time >40000 2 0 2 URMC208 C2 regular occasional
F 25-45 Working part-time 20001-40000 2 1 3 RUFC101 C1 regular occasional F 25-45 Working full-time 20001-40000 2 0 2 RUFC102 C1 regular frequent F 25-45 Working full-time >40000 2 4 6 RUFC203 C2 regular occasional F >65 Retired 20001-40000 2 0 2 RUFB04 B regular occasional M 25-45 Working full-time >40000 2 0.5 2.5 RUMC201 C2 regular occasional M 46-65 Working full-time >40000 2 1 3 RUMB02 B regular occasional M 46-65 Working full-time 10000-20000 1 0 1 RUMD03 D regular occasional
Rural_Axbridge Rural_Axbridge FG1_15102014 M >65 Retired >40000 2 3 5 RUMB04 B regular regular
F 25-45 Working part-time 20001-40000 2 1 3 RUFB05 B regular occasional F 25-45 Working full-time >40000 2 3 5 RUFC106 C1 regular occasional F 25-45 Working part-time 20001-40000 1 1 2 RUFC107 C1 regular 0 F 46-65 Working full-time 20001-40000 2 0 2 RUFC208 C2 regular occasional M 25-45 Working full-time >40000 2 4 6 RUMC105 C1 regular 0 M 25-45 Working full-time 20001-40000 2 4 6 RUMB06 B regular 0 M 46-65 Working full-time 10000-20000 2 0 2 RUMC207 C2 regular 0
Rural_Axbridge Rural_Axbridge FG2_15102014 M >65 Retired >40000 2 0 2 RUMB08 B regular 0 These two criteria have been met. In total, 32 consumers took part in the focus groups, split evenly across four focus groups (two urban – based in Bristol; and two rural – based in rural Somerset). There is a good distribution of socio-economic profiles (B – 31%, C1 – 38%, C2 – 25%, D – 6%), with a good mix too of male and female participants. The age profile of participants is also well balanced (44% were 26-45; 31% were 46-65). The majority (over 80%) of participants were in employment (full or part-time) and/or were part of a household in which someone was employed, although retired members of the population are also represented. As part of the sampling strategy, it was also important to talk to consumers who buy their food in different places (supermarkets and/or alternative food networks). As the last two columns in Table 7 shows, all consumers www.glamur.eu 64
surveyed frequently used supermarkets and some also shopped at farmers’ markets. We turn now to examine consumers’ cheese buying habits. In this section, and others that follow, key quotes from the focus groups are included. We have assigned each consumer with a participant code for purposes of anonymity. The participant coding is structured as follows: UR for urban or RU for rural; M for male or F for female; B, C1, C2 and D for socio-economic status (using NRS social grades); and finally, the number assigned to the participant in the group. For example, URMC103 means urban resident, male, social grade C1 and participant number 3.
5.4.2 Consumer cheese buying habits and behaviours This section provides a general profile of consumers’ cheese buying habits and behaviours. It is important to understand the types of cheese, how much cheese and how often consumer households eat cheese over the course of week before one can imagine more specific questions related to global and local cheeses. Table 8 summarises the cheese buying habits of focus group participants. The right hand column summarises the main reasons consumers gave to explain their cheese consumption habits. The majority of focus group participants eat cheese at least 2-3 times a week. Some reported that they eat cheese every day. Consumers buy cheese at least once a week and the average spend was £5, although some reported spending £20 per week on cheese.
Table 8: Focus group participants cheese buying habits Dietary habits Patterns observed Comments / justifications No. of days per week Average 2-3 times a week, Most eat cheese at least 2-3 times cheese is consumed but variable a week and some most days Avg. spend on cheese Between £5 to £20 Spend is determined by size of per week household and income but also special occasions/seasonality (e.g., Christmas) Cheeses consumers Huge variety of cheeses Determined by price of the cheese typically buy? purchased, including many and the occasion, as well as what it international cheeses. is used for (table cheese, cooking) Household consumption Variable, but in most cases Consumers were not generally of cheese per week at least 250g per week aware of the amount of cheese consumed in grams/per week, describing instead a standard 250g block of cheese. Reasons for level of Taste and convenience Consumers commented that cheese cheese consumption? was a key staple in the British diet. How is cheese used? To eat and for cooking. See above.
When consumers were asked to explain their cheese consumption habits and the role cheese plays in their diet, a common remark was that cheese was a key part of the British diet and food culture; it was also described as an ingredient that could be used to add flavour. Consumers made the following general remarks:
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• Mass-produced cheese was perceived as an everyday food used mainly for cooking and making sandwiches. • Cheeses such as mature or extra mature cheddar were regarded as staples that are included in daily meals (sandwiches for work/school, cheese on toast, pasta, etc.). • Apart from cheddar, which nearly all participants bought, the variety of cheeses bought depends on taste preference, price and cooking habits. The most commonly cited cheeses bought were: brie, blue cheese, parmesan, halloumi, feta, goat cheese, camembert and mozzarella. The following quotes capture some of these cheese buying habits: “I eat cheese probably 4 or 5 times a week. I need to try and cut down, because it’s supposed to be not good for us. I eat cheddar, brie, probably blue cheeses, parmesan, but they vary within the same sort of cheeses” (URFC104). “I think we buy a variety of cheeses from various shops. My wife seems to grate it into everything – so it goes into omelettes, or on jacket potatoes. I like it as it is – but again, parmesan, we buy it from Aldi’s or Lidl’s because it’s so much cheaper. We put it in spaghetti bolognese. Cheese on its own, we both like after a meal, maybe once or twice a week. It could be soft cheese like camembert and my wife prefers good old traditional cheddars” (RUMB08). • Artisan cheeses were viewed as ‘luxury food’ and a ‘treat’ on special occasions. • Cheese was a source of calcium and preferred over crisps as a snack for their children. Cheese was considered a ‘versatile’ ingredient which ‘enhances the taste’ of many meals. As one consumer explained: “Like cheddar goes on quite a lot of things, to make a little… to make it taste a bit better. I also like eating blue cheese and blue cheese sauces, stuff like that. Wensleydale with cranberry and stuff like that; I enjoy that on a cheese platter as well” (URMC202).
• Its role as a taste enhancing ingredient was particularly noted by vegetarian participants. For those on a vegetarian diet it plays an important role as a taste enhancing ingredient. • Vegetarian people tend to eat more cheese because it adds flavour to the meal and is also a source of protein. • Consumers were aware of the health issues related to overconsumption of cheese. Only people with a health history have concerns about the levels of cheese they eat.
5.4.3 Purchasing behaviours and the affordability of cheese Having so far presented a profile of focus group participants’ cheese eating habits, this next section looks at the factors that determine consumer decisions to buy cheese. We examine these factors and identify differences between the urban and rural focus groups. Table 9 summarises the key factors influencing participants in relation to cheese purchasing behaviours. It also categorises the factors in relation to the GLAMUR dimensions.
Three factors emerged as particularly important: price perception, taste and convenience. Taste preference was the most commonly cited aspect across all four focus groups; however, participants also underlined the importance and influence of price and www.glamur.eu 66
convenience. These three factors are difficult to separate out when consumers talk about cheese purchasing decisions (i.e., all have some level of influence). Consumer behaviours are particularly driven by taste preference and price. Taste was more important for the rural group than price was. The urban focus group participants were more price sensitive that the rural groups. The influence of economic and socio-cultural factors is therefore clear. In relation to the GLAMUR dimensions, consumer purchasing habits are less driven by ethical or environmental standards. Economic, social and to some extent health factors were most important. We examine some of these key factors in more detail below.
Table 9: Key factors affecting consumer decisions to buy cheese
Presence in the urban/rural Factors important to discourse purchasing patterns Economic Social Environmental Health Ethical of consumers Urban Rural
Price
Taste preference Convenience (Availability, time constraints)
Seasonality Origin (localness)
Quality
Ethical considerations Environmental considerations
Food safety
Health
Availability of information
Price perception Cheese is perceived as an expensive product across the focus groups, especially when compared to other staples. The following quotes illustrate this: “I always look at the price. I think cheese is really expensive, comparatively… [compared to] pasta” (RUFB05) “I think if you compare it to the price of meat, then I think it’s about the same really. I see it as a bit of a luxury” (URFC208). www.glamur.eu 67
The affordability of cheese depends on the consumer’s household profile. Participants coming from large households with children or with more than two adults and where the level of consumption is high (>500g a week/household) were particularly insistent on the influence of price. As one participant put it, “Always supermarket…And always where the best price is” (URMC107). This pattern was observed across the focus groups. For example: “With all our shopping, we will go to the supermarket, get maybe five things from there, five things from somewhere else. We budget completely, so then we know if we want to go out for a meal at the end of the month, we can go out for a meal at the end of the month. I know it sounds silly, but with two kids I mean…it is so expensive. So we try and budget that much and we’re very careful about where we shop” (URMC107). “Price is the big thing, because it’s so expensive, and there are so many different ones, so trying to keep the price down – love a deal” (URMC204).
The availability of special offers is clearly important and represents a determining factor in cheese purchasing patterns. Supermarkets were perceived by consumers as good in terms of providing variety and providing offers/reduced prices. Consequently, this explains why many consumers shopped there almost exclusively for cheese. The following quote reflects this well: “This is where the supermarkets are good, aren’t they: they’ve always got something on offer haven’t they? I mean they’ve got you tied in. And that’s good, because it makes you try different things as well. You know, and then you think ‘oh, I wish I hadn’t got this one’, cause you’ve got it for the price, but I forget by next time, so next time I go and get it again” (URMC101).
As part of the discussion about the price of cheese, consumers in all focus groups mentioned the price of milk. As one consumer put it, “Well, I don’t really approve of what’s going on at the supermarkets. 4 pints of milk for a pound is ridiculous” (RUFC208). These views show a degree of consumer awareness and responsibility, even though consumers are price driven.
Willingness to pay, localness and seasonality Overall, the way people perceive price is multi-layered. Two elements are particularly important: 1) affordability and 2) the value consumers attribute to the product. Willingness to pay is therefore closely related to perceived quality. Focus group participants equated quality with “organic and locally made and good quality ingredients and good animal husbandry” (URFC208). There is a sense of awareness about the importance of territoriality. People from the second rural focus group explained, for example, that they would be willing to pay a little more to support local production in the UK or elsewhere where the product is originally from (RUMC105). In the urban groups and the other rural group, this awareness exists but acting on it was conditional to price. People were more willing to buy more expensive speciality cheeses for Christmas, other seasonal times and for special occasions.
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Convenience This indicator was important to consumers and described in two ways: time and availability. Consumer comments about convenience relate especially to the retail outlet from which people buy their cheese. Buying cheese at supermarkets was convenient because supermarkets offer a wide variety of choice. Over 70% of the participants were working full-time, which limited the time people had to spend shopping. People tended to buy their cheese at supermarkets because it was convenient and the least time consuming. Buying from supermarkets is also important because they are perceived as cheaper and able to offer lower prices.
Commercial and artisan cheeses During the focus groups the distinction between ‘global’ and ‘local’ cheese was not always easy to maintain. There was a blurring between, for example, local and British cheeses. Consumers did distinguish between artisan cheeses and more commercial products. In general, the more commercial cheeses were perceived as affordable compared to ‘artisan’ cheese, which were viewed as “expensive” (RUFC101; RUFC102; RUFC203; RUFC208; URMC202; URFD06). However, location and household context is important. For example, one consumer (RUFC102), previously a resident of London who moved to the countryside, explained that prices are much higher in London than in rural areas.
5.4.4 Information and communication, including labels and labelling During the focus groups consumers were asked a series of questions about the availability of information when they buy cheese, as well as the kinds of information they look for. This included presenting consumers with selected promotional information (leaflets, websites and labels) related to commercial and artisan cheeses (see Table 10). These – and other promotional images – were used to prompt discussion about how consumers perceive more large-scale, commercial and small-scale, artisan producers.
Table 10: A selection of promotional images used is the consumer focus groups
Availability of information The Stilton cheese label was used as a general prompt for the discussion about availability of information. In general, consumers appreciated the information available on cheese products, including health-related information (RUFB04; RUMB02). However, www.glamur.eu 69
most consumers confessed that they do not usually read any of the information provided, tending to look mostly at the price of the cheese, particularly if it was a cheese they had bought previously. Some consumers wanted more information with regard to: 1) taste (flavour); 2) storage; and 3) origin. There was a desire to have more information on the taste and texture of the product and not necessarily just a marketing story about how the cheese was made: “I think it’s quite patronizing (reads label aloud): ‘to make great cheddar you need the very best milk. For cows to make milk they need grass.’ It’s basically like taking a crappy cheese and trying to make it sound less crappy. It’s basically factory cheese – they get the 400 local farmers to supply all the milk; it just doesn’t really seem any different than… it’s just trying to paint a picture” (URMB06).
Information about production practices did not raise much discussion in the focus groups overall. Consumers who had direct experience with farming / food production (e.g. RUMC105) expressed awareness. Consumers in the urban focus groups did not mind at all about the processing. In the rural focus groups consumers were more sensitive to the ‘hand- made’ aspect of artisan cheeses.
For some consumers, labels which convey the story or trigger a thought process that links the product to ‘artisan’ or traditional modes of production were viewed as more attractive. In response to a Quicke’s cheese image, one rural focus group participant commented, for example, that the image was appealing because “when you buy cheese like that there is not any packaging. It does not even have cellophane on it - you can actually touch it. So that's a small-scale produced cheese” (RUFC101).
Regardless of their place of residence, consumers favoured small-scale farming and local produce and commented that if given a choice they would prefer to buy “locally produced” products. Localness in this context was often defined as coming from the region. For instance, consumers preferred to “buy a West Country cheddar over a Cornish cheddar” (RUMC105) and “Somerset Brie over a French Brie” (URMB06).
Product labelling As noted earlier, consumers mostly buy cheese from supermarkets. Consumers did not distinguish between scales of production when they purchased cheese. They explained that what they want is an assurance of quality and often “the British flag” (RUFC106) was enough for people to trust the quality and safety of a product. British food safety standards were regarded as safe and strict. There was an implicit trust in British regulations with regard to safety standards and an assumption that all cheese producers abide by the same standards.
Consumers were asked about the PDO label. There was a general lack of knowledge about this label and what it stood for; in fact, only one person, from a farming family, was aware what it stood for. Consumers were more trusting towards labelling which promoted localness over organic. Rural focus group participants were critical towards organic labelled products given its higher price. For example:
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“I’m not too bothered about whether it’s organic or not…I would like to know how local that creamery was – cause at the end of the day, I’d probably… if there were two cheeses I’d tend to buy something that was more local. I think it would be supporting the South West or whatever, so I tend to go for that kind of stuff” (RUMB02).
5.4.5 Nutrition Consumers were asked a number of questions about nutrition and nutritional information. This included asking questions about whether they had concerns about their levels of cheese consumption. In general, cheese was perceived as a healthy food and consumers were not concerned about how much cheese they ate. They tended to use the term ‘moderation’ to justify their eating habits. However, the data show that consumption, on average, was much higher than the recommended 30 grams per day.
To prompt further discussion about the nutritional benefits of cheese consumers were shown ‘healthier’ options, including a reduced salt cheese. The reaction to this cheese was generally negative, with comments that it would be tasteless. Consumers were also less trusting of these products. They questioned the possible substitutes used “lighter” or healthier versions and would prefer to buy a cheese which is perceived as healthy (e.g. feta, goat cheese, cottage cheese). Focus group participants considered salt a key ingredient of cheese and have no health concern about it. Salt was associated with taste. No one except one person particularly concerned about their health said they would try a salt-reduced cheese.
The perception of fat content prompted interesting responses. In all four focus groups some people referred to cheese as “bad”, with reference to its fat content. While some acknowledged that they tend to ignore the information and enjoy the taste, others, more conscious of health issues, commented that they may opt for healthier product or at least moderate their consumption. Depending on the cooking practices, the concern about fat content varies. As a cooking ingredient the fat content is not factored. However, in ready- made food, fat content is more of an issue for urban consumers.
Flavour is important and consumers argued that they would not sacrifice taste but would, if necessary, reduce quantities. Some participants argued that cheese was a healthy food and a key source of calcium: “I grew up in the 50s and 60s...There was a big campaign to get milk and cheese into everybody to improve the health of the nation. We were always brought up that cheese is a healthy thing: it’s the best source of calcium going. And yeah, ever since then, I’ve still thought it is a good source of protein” (RUMB08). Cheese is seen as a key source of calcium and protein and is especially important for people who have vegetarian diets.
5.4.6 Summary The following key points can be noted by way of summary: • There are differences between urban and rural consumers that are important to note, including: greater awareness of production practices, animal welfare and milk price challenges in rural participants, the prominence of affordability in urban groups which www.glamur.eu 71
can determine willingness to support local products and the prominence of price and convenience in urban groups, with taste the key factor in urban groups. • That said, similarities between urban and rural consumer perceptions and behaviours are also notable. For example, consumers with the same household profile tend to behave similarly in terms of purchasing patterns; most consumers perceive cheese to be expensive and artisan cheeses are perceived as more expensive than more commercial cheddars; the issue of trust in the information provided is prominent across the sample, with consumers sceptical about the way information is provided, although trusting of health and safety regulations; all consumers buy at least some cheese from supermarkets; purchasing habits are not driven by environmental motivations; instead, purchasing habits are driven by economic reasoning (affordability) and taste preference. • Finally, in terms of global local distinctions, a key finding is that consumers very often talk about cheese in a general way. There are some distinctions made: local cheeses are more territorially embedded, for example, and often associated through alternative retail sales (farmers’ market or farm shop) and they are often perceived as more expensive. However, consumers generally were not so interested in the production side, including the scale of production. Only informed participants seem to look at the production side in detail, a feature which was more evident in the rural focus groups.
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5.5 Local food chain retailer perspective (Single Gloucester and Farmhouse Cheddar) Four retailers who sell farmhouse cheeses were interviewed as part of this case study. This included a relatively small-scale delicatessen shop in Monmouthshire, South Wales, which employs 1-2 people (R1); a traditional farm shop in Gloucestershire that has been in operation for more than 30 years, employing 10-12 people (R2); and a larger scale farm shop that is part of a chain of farm shops, meaning that it is operating at a relatively larger scale than the other two, employing 43 people on the retail side and 145 in total (R3). Finally a city-based delicatessen shop that operates a wholesale and export service, employing 35 people, is also included (R4).
Despite considerable differences in their scale of operation, there are striking similarities in the ethos of the four businesses in relation to local produce (in this case cheese) as well as to local producers and the local economy. This is exemplified in the following quotations: "We grow a lot (of vegetables) on the farm, which we sell through the shop. That is the main ethos, but once we go outside the premises of the farm, it is local. To support local, be local, and provide fresh, low food mileage, and low carbon footprint produce that sits on the shelves in the shop. That goes through to our cheeses. We support the local cheese industry around Gloucester… If someone doesn't support the small local producers, then we don't have small local producers." (R2) "The main idea is to promote local produce, and specifically around this region, which I deem as Wales, Hereford, Shropshire and Gloucester... (In addition), I want all the cheeses to be artisan, handmade, none of the nasty processed stuff you can get. I think it tastes nicer and it promotes the local farmers as well." (R1) "It's important that we source local cheese and produce from as close to Gloucester as possible. The only constraint, and the guidelines that I have been given, is that it is about quality, so we have to make sure we get good quality products, preferably we do want it from Gloucestershire. However, if we can't get the quality, or if there are certain cheeses or products that we want to sell which we have to go outside that area, then that is something that we are free to do… It's about the local economy. We want to support the local economy and we want to support those products that historically Gloucester is proud of. For example, the Single Gloucester, which is of protected origin. We want to be able to promote those." (R3)
R4 highlights their support of artisan, raw milk producers, who make cheese from the milk of their own herds using natural rennet. “When you visit these makers you get a real feel for the artisan craft, they make a unique and much better product and one connected to the land.”
While an underlying ethos is largely responsible for these businesses stocking local cheese, it is also something that enables a commercial point of difference in terms of what they are selling. This is particularly the case with Single Gloucester, which has both PDO status and is produced in relatively small quantities. All four retailers report that consumers value this point of difference and are interested in supporting it through buying local cheeses. "People are particularly interested in trying local cheeses. There is one cheese from Trelleck (a village not far from this shop): as soon as people find out, they get very www.glamur.eu 73
excited, because people around here know where that is… Welsh people seem less keen on stuff that has got Gloucester on it. As soon as you mention it is Welsh, they will go and buy a bit more than they wanted. The cheese made in Trelleck, we will sell a wheel in 2-3 days. So, it is that local association. Previously, many people would have bought their cheese in Waitrose, or Tesco, and neither of those stock this kind of product because it is such a small, niche product. Basically, it is not mass produced enough". (R1)
In addition to a focus on 'local' cheese, each of the retailers also favours mainly artisan and small-scale producers. As with local, this is again seen as being a point of difference for them as retailers, in that often small-scale producers find it difficult to access supermarkets due to the small quantities they produce, and consumers value the opportunity to try something different. As such, this focus on artisan producers is seen as being in line with what they are trying to do. "I've got some really good quality artisan cheeses that are made throughout Wales. A lot of people don't seem to know them, because they are not stocked in the main supermarkets, which is great for us because we can then have them in here. It's a new cheese for the customers. They get to try it and think 'wow it's a great product'. On top of that, it helps us because it brings more people in." (R1)
Having said that, quality is also recognised as being paramount, as exemplified in the R3 quotation above. R3 and R1 are also concerned to provide some European cheeses, such as French cheeses, in order to broaden the range of cheese they have on offer. Likewise, R4 offers a large range of European cheeses alongside UK varieties, principally to emphasise its market position as a purveyor of fine cheeses. This is less the case with R2, although they also have some non-local cheeses as well.
However, despite the emphasis on provenance, R4 suggests that PDO designation, in the light of the specific historical contexts of the UK, is a simplistic mechanism with which to promote quality cheese production: “…these concepts are very useful in France, but more tricky in the UK. British cheese is currently in a good position, with good levels of knowledge and tradition. In France there are very strict territorial specifications which define cheese by its area of production; there, people would not consider making a type of cheese outside of its traditional area of provenance. But in the UK, the slate was almost wiped clean due to historical circumstances. This has resulted in a great deal of creativity and innovation among cheesemakers. I’m glad that there are PDO criteria for the traditional cheeses and some cheesemakers are trying to reconnect to traditional cheeses via geographical quality criteria. But the implementation of strict controls in favour of territoriality and tradition might kill off some of that experimentation – [cheese variety] is a good example of a cheese which doesn’t conform to a traditional UK type, although it’s a great cheese.” (R4)
Each of the retailers described their relationships with their suppliers as being 'good', or in several instances as being a 'close relationship'. In the case of the two smaller retailers (R1 and R2), this would seem to be partly that their small cheese suppliers were of a similar scale to themselves and there was a feeling of community, in some way. "We have a very close relationship with our suppliers and that is the beauty of small producers. They are no different to us, as a relatively small business. We do strike up www.glamur.eu 74
good personal relationships with them. And I think that it's important. And they know you. You are not an account number somewhere in a system. They know us by name, we know them by name. So if you have a problem, it is dealt with by the person and that is what business should be like". (R2)
This also applied to R3 with a number of their smaller producers, but they also dealt more with larger scale cheese wholesalers where, although their relationship was described as being good it was also more commercial and less personal in its approach. R4 saw their close relationship with producers as essential: “Every month I will visit [our suppliers] and work with the cheesemaker, tasting every cheese made during that month. Together, we will select the best cheeses for us and decide about further maturation. The cheeses selected will attract a premium price. That kind of close relationship can only work with smaller, dedicated cheesemakers.”
In the case of R1, the smallest of the three retailers, it is clear that they have minimal influence on the price they pay for their cheese; indeed, they always take the price they are offered by producers. This is partly because the quantities they buy are so small, but also because the smaller producers have plenty of outlets available for their cheeses. Similarly, R2 said that they tend to accept the price being offered by their cheese suppliers, especially the local producers. Having said that, they have in mind a margin they need to make on the cheeses they sell, and occasionally will discuss the price with the producers. Underlying the relationships seems to be a sense of working with each other as small businesses. "We don't like to nail people to the wall. Small producers are never going to be able to compete on price with a major producer. But, their product is somewhat unique. So it will always carry a slight premium price. Competitive -- they know we have got to be competitive. We don't have major price discussions. We might talk about it occasionally. They will tell us the reason why they have to charge a particular price. We say okay, we can cope with that, or we can say that is a bit expensive and they will work with us. So it is a two-way street". (R2)
In the case of R3, they are able to buy their cheeses in much larger quantities and therefore in principle have more leverage in the supply chain. However their ethos is to not be greedy with their margins and that they want to work with their suppliers rather than against them. "On cheese our mark-up tends to be between 35-40%. We are not greedy with our margins… The ethos of the business is that we really want to work with our suppliers. We want to ensure that they get a fair share as well. As long as we can make about 40%, then the business is happy. We would rather turn over more volume". (R3)
Indeed, this retailer sees it as part of its purpose to actively and proactively have a positive impact on local businesses and consequently the local community. This focus stems from the original aims of the business when it was set up in the early 1970s. In this respect, their website states that they have "a fierce passion for, and a pride in, our landscape, our people, our environment and its products", which is encapsulated in the following:
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"We are very proud of where we stand and the impact that we certainly have in the local market. We are fair on price. Certainly I know the impact we have had on the smaller businesses, with the consistency of the orders, the frequency of the payments they are receiving. So we are giving them security. Also, then to our customers, we are another choice. (R3)
It is clear, however, that dealing with very small scale cheese producers is not without its challenges. R1, for example, said that it is necessary to get used to how the individual producers work and that sometimes he may wait a week or 10 days for a response to an e-mail, in that they are so busy actually producing milk and/or cheese. While for the larger scale R3, who are in the process of trying to scale up the quantity of local cheese they are selling, it is a case of contacting additional local producers in that those who currently supply them in many cases do not have the capacity to increase their output to meet an increased demand. "Just because we plan to scale up doesn't mean we will no longer favour those suppliers, we will just need to bring in others to complement them and to work together. Because, for example, Simon with his herd of Gloucester cows, there is only so much cheese he can make. But that is part of the charm… (However), we can't run a business just with people like that. There is a place for them in our business, but we need to be more inclusive." (R3)
Similarly, while R4 is in a commercial position to be able to market relatively large quantities of cheese through its various channels, of which less than a fifth of its £5-10 million turnover relates to retail sales… “the usual rules of supply and demand don’t always work. Some producers may be selling all that they make. If you go along and want to buy a lot of cheese, or if you want to negotiate a lower price on the basis of bulk purchasing, they can’t always accommodate that, or don’t want to.”
It is clear that all four retailers are intent on paying the cheese producers a fair price for their cheese. In addition, it seems they are also, to a greater or lesser extent, intent on making the cheeses available for consumers at as reasonable a price as they can. That is, they each have a particular margin that they need to achieve in order to remain viable, but at the same time seem to want to make the cheeses as widely available as possible. "We are not greedy with regards to the margin. Certainly, we have had many, many customers who have commented on the reasonable pricing of, certainly the cheese in the deli counter." (R3) "The margin is important, but on the other hand you have got to give good value." (R2) "My view is that I don't want to overcharge people. I try to do a quick trawl around Waitrose (a local supermarket) to see what they charge. And where we do have overlap, we charge the same price. So it is trying to keep that balance. People don't mind spending an extra 10-15p per 100g to come here over Waitrose, because of the service provided, because I can talk to them about the cheese, where it is made and all that kind of stuff. And they have got different products to what they can get in the supermarkets. People can come in, they can try the cheeses, there is no obligation. I don't try and give people the hard sell." (R1)
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As suggested in the quote from R1 above, direct communication between the retailer and the consumer is common across the three outlets. Consumers are encouraged to taste the cheeses for themselves, as well as to ask any questions they may have. This is seen by R2, in particular, as an important part of educating consumers about the values associated with buying local and artisan produce, compared to what may appear to be similar products within a supermarket. This message is at the very least implicit in the layout and styling of all three shops. In the case of R1 and R4, the image is deliberately ‘foodie’ in its orientation; R2 is a ‘no frills’ farm shop in an old factory, which emphatically trades as a farm that is selling its produce through its own shop; and R3 has a huge mural that shows that it sources its food from 170 local suppliers who come from within 30 miles and a further 30 producers from within a 30-50 mile radius. In addition, chalk boards by the deli counter promote particular local produce and the staff are trained to be knowledgeable about the produce they are selling.
Although none of the retailers had conducted detailed research on the profile of their customers, at least three of them felt that they were perhaps 'maturer', as well as having a particular interest in buying local produce. In this respect, that there was a degree of crossover between the profile of the people buying from these types of outlets and those who buy at a farmers' market.
In relation to resource use, the cheeses on display tend to be wrapped in cling film in order to keep them moist. As far as energy use is concerned, the main energy requirement is for chiller units. R3 are especially aware of the potential impact of their business on the environment and are keen to minimize it where possible. As such they train their staff to be aware of this, as well as their suppliers: "We obviously try to be environmentally aware. We advise our staff to be aware as well, particularly at the till. Packaging cheese. Just to be aware of how much packaging they use. It is in our suppliers' agreements that all of the suppliers that we deal with, that they actually, when they deliver to us, that they have an awareness as well. A lot of them actually reuse the trays and boxes". (R3)
Waste seems to be minimal in all four outlets. In the case of R1 and R3, they both make sandwiches which means that any left-over pieces of cheese can be used up, minimizing wastage further; similarly, R4 has the benefit of its café and delicatessen.
A final question to the retailers involved them reflecting upon the debate surrounding the nutritional (dis)benefits of cheese. All were emphatic in saying that it was a good food product, but that it should be eaten in moderation. There was an awareness of the issues surrounding the fat content of cheese, but none of the retailers saw this as a problem going forward. Essentially, consumers just needed to be sensible about eating reasonable amounts. The following quotations give a flavour of their perspectives, including that people are likely to eat less quantity of better quality/more expensive cheeses than those that are lower-priced:
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"If you do it in moderation, most things aren't harmful for you. If you do it fresh, it's healthy. If you do it when it's still got dirt on, it’s nutritional for you. If it's only days old, it’s got to be better for you than weeks old. I don't have any issue with that at all." (R2) "Little and often (laughing). We offer goats cheese, sheep milk cheese. So we do offer alternatives to your full fat cheese. I think there is something for everybody. And, the real positive of the deli counter is the fact that you can buy small amounts of cheese. And, if you buy good quality cheese, which all our cheeses are, and you're getting a good flavour, actually you don't need that much of it." (R3) “When people spend money on high quality cheese with a very satisfying taste, it is not then also necessary to buy large amounts of cheese of lower quality. … The relatively low cost of bulk cheddar can actually encourage more cheese consumption than is ideal, but do you really want to eat that much cheese?” (R4)
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5.6 Visual comparison of the performance of global and local supply chains, by attribute and indicators This section of the report presents a detailed visual comparison of local and global chains through the use of a series of graphical representations, structured according to the eight attributes chosen for this case study. In turn, each of the attributes has a number of indicators associated with them, in order to help assess the performance of the two different scales of food supply chains. In the case of the consumer behavior attribute there are no graphical representations. This is because the indicators associated with this attribute are qualitative in nature, relying on the perceptions of those involved. The data for this attribute are drawn from a series of four consumer focus groups, with the participants being asked to make qualitative comparisons between different food supply chains and types of cheese.
The data for the development of the graphs are presented in Table 5, above. For convenience, the key elements of this table are presented for each of the attributes in turn, below. In each case, it is the two right hand columns (local performance % and global performance %) that are used to develop the graphical representations. The percentage figures are derived by assessing each of the indicator values against the relevant benchmark figure.
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5.6.1 Affordability (Economic Dimension) There are two indicators associated with this attribute. Local Global Min. Av. Max Local Global Attribute Indicator performance performance b’k b’k b’k value value % % Ability to provide food 25 4 18.25 9.76 32 73 at acceptable Affordability prices
Price perception of 0 4 1 2 25 50 consumers
It is clear from the graph below that the global scale scores better on both indicators of affordability. Simplistically, this would suggest that the global cheese FSC is more 'affordable' than the local cheese FSC; however, this does not tell the whole story. Taking each of the two indicators in turn.
Ability to provide food at Affordability acceptable prices. There is little doubt that 80 cheese sold within the 70 60 global chain is 50 considerably cheaper than 40 cheese sold through the 30 Local score (%) local chain. This is partly 20 Global Score (%) due to the larger scale of 10 production in the former, 0 coupled with greater Ability to provide Price perception of mechanisation, that food at acceptable consumers significantly decreases the prices labour input involved and reduces the cost per unit of production. The quantity of cheese produced is also very much greater than within local FSC, necessitating a different focus in terms of marketing outlets. Those cheese producers involved in the global FSC need to orientate their production towards mainstream outlets, such as corporate retailers, rather than towards smaller scale delicatessen shops and farmers' markets due to the large quantities involved. In a number of cases, large-scale, globally-oriented cheese producers make 'generic' cheese that is marketed as 'own label' cheese by corporate retailers. As such, it is inevitable that a primary marketing focus is on price, in order to remain competitive advantage within these markets.
By contrast, local cheese FSC tend to be much more labour intensive, focusing on the production of 'artisan' cheeses that are in some way distinctive within the marketplace. The scale of production is also much smaller than within global cheese FSC, with many of the producers able to pick and choose which market outlets they sell through, often basing www.glamur.eu 80
their prices on their costs of production plus a given markup, rather than having to compete within a highly price competitive marketplace. Rather than corporate retailers, the marketing focus tends to be more on delicatessen shops, farm shops and at farmers' markets. Having said that, some small-scale, local cheese producers do sell/have sold through corporate retailers, but this is usually quite problematic both in terms of supplying sufficient quantities, but also in terms of retaining a sufficient profit margin.
When considering the affordability of cheese, it is also necessary to take into account the relative 'qualities' of the different products involved. There is no doubt that for a given quantity of cheese purchased, the global cheese FSC scores considerably better in terms of its affordability. But this suggests that the qualities of all cheeses are exactly the same, enabling a meaningful like-for-like comparison between a kilogram of cheese purchased within the global FSC and a kilogram of cheese purchased through a local FSC. However, while not suggesting that all local cheeses are of a higher quality than all global cheeses, the former more often focus their marketing strategy on being of a distinctive nature with particular qualities, the result in large part because of their artisan production. Qualities within this context are signified by taste, texture, and very often reference to the place of production or to the producers themselves. Concomitant with this, the cheese is marketed as being something special and to be savoured, rather than simply a mass ingredient that is used on a pizza, for example. In other words, the quality of the cheese will significantly impact its price, to a greater extent than simply whether it is local or global. This point was reinforced in the consumer focus groups. Stilton cheese, for example, could be described as a global cheese, yet its price and quality orientation is more akin to that of local cheeses. Farmhouse cheddar producer CC1, above (section 5.2 above) also outlines the steadily improving quality of creamery cheddar as a competitive challenge. However, in general, cheeses with these higher 'qualities' are marketed as something to be savoured, rather than eaten simply as an ingredient of a meal. In this respect, it is suggested that the quantities eaten may well be less than with more generic cheeses, improving their affordability by effectively reducing the quantities that are needed to satisfy the consumer.
Price perception of consumers. As above, the graph illustrates that global cheese FSC are perceived to be considerably cheaper than local cheese FSC. However, this simplistic distinction again requires unpacking. The price perception of consumers was principally gleaned from a series of focus groups, where it became clear that although consumers were less aware or explicit in terms of distinctions between more global and more local cheese, the reality of their purchasing decisions was that they simply purchase 'cheese'. Cheese, in general, was perceived to be expensive, although to some extent this was dependent upon the make up of individual family structures. For example, those with small children tended to buy global FSC cheese, such as block cheddar, in that their children were largely eating the cheese as an ingredient of macaroni cheese or pizza, for instance, rather than as a table cheese. Consumers also make a distinction between everyday type cheese, and cheese for more special occasions, with the latter more often associated with artisan cheeses purchased through delicatessen counters or shops, or farmers' markets. Cheese for special occasions
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was recognised to be significantly more expensive, but that at the same time it had a more satisfying flavour meaning that it could be eaten in smaller quantities.
For the main part, consumers purchase their cheese through supermarket outlets, because of the convenience involved. For everyday cheese requirements, most people buy what could be described as cheaper, global FSC cheese, such as block cheddars. Correspondingly, where supermarkets also have more 'artisan' cheeses, these may also be purchased for more special occasions, where price may be of less concern than difference and taste -- qualities which override the price to some extent. Cheeses from farmers' markets and delicatessens fall into the same category. In other words, care needs to be taken when simply judging the affordability of cheese in terms of its perceived price, in that all cheeses are not used for the same purposes. Similarly, whilst most, if not all, local FSC cheeses might be described as 'artisan' or 'special' in some way, there are also global cheeses which could be similarly described -- such as Stilton cheese, for example.
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5.6.2 Creation and distribution of added value (Economic Dimension) There are three key indicators associated with this attribute (cheesemakers profit potential, distribution of final price and contribution to the economy). Local Global Min. Av. Max Local Global Attribute Indicator performance performance b’k b’k b’k value value % % Cheesemaker 0 10 6.65 2.45 66.50 24.50 profit Distribution 1 0 0.250 0.338 75.03 66.15 of final price Milk producer 0 50 15 37 30 74 Creation share of final and price distribution Cheesemaker of added share of final 0 50 41 31 82 62 value price Retailer share of final 0 50 44 32 88 64 price Contribution to the 0 0.2 0.4 0.365 0.005 91.25 1.25 economy of the region
Against all three indicators, the local FSC scores higher than the global FSC. In the case of the 'distribution of final price' the distinction is relatively minor, but in the other two cases the differences are very considerable. Taking each of the three indicators in turn.
Cheesemakers profit potential. It is clear from the graph that the local cheese FSC delivers a considerably greater cheesemaker profit potential than the global cheese FSC; at least in terms of the value per kilogram of cheese sold. While this is quite useful to know, it masks a number of contributory elements that need to be considered before assessing the extent to which one scale of food supply chain is performing better than another in terms of the 'creation and distribution of added value'.
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As mentioned above, a key difference between global and local cheese FSC is the scale at which they operate. For example, some of the smaller, local cheese FSC in this study were producing as little as 5 tonnes of cheese a year, whereas global cheese FSC produces will have an output numbered in the tens of thousands of tonnes a year. In other words, the overall profit potential of an individual business will be determined by the net profit per kilogram of cheese produced multiplied by the output. In the case of smaller scale, locally-oriented cheese producers, there is a recognition that they need to achieve a given turnover in order to remain profitable, and that in order to do that they need to ensure that the price they receive per kilogram is sufficient to do this. As such, local-scale cheese producers choose their marketing outlets carefully, ensuring that they are able to be price makers, rather than price takers. In many cases, for the artisan and small-scale cheese producers surveyed for this project, they are ‘satisficers’, in that they are not looking to grow their business beyond a certain, manageable level relative to their lifestyle needs. This means they can limit the extent of their dealings with highly competitive global chains, because upscaling and growth is less of a priority. On those few occasions where local scale cheese producers endeavour to sell through more global- scale outlets, their profit potential tends to be squeezed to the extent that they can no longer remain viable. This is in stark contrast to those large-scale producers who are oriented more towards global FSC. In their case, they know that they must be able to compete predominantly on price if they are to retain their access to these outlets. As such, they need to produce in sufficient volumes, as well as with high levels of economic efficiency, if they are to remain viable.
Furthermore, in comparing the relative performance of local and global FSC in relation to cheesemaker profit, it is apparent that there is a general tendency within local FSC for each element of the chain to support each other. For example, local-scale retailers reiterated again and again how they want to work with their cheese suppliers, rather than driving them down on price wherever possible. This is in stark contrast to more globally- oriented FSC, where the emphasis is all about minimising prices paid and maximising profits taken. The emphasis of the chains can therefore be very different, making simplistic comparisons potentially misleading, especially when simply based upon profit.
Distribution of final price. This attribute is a composite measure of the three other indicators shown in the table above, namely: milk producer share of final price, cheesemaker share of final price, and retailer share of final price. The graph would suggest that the distribution of the final price is similar between both the global and local FSC, with the local chain marginally outperforming the global chain. This is potentially an interesting finding, in that large-scale retailers, associated with global FSC, are perceived to receive a disproportionately large share of the final price within FSC. Nevertheless, the figures shown here need to be qualified to some extent. In both scales of FSC, the price price paid to milk producers is broadly the same. However, it is frequently the case within local-scale cheese FSC that the milk producer is the same as the cheesemaker. In some cases, a notional charge is made from one part of the business to the other, whereas in other cases the business is simply run as one entity with milk profits and cheese profits being accounted for together. This is significant, in that small-scale, locally-oriented cheese producers often started in business www.glamur.eu 84
as a means of increasing the value added of their milk production. As such, two thirds of the distribution of the final price are retained by the same operation. This may in some cases be extended to all three elements, in that many small-scale cheese producers also retail their own product. In addition, local FSC-oriented retailers also expressed a wish to work with their suppliers when negotiating price, rather than seeking to maximise their own profit potential at the expense of the cheesemaker.
In contrast, the normal global FSC scenario would be that each of the different components of the chain would be negotiating prices between themselves. Certainly, milk producers when dealing directly with large-scale retailers are put under enormous price pressure, resulting in many milk producers going out of business. Cheese producers will tend to pay the industry norm for the milk they use, but are then in a slightly better position to negotiate price with retailers in that they have a less widely available product. In this respect, it is crucial that they retain an element of distinctiveness within the marketplace, in order to ensure that they have at least some bargaining power within the FSC. Another issue that slightly favours the global performance figure within this research, is that one of the global chains examined operates as a co-operative which seeks to ensure a fair distribution of value throughout the chain. In the absence of this, it is likely that the global performance, in terms of distribution of final price, would be less good than it is portrayed as being within this research.
Contribution to the economy of the region. The graphical representation of the difference between global and local FSC performance is quite dramatic in this instance. In order to establish the contribution of different FSC to the economy of the region, a proxy was used. This was the number of full-time equivalent (FTE) jobs required in order to produce a tonne of cheese. Within this piece of research, in the case of local FSC a total of 17 tonnes of cheese were produced, which required six FTE; whereas in the case of global FSC, 26,000 tonnes of cheese were produced requiring 140 FTE.
When assessing the contribution to the economy of the region in terms of jobs created, it is clear that the local FSC generates far more jobs per tonne of cheese produced, but clearly this is only part of the answer. Local cheese FSCs generally produce tiny amounts of cheese, and employ relatively few people. Larger scale, globally-oriented FSCs, on the other hand, tend to produce large quantities of cheese and employ relatively large numbers of people. In other words, care needs to be taken when assessing the relative performance of FSC using the proxy of jobs created per tonne of cheese produced. Both local and global cheese FSC create jobs in order to function, with their relative merits in terms of performance determined by the specifics of the economic needs of the region/area concerned. In the case of the global cheese FSC, relatively large numbers of jobs may be created in a factory situation; whereas in the case of local cheese FSC, a relatively fewer number of jobs may be created, but these may be in a dispersed rural / on-farm environment.
The types of jobs and working conditions must also be considered when assessing the contribution of cheese producers to the regional economy. For example, farmhouse www.glamur.eu 85
cheesemakers tend, in our research, to be skilled crafts people with relatively good incomes in a dairy sector under economic stress. In the case of FC2, some current and retired workers benefit from the opportunity to live in rented accommodation owned by the company. The automated nature of creamery production will require a different type of skilled worker, as well as a larger cohort of specialist administrative and financial management staff, compared to the farmhouse scale.
An additional observation in relation to this indicator, is that although the local FSC would appear to perform well in terms of jobs created per tonne of cheese, this could be looked at from another perspective, namely, the efficiency of production per unit of labour used. In this scenario, the global cheese FSC would appear to perform much better than its local counterpart.
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5.6.3 Information and communication (Social Dimension) There are three indicators associated with this attribute. Local Global Min. Av. Max Local Global Attribute Indicator performance performance b’k b’k b’k value value % % Communication 0 1 1 0.6 100 60 along the chain Information and Availability of 0 1 0.5 0.583 50 58.3 communication information Product 0 1 0.67 0.75 67 75 labelling
With this attribute, the relative scores of the global and local FSC are very similar for both 'product labelling' and 'availability of information', with a more significant difference evident in terms of 'communication along the chain'. Each of these three attributes will now be assessed in turn. Communication along the chain. In terms of the local FSC, the communication processes amongst those studied within this research were excellent. They were frequently described in terms of being 'personal', constructive and friendly; in a number of cases, the milk producer and cheese producer were the same person. Evidence from the retailer interviews was that communication works very well between themselves and the cheese makers who supply them; a sense that they are all small-scale, local businesses who are trying to make a living and that they should help each other as much as they can. In this way, scale and localness are inextricably linked in terms of determining performance, as they often are.
The global cheese FSC scores considerably lower than the local FSC, mainly because of relatively poor communication between the cheesemaker/wholesaler and the final retail outlet. Generally this is recognised to be a combative relationship, based upon the relative bargaining positions of those involved. There seems to be no real sense of being in this together, but rather of operating as distinctive businesses each seeking to maximise their own benefits.
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Availability of information. This indicator is based upon the availability of six different sources of information: website, personal contact, tastings, newsletter, point of sale information, and social media. Against this indicator, the global FSC scores slightly better than local FSC. However, this relatively simplistic distinction masks considerable differences in terms of how information may be disseminated in practice. Simply identifying that information is available, is only part of the story. For example, the two key aspects of the local FSC were personal contact and tastings. These were seen to be critical points of distinction for local producers and retailers, enabling them to have a very direct influence on the consumers of their products. By contrast, global FSC tend to have more sources of information available, perhaps most notably in terms of 'point of sale information', but critically each of these sources of information is not necessarily of equal worth and validity. In seeking to determine the relative performance of FSC, it is necessary to understand in some detail how each of these different elements is used in practice to disseminate information; furthermore, the impact that this information has on those who receive it. In this respect, it could be argued that while local FSC may have less sources of information, the impact of those sources they focus on may be more profound.
Product labelling. Both chains score reasonably well against this indicator. In the case of global FSC, there are stringent regulations concerning what labelling must contain. This includes, for example, details on nutrition, ingredients and sourcing/provenance. In addition, there may also be ethical information and the production practices involved. The requirements for local cheese FSC are much less stringent, essentially just requiring the name of the cheese and producer, as well as some very basic ingredients. This is likely to change in the future.
Global FSC labelling is inevitably and necessarily more comprehensive than local FSC, mainly because there is a greater distance between the production of the cheese and its consumption. In many cases, global cheese will simply be picked out from a supermarket shelf, with no further interaction with members of the retail staff. This is not to deny that most supermarkets also have a delicatessen counter, where there is scope for further interaction. In this latter case, there is likely to be minimal labelling information available on cheese that has been cut specifically for the customer and wrapped in cling film. This is similar to local cheese FSC, where in most cases the cheese will be sold as a section cut from a larger whole and wrapped in cling film, with no further labelling. It is quite unusual for local cheese to be sold pre-packaged, complete with a full label.
In short, product labelling as an indicator of performance has more to do with the distance between the production and consumption of food, rather than simply with the dissemination of information/communication. Local FSCs may have less comprehensive labelling, but get their message across through personal contact and explanation. Conversely, supermarkets need comprehensive labelling in order to fully explain to consumers about the choice they are about to make. In the focus groups, consumers’ reactions to the global and local labelling material presented to them supports this conclusion. In the main consumers tended to be sceptical towards what were preceived as more mass-produced, commercial cheeses, but at the same time appreciated such labelling www.glamur.eu 88
because of its functionalism and also expected certain standards to be met for such products. Consumers thus demonstrated different values and attributes of quality when judging farmhouse and cremery cheeses, not necessaily in a directly comparable sense, but more in terms of expecting different qualities to be present (or not). These data and the indicators above, therefore, give a useful insight into the relative performance of global and local chains, but should not be seen in isolation.
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5.6.4 Consumer behaviour (Social Dimension) There are four indicators associated with this attribute. These are: • Consumers use. • Taste preference. • Convenience. • Willingness to pay.
As set out in the introduction to this section, there is no graphical representation for this attribute. The data for this attribute and its associated indicators is drawn from a series of four focus groups. Two of these were with urban consumers and two with rural consumers. In each case, the participants were asked to make qualitative comparisons between the different food supply chains, as well as between different types of cheese. The results of the consumer focus groups have been comprehensively written up under section 5.4, above. As such, this section will be relatively short, picking up on some of the key findings and the relevance of the chosen indicators in terms of assessing the relative performance of global and local FSC. Each of the four attributes will be highlighted in turn.
Consumers use. It is clear that almost all consumers eat at least some cheese, with most of the focus group participants eating cheese at least 2-3 times a week. In this respect, consumers see cheese as a key staple ingredient in their diet. In this respect, mass produced cheese, such as block cheddar, is being used as an everyday food used mainly for cooking and making sandwiches. Artisan cheeses, on the other hand, are viewed more as 'luxury food' and a 'treat' for special occasions. In general, consumers are aware of the health issues related to the consumption of cheese, principally in relation to its fat content, but do not seem to be hugely influenced by this, except in a few cases. When buying cheese as a 'luxury food', a huge variety of cheese types are purchased. When talking about cheese as a luxury item, consumers generally thought of artisan cheeses, which were perceived to be of a 'better' taste and were to be eaten in moderation. Such cheeses were not considered suitable for small children, both in terms of taste and cost. In this respect, consumer use of cheese is to a very considerable extent determined by the make up of the family and everyday lived social practices. For example, those with young children will tend to buy greater quantities of mass produced cheese, rather than more expensive artisan cheeses.
In terms of consumer use, therefore, consumers did not tend to think in terms of local or global cheese, but rather in terms of everyday cheese and special cheese.
Taste preference. Most consumers at the focus groups preferred the taste of more mature cheddars, with mass produced mild cheddars generally not something they would buy for choice. Artisan cheeses in general were seen to be more tasty and something worth paying extra money for. Quality in this sense was seen as being related to the tastiness of the cheese. As above, there were no clear distinctions between global and local cheeses in terms of taste, with mature cheddar purchased through supermarkets being seen in a positive light, in the same way that artisan cheese is. For some of the consumers, taste was more important www.glamur.eu 90
than price, with those involved saying they would if necessary reduce the quantities they bought to ensure they could still afford better tasting cheese.
Convenience. While some of the consumers bought their cheese through delicatessen shops and farmers' markets, a large majority of the cheeses are purchased through supermarkets. This is primarily for convenience, as opposed to a more leisure-oriented pursuit of shopping at farmers' markets. Convenience and time efficiency were the two main reasons stated for buying at supermarkets, as well as a perception that the cheeses would be cheaper.
Convenience in relation to global and local cheese FSC was not usually related to the cheese itself, but rather to the scale of the retail outlet.
Willingness to pay. In general, cheese is recognised as being an expensive food, notwithstanding that there is a clear recognition that there are both mass produced cheeses and artisan cheeses. As mentioned above, the mass produced cheeses are perceived as an everyday food used mainly for cooking and making sandwiches. As such, people are unwilling to pay more than necessary for these cheeses which will usually be purchased in mainstream outlets, with people often expressing that they always try and buy those cheeses which are on special offer. Artisan cheeses, on the other hand, are recognised as being more for special occasions, such as Christmas or birthdays, and something worth paying more for. In this respect, the willingness to pay for cheese is closely related to perceived quality, or qualities.
As above, consumer behaviour in relation to willingness to pay for cheese does not split neatly between global and local cheese FSC. In some cases, it is clear that consumers do very much care about local, small-scale farming and do want to support local produce and produces. However, this is tempered by price and convenience, as well as by the make up of the families involved. A more definitive distinction than local or global, is between artisan or mass produced cheese, with people prepared to pay more for the former than the latter. In this respect, artisan cheese is not always equated with local, and certainly is often available in global outlets such as supermarkets.
Thinking in terms of the relative performance of global and local cheese FSC, it is difficult from the indicators above to be definitive about this; instead, it is possible to identify that there are differences in the way that cheese is used by people, divided principally in relation to the taste qualities of different cheeses which may or may not be the result of local or global food supply chain processes.
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5.6.5 Resource use (Environmental Dimension) There are three indicators associated with this attribute. Local Global Min. Av. Max Local Global Attribute Indicator performance performance b’k b’k b’k value value % % Soil improvement 0 5 4 2 80 40 practices Material Resource consumption 0 4 4 4 100 100 use practices Waste reduction 0 4 4 4 100 100 and disposal
With this attribute, there are no differences between the global and local cheese FSC in terms of two of the indicators -- 'material consumption practices' and 'waste reduction and disposal'. This is not to suggest that there aren't differences between the two different scales of operation rather that in relation to the constituents of these two indicators, both of the chains are performing equally well. In other words, the use of these two indicators has failed to help delineate the performance of global and local cheese chains. They simply show that assessed against a number of different parameters, both chains are performing as well as they can do in terms of 'material consumption practices' and 'waste reduction and disposal'.
In the case of the third indicator – ‘soil improvement practices’ - - the local FSC performs noticeably better than the global FSC. This suggests that local cheese FSCs pay more attention to the soils associated with the production of milk in their chains. The difference being that the local chain conformed to four out of five parameters set as part of this indicator, as opposed to two out of five in the case of the global FSC.
While this is clearly of some relevance, further information would be required before a detailed assessment could be made as to the relevant performance merits of the two FSC. This would include, for example, the on-farm impacts of the different approaches taken. www.glamur.eu 92
5.6.6 Biodiversity (Environmental Dimension) There are two indicators associated with this attribute. Local Global Min. Av. Max Local Global Attribute Indicator performance performance b’k b’k b’k value value % % Landscape management 0 4 4 4 100 100 Biodiversity practices Diversity of 0 4 1 1 20 20 production
In this case, the global and local performances are the same for each of the two indicators examined for the attribute of biodiversity. In the case of 'landscape management practices', both the local and global FSC scored 100%. This indicates that they both fulfilled each of the four different elements that were examined in relation to landscape management practices on the farms producing milk for each of the two different scales of FSC. These four different elements included the following: membership of agri- environmental schemes; presence of buffer zones; habitat management; and the presence of a systematic approach to biodiversity. This is certainly of interest in itself, but does not provide any insight or guidance in terms of whether local or global FSCs perform better in relation to ‘landscape management practices’, in that they both scored the same.
In the case of the second indicator - 'diversity of production' - both the local and global FSC have a low score. The categories used in this instance were: the number of crops in the rotation used; whether mixed cropping is practiced; the number of breeds of cattle in the dairy herd; and the extent to which crops, breeds or trees on the farm are rare/traditional and/or locally adapted in some way. As with the previous indicator, the fact that the two different scales scored the same means that it is difficult to make any kind of performance judgement between the two different chains.
While these graphs clearly demonstrate that both scales score well in terms of landscape management practices and poorly in terms of diversity of production, this is not the primary issue within the context of this work package. The primary aim is to try and establish whether there are significant/demonstrable performance differences between local and global cheese FSC. In simple scoring terms, this has not been achieved with this particular attribute through the use of these two indicators. It may still be possible to make www.glamur.eu 93
some kind of a performance judgement through examining in further detail the qualitative elements that were used in order to arrive at the performance scores used here.
The indicator scores and findings against the attribute of diversity demonstrate the importance of ensuring that quantitative indicator scores are supported through the use of context-specific qualitative judgements.
One of the key reasons for developing a system that can delineate between global and local FSC in terms of their performance, is to help consumers make better decisions about their food choices. In this respect, it is perhaps interesting that there are no discernible differences in performance between the two scales in relation to biodiversity, in that findings from the focus groups suggest that consumers are generally not interested in the on-farm production processes involved in cheese FSC. Indeed, one consumer (who clearly was aware that cows produce milk and that milk is the main constituent of cheese) had never made the connection between farms/farming and the cheese that he ate.
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5.6.7 Nutrition (Health Dimension) There are four indicators associated with this attribute. Local Global Min. Av. Max Local Global Attribute Indicator performance performance b’k b’k b’k value value % %
Salt content 1.5 0.4 1.74 1.76 39.20 38.18
Fat content 33.33 17.5 35 34 55.26 52.10 Nutrition Saturated 23.33 5 24.5 21.76 53.18 45.71 fat content Calcium 675 1200 740 739 12.38 12.19 content
In the case of the nutrition attribute, the scores for each of the four indicators are almost the same, with the only slight difference being in relation to 'saturated fat content'. In this respect, it may appear that assessing the relative performance of global and local cheese FSC in terms of 'nutrition' is somewhat fruitless; however, this would be misleading.
In terms of salt content, there are fairly tight parameters in terms of how much salt can be in cheese, ranging from about 1.5% to 2% dependent on the type of cheese. As stated elsewhere in the report, salt is a critical constituent of cheese, having a role in drawing moisture out of the curds, helping to ensure food safety and contributing to taste.
Having said that, one of the global cheesemakers interviewed as part of this research project has been developing a 'low salt' cheese, which uses a potassium substitute to lower the salt content by 30%. This is in response to society-wide pressures to reduce the salt content of food, in general. While this is not widespread within the industry, it does show that large-scale cheesemakers are thinking about reducing the salt levels of their cheese. Significantly, all of this lower salt cheese is sold into the catering industry, rather than being marketed in supermarkets or other retail outlets. Small scale, artisan cheesemakers, on the other hand, are adamant that they would never consider these sorts of changes to their cheese production process, seeing what they do as traditional and in no way unhealthy provided people do not consume overly large quantities of cheese. Clearly, these two different approaches suggest significant differences in the performances of the two different cheese FSC. It also begs the question as to which is the www.glamur.eu 95
healthier approach in terms of nutrition: the global FSC approach to reducing the salt content of their cheeses; or the local FSC approach which is to make more tasty cheeses which people will then eat in smaller quantities. In this respect, the quantity of cheese eaten cannot be divorced from its salt content; nor for that matter its fat content, saturated fat content or calcium content. In relation to the calcium content of cheese, both the global and local cheeses have essentially the same content, in that both require the same input of milk per kilogram of cheese produced.
Consumers recognise that cheese has the potential to be unhealthy if eaten to excess, although this was principally in relation to its fat content rather than its salt content. In this respect, it is worth commenting on the salt and fat content at the same time.
In terms of the acceptability of lower salt cheeses to the consumer, the focus groups suggested that consumers would rather not eat cheese that had been 'messed around with', except where they had particular health issues, such as heart issues. Similar comments were voiced by consumers in relation to global cheeses that were being marketed with a reduced fat content. There were suspicions about the resultant taste, as well as what had been added to the cheese in order to reduce its fat content and maintain its taste. These perceptions about the nutritional/taste qualities of cheese are very important in terms of assessing the respective performance of different FSC. In this respect, it is the particularities of the cheeses themselves rather than necessarily the FSC. Having said that, there is a clear divide between large-scale, global cheese producers who are actively considering changing how they make cheeses (in terms of reducing both fat and salt content) and smaller scale, artisan producers who feel that this is not the approach to take and that cheese is inherently a nutritious and healthy food product.
As highlighted in the consumer section above, consumers tend to eat a range of different cheeses, some of which are then used as the constituents of pizza or macaroni cheese, for example, and some eaten as a table cheese for a special occasion. Consumers also eat large quantities of cheese in processed foods, such as pizzas. This really is the key division in terms of how cheese can affect the health of people and the significance of its nutritional content.
As mentioned above, the key issue highlighted by small-scale, artisan producers, is in relation to the quantity of cheese eaten by consumers; furthermore, that consumers are likely to eat lower quantities of their cheese in that its superior taste qualities (in their view) mean that people's appetites are sated with lower quantities. In essence, they are arguing that cheese is a healthy and nutritious food, with high levels of calcium, protein and important fats, and that it only becomes unhealthy if people eat too much (the idea of everything in moderation).
It is important to note that many of the global cheese producers also produce high-quality cheeses (such as Stilton, for example), however, most of the lower-quality cheeses, such as bulk cheddars, are produced at a global scale. Likewise, relatively lower quality cheese that is produced for the catering industry is produced at a global scale, as are modifications to the salt and fat content of cheeses. www.glamur.eu 96
When seeking to judge the performance of different FSC in terms of the nutritional qualities of the cheeses involved, the figures displayed in the graph above would appear to suggest that there is not much difference. However, when analysing the data a little more deeply, it is possible to see that there are some quite meaningful distinctions between local, smaller scale, artisan cheeses and large-scale, global producers. Having said that, all global cheese producers cannot be considered as being the same, in that some globally produced cheese is comparable to locally produced cheese in terms of both its nutritional and indeed organoleptic qualities. A key issue to consider when judging the nutritional content of cheese and its relation to the health of consumers, is the quantities of cheese that are eaten by consumers. This, in turn, would appear to be influenced by the organoleptic qualities of the cheeses themselves, which is to some extent influenced by the scale of the FSC involved, as described above.
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5.6.8 Animal welfare (Ethical Dimension) There are three indicators associated with this attribute. Local Global Min. Av. Max Local Global Attribute Indicator performance performance b’k b’k b’k value value % % Animal 3 0.5 1.75 2.80 50 8 density Animal Lifetime of 3 10.5 8.5 7 73.33 53.33 welfare dairy cows Time spent 0 100 62.5 66 62.5 66 on pasture
It is clear that there are marked differences between the three indicators associated with this attribute. In the case of 'animal density', the local FSC performance score was 50%, compared to only 8% for the global FSC. In terms of the 'lifetime of dairy cows', the local FSC performance was nearly 75%, compare to just over 50% for the global FSC. In other words, both FSC scored quite well on this indicator, although the local FSC was considerably better than the global FSC. In the case of 'time spent on pasture', the performance of both chains was quite good, with the global chain slightly better than the local chain. For both 'animal density' and the 'lifetime of dairy cows', the performance is judged in relation to industry norms. In the case of 'time spent on pasture', the figures given are actual percentages of time. However, as with all the attributes, it is important to unpack what is meant by the figures ascribed to each of the individual indicators.
Animal density. Animal Welfare Attribute What this indicator shows is Animals that the numbers density of cattle per 100 given area is 75 much higher within 50 the global FSC LOCAL SCORE (%) than the local 25 FSC. This would 0 GLOBAL SCORE (%) suggest a greater intensity of Time lifetime farming methods. spent on of dairy This indication pasture cows would seem to be borne out by the perspectives of those interviewed, with the local FSC producers often emphasising that they do not push their animals harder than necessary. Their focus is on reducing the stress of their animals, thereby reducing the need for medical interventions and leading to better herd health. However, in terms of the performance of the respective FSC, this may not tell the whole story. More intensive herd managers will often stress that their animals receive very close www.glamur.eu 98
medical attention and that they are well looked after, albeit that they may not live as long and may require more medical interventions. To some extent, making a judgement as to which approach is better is a matter of opinion and perspective. Having said that, the density at which animals are kept is a valid assessment of the performance of individual FSC, in ethical terms, but should not be viewed in isolation. It may also be that although it is a valid performance assessment in ethical terms, it may not be in economic terms, in that economically it may make more sense to increase the stocking density of animals in order to improve the economic output per given area of land. In this latter scenario, it may be that it will then be necessary to accept that there will be higher medical bills and that cows will live shorter lifetimes, but that this is considered to be a worthwhile compromise.
Lifetime of dairy cows. Based on the above graph, cows tend to live longer in smaller, local FSC, when compared to global FSC. As suggested in the paragraph above, this may well be linked to the density at which cows are kept. However, the difference between global and local FSC performance against this indicator is not as significant as that shown for the density at which animals are kept. It is perhaps not unreasonable to make the assumption that cows that are worked more intensively will tend to live shorter productive lives; furthermore, that intensive production is more likely to be associated with global rather than local FSC. But this is currently the extent to which inferences can be drawn for this indicator. In order for more accurate conclusions to be drawn, it may well be necessary to have a larger range of indicators, each of which directly seeks to support the others, thereby enabling more accurate correlation as well as causation. In other words, simplifying the number of indicators for any given attribute necessarily means reducing the performance inferences that can be drawn from individual indicators and consequently attributes.
Time spent on pasture. Against this indicator, the performance of the global FSC was marginally better than the local FSC. In principle, the time cows spend on pasture rather than in housing can be understood as a positive in ethical terms. However, the quality of the housing needs to be understood, as well as the reasons why cows spend the percentage of time they do on pasture. In some instances, where cows spend all their time housed compared to a large percentage of their time out on pasture, the performance differences between two chains is fairly obvious. In reality, however, most instances will not be as striking as this. The evidence from this piece of research is that the reason for housing cows overwinter is principally due to the soil conditions on the farm, whereby if they were allowed onto the pasture overwinter they would badly poach the fields making them much less productive during the spring, summer and autumn months. In other words, the relatively small difference between global and local FSC shown above cannot realistically be understood as a significant guide to the relative performance of the FSC involved. Had the figures been 90% for global and 10% for local, or vice versa, then there would be a much stronger case for assessing the relative performance of the two scales of FSC.
As in all instances, it is vital to qualify the figure shown by the indicators for each attribute when seeking to assess the relative performance of (cheese in this instance) FSC.
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6. Discussion In this section we discuss the key findings from the results of our research and relate these, firstly, to points of distinction in performance between local and global FSCs. Secondly, we consider some of the methodological challenges linked to Glamur’s participatory and multi-dimensional approaches. Thirdly, a review of how our findings relate to the case study research questions is presented. 6.1 Key performance issues Table 7, below, presents some key performance distinctions between the global and local chains. These are examined in relation to the supply chain performance attributes outlined in section 4.1, above.
Table 7: Comparison of global and local performance by attribute in selected UK cheese supply chains Attribute Global (creamery) Local (farmhouse) Affordability Cheese is significantly less expensive than The relatively high retail price tends to farmhouse cheese due to the scale of reflect the qualities associated with production and access to mass markets. production and is regarded as an indicator of such. Low consumer prices are important for competitive position (CC1). A result of this Supply management is practiced, is that, while milk producers retain a high restricting market access to cheese and % of the share of the value of the cheese, maintaining a relatively high price. this is in relation to a lower selling price in comparison to the local chain. In some cases (SG2), cheese production is partially linked to the cheesemakers’ lifestyle choices. In most cases (esp. SG1, FC2) price is not regarded as negotiable. Creation and The bulk of the market lies within with Value is linked to the production ‘story’ – distribution of own-branded (i.e. budget) supermarket husbandry of cattle and local landscapes, added value cheese. Added value is realized via craft tradition, attention to specificities of branded and geographically-linked milk qualities. branding. In this sense cheeses compete internally within the same retail outlets. Milk price volatility is partially internalized where cheesemakers keep their own herds. Milk prices have fallen by a third over the research period, disadvantaging milk producers and benefitting consumers (via Domestic retail markets important, both falling energy prices). supermarket and independents, but as elements of mixed market channels. Wholesalers and exporters retain vital Reliance on domestic supermarket retail service roles. and increasing importance of food service. Information and Technical/nutritional information is clearly The cheese ‘story’ is communicated through communication communicated on standardized personal contact with consumers and packaging that is demanded by major wholesalers, via detailed web-site and retailers seeking to optimize consumer promotional material and presentation of information by conforming to regulations geographic/craft associations on labels. and voluntary measures. www.glamur.eu 100
Fewer technical/nutritional data present on There is very little ethical information for products if marketed outside supermarket own brand cheeses. retail. Craft networks support the adaptation of supply conformation for Support for UK producers notable, those supplying supermarkets. although with negligible use of PDO (CC1 exception). Opportunities for greater depth of communication, to fewer consumers.
In some cases (FC1, R4) supply chain communication is based on long-standing relationships and close mutual understanding. Consumer Consumer support for UK production may Gourmet cheeses to be savoured and behavior prove beneficial to farmers in the light of eaten as table cheese, in smaller quota removal. However, consumers quantities. exhibit shallow insights into wider chain performances. Inconsistencies between batches may be acceptable or desirable and an indicator Use of cheese as consistent, flexible of local/UK craft production. staple in cooking and as table cheese. Also as key constituent of some processed foods. Resource use Formal or informal resource use No formal strategies, although material strategies linked to cost-cutting and and energy consumption practices efficiency at milk supplier and recognized as key influence on cost. cheesemaker level. While input costs are, generally, rising16 Supermarket influence on the wider chain cheesemakers suggest that resource is evident in relation to packaging and efficiency (i.e. minimum input) is not environmental impact. significantly affected by increases or reductions in cheese production at this Technological innovations include pipe scale. coolers, energy generation and whey permeate filters (CC2). Similar picture to global in terms of energy generation and minimization of cheese Negligible post-production cheese waste. waste. Biodiversity Limited attention unless farmers have As creamery (except for special attention agri-environment scheme contracts. to habitat creation at FC2). Suggestions that farmers would like to do more but commercial factors are Smaller farmers receive agri-environment prioritised. Despite this, farmers identify payments which are marginal in relation to themselves with stewardship of the land. cheesemaking turnover. Nutrition Low fat and salt equivalents represent Cheese seen as a high quality food made key technological innovations at both according to tradition, and not to be eaten cheesemakers. as a staple or to excess.
Wealth of nutritional guidance material Minimal information on packaging. available from industry networks, including innovation awards. Animal welfare Positive attention reported in terms of As creamery, with particular attention to biosecurity, longevity and gentle breed for sake of geographical
16 Global oil and gas costs fell during the winter of 2014/15. www.glamur.eu 101
husbandry responding to the needs of distinctiveness (SG 1/2) and, in the case of individual animals. FC2, forage conversion efficiency.
Careful attention to breed in relation to milk solids content.
In Table 7, above, a number of distinctions between the global and local chains are captured. For example, price plays a crucial role in both chains, but reflects competitive positioning in the global, and cost of production in the local. The importance of multiple retailers in the chain is particularly important in terms of distribution of added value and resource use in the global chain. In terms of information, supermarket requirements seek to enhance transparency and are welcomed by consumers, but are not clearly understood by them. Uncertainty about the benefits of PDO labelling is an example of this, as the PDO has the potential to enhance quality perception in chains through geographical qualification (not always the case for cheddar), but is not universally recognized by consumers. Cheese appears as a staple food in the global chain, albeit within recommended dietary boundaries, while in the local it is more often a delicacy with hedonistic qualities and/or associated with authenticity and tradition.
Distinctions become blurred between the chains in terms of resource use and biodiversity. Firstly, both cheese types require the same types and relative quantities of inputs, and may therefore share suppliers who have developed supply chain specialisms such as traditional starters or industrially-produced rennet. Secondly, the prevalence of independent family ownership as the dominant dairying model applies to both scales and farmers tend, on the basis of our research, to see themselves as contributing positively to countryside and habitat management, although in practice most have to balance their environmental ambitions against commercial considerations. For larger farms with milk supply contracts, agri-environmental schemes may constitute a more significant income strand, and thus solidify ecological management, than for smaller, self-supplying cheesemakers. Efforts applied to waste efficiency, whey reclamation and energy generation bear little relation to scale per se, although different applications of high- or low-technology may apply, linked to capital cost. Both scales direct significant attention to cattle welfare and breed quality, although longevity, access to pasture and reliance on supplementary feeding is marginally better in the local chain, in the cases examined here. It is suggested that milk production for cheesemaking is associated with generally positive animal welfare, given the care devoted to nutrition, breed and milk composition.
Finally, a clear distinction arises in the perception of nutrition: for the global scale, fat and salt are nutritional hurdles which are being addressed through technological and practice innovation. CC1, in particular, seems to have pioneered cheeses which successfully combine low salt and fat content with authenticity of taste, at a rate of production that creates customer demand and competitor imitation. By contrast, the farmhouse sector is unwilling to compromise the traditional production methods of cheeses, suggesting that the qualities of their cheeses are to be enjoyed in moderation and that the idea of cheese as a low cost staple is a more serious threat to nutritional health than the consumption of cheese per se. Finally, because both scales share, broadly speaking, methods of production and basic ingredients, levels of dietary calcium are identical. www.glamur.eu 102
6.2 Methodological observations 6.2.1 Introduction A key methodological observation, based on the experience of developing attributes, indicators and benchmarks for comparing UK global-local cheese supply chains, is that there are some limitations in the approach beyond simply identifying attributes. This is because: (i) the UK team has struggled to access data of sufficient detail to accurately score performance in the ways envisaged by WP3 (i.e. so that scale comparisons become meaningful); and (ii) benchmarking has, necessarily, been adjusted towards national circumstances, making cross-country comparisons more difficult. One result of these issues was that agreeing, and then revising, the final indicator and benchmark scoring list with our Swiss colleagues has taken a long time.
Examples of this include: • no performance scores have been made in relation to the indicators linked to the attribute ‘consumer behaviour’, because judgements of such behaviours is reliant on the subjective values of individuals; • UK farmers at the farmhouse and creamery scales do not tend to have a detailed technical knowledge (rather, their knowledge is based on practice) of biodiversity and soil conservation on their farms, and land management may not be pursued specifically with biodiversity in mind, unless the farm is within an agri-environment scheme; • there is generally very little production waste associated with cheesemaking at either creamery or farmhouse scales; and, perhaps most significantly • creamery-scale firms are highly reluctant to share commercial data.
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6.2.2 Participatory approach The participatory approach has been useful, although not as fully integrated into our case study research as might ideally have been envisaged. Nevertheless, throughout the Quickscan research, as well as in the case study research itself, we have consulted closely with the British Cheese Board (BCB - who are the key stakeholder in the cheese industry), as well as interviewing and communicating with others in the industry. The BCB’s advice is clearly evident in the conceptualization of global-local differences as a farmhouse- creamery continuum.
However, we have experienced repeated difficulties in securing research engagement beyond BCB; for example, farmers’ representatives, large-scale dairies, state actors and some specialist technical or industry bodies have not felt able (or been sufficiently interested) in helping to plan the research to the extent we would have liked, although some communications have been possible. The offer to share consumer data with industry actors has prompted some interest, which may still be exploited in a participatory stakeholder workshop(s) that is planned for April 2015, as part of WP5.
6.2.3 Multi-criteria nature of Glamur The UK cheese study has attempted to cover eight attributes, distributed across the five dimensions. On reflection, it might have been better to agree three or four attributes for data collection / chain comparison, in that it has proved difficult to get agreement on eight attributes between the UK and Switzerland. This is not a criticism of either team, simply that the issues in the two countries, in relation to cheese supply chains, are quite different. This has created complications within the context of WP3, but will provide fruitful grounds for comparison within WP4. Due to these complications, it is likely that the cross-country comparison within WP4 will focus on three or four attributes, where the data are most comparable between the two countries.
As a more general reflection, we suggest that the multi-criteria emphasis on which Glamur is based is ambitious. This became clear in the qualitative interviews, which sought to capture a wide range of data making some of the interviews very long. While many of the interviews revealed valuable information, the scope and number of questions created time-concerns among interviewees, as well as creating challenges for interviewees to find the relevant data, or even dissuading some actors from participating at all. Data collection linked to ‘resource use’ and ‘biodiversity’ proved especially time-consuming, even though these are not priority attributes for the UK (cf. section 3.1).
6.3 Policy Where the policy agenda in the UK is linked to food chain performance, it is currently dominated by factors linked to economic recovery. This is evident in rural policy that emphasises growth and job creation, urban policy that supports infrastructural development and limited city-regional governance, and trade policy that seeks to position the UK as a competitive contributor to global food security through the export of innovation and high quality food (see WP2).
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Policy has the potential to provide both opportunities for food supply chains, but also some challenges. In particular, the quality and traditions associated with UK cheese are creating commercial opportunities, especially for cheddar producers at both a local and global scales to increase exports. Conversely, global milk surplus, as well as the imminent deregulation of EU milk quotas, is already creating milk price volatility. Some smaller cheesemakers are recognizing opportunities for commercial innovation which could allow shared practice between cheesemakers and help dairy farmers move into cheese production. At the creamery scale, technological innovation designed to cut resource use costs and increase production outputs are being introduced. In other words, EU competition policy will play out differently in each scale.
Also linked to technological innovation, public health concerns about obesity, acquired diabetes and public food, have informed the development of new cheese products in the creamery sector, and the proliferation of information about the dietary contributions made by eating cheese.
6.4 Case study research questions Having presented and discussed key points from our empirical data, this section reviews the extent to which the case study research questions, as outlined in section 3.1, have been addressed. We restate the questions below, for ease of reference:
(i) What are the supply chain arrangements for producers across the global-local continuum (which incorporates both ‘farmhouse’ and ‘creamery’ producers) in the UK, including their geography, market concentration and nature of upstream and downstream relations? (ii) What key food chain performance issues can be identified from a production perspective (cheese making and dependent upstream supply chain)? (iii) What are the main consumer understandings of food chain performance in relation to cheese buying, including affordability issues, the role of information and communication and the importance of the provenance of the cheese they are buying? (iv) What consumer behaviours and practices are evident in relation to cheese buying and cooking, including both health and nutritional issues?
In table 8, below, the research questions are synthetically presented in relation to key findings together with links to research evidence.
Table 8: Research questions and key findings from research evidence
Question Findings Evidence Producer Upstream supply chains are significantly Both farmhouse and creameries share supply chain hybridized, rather than conforming to local- aspects of multi-scale sourcing (e.g. rennet, arrangements global binaries (in essence, both are part of salt; dependent on local or regional milk www.glamur.eu 105
the one food system). pools originating from family farms).
Diverse routes to market appear at both Creamery chains are reliant on access to scales, with differential integration between national supermarket customers. Larger scales in wholesale and supermarket chains. farmhouse producers benefit from access to regional and to a lesser extent national retail markets. Smaller farmhouse chains rely more on specialist wholesalers, farm shops and direct marketing.
Production There are significantly different commercial Farmhouse producers have limited outputs, performance objectives at each scale, due mainly to the meaning that they have no problems volumes of production. selling all that they produce at a price that they set. Creameries, on the other hand, exhibit highly specialized production efficiencies in order to minimize production costs and remain competitive in a highly price-sensitive market.
Both scales perform well in terms of waste. In terms of reducing waste, farmhouse producers use low and medium-tech methods such as whey cream recovery and feeding whey to other livestock, such as pigs. Creameries also make cream, particularly as a low-fat cheese by- product, and employ high-tech permeate production for sale in various manufacturing sectors. Nevertheless, they face stiff price competition in both the national / global fresh cream markets.
Both scales emphasise the importance of milk Cheesemaking relies on certain milk composition, although different producer qualities, such as protein levels, that are constructions of quality are evident. managed by feed and husbandry practices. Some farmhouse producers seek to optimize animal nutrition through holistic grassland management, selective breeding and closed feed regimes. This is less pronounced in creamery chains, although milk suppliers benefit from the agronomic expertise some creamery makers use to standardize milk quality.
Place has an important bearing on Although PDO/PGI labels offer formal interpretations of production quality. certifications of geographical production quality, not all farmhouse cheeses carry PDO status, and some creamery-produced cheddars do. Other geographical proxies for quality include associations with a region (the West Country: cheddar), a county (Gloucestershire: Single Gloucester) and the nation (the UK: cheddar exports). Consumer Consumer understanding is a reflection of the In general, consumers are unaware of the understandings complexities of food supply chains and production processes involved in getting of food chain reveals different methods of trust-building. cheese to the point of sale. Nevertheless, www.glamur.eu 106
performance some consumers clearly value cheese that comes from particular territories or places of production; notwithstanding that there is minimal recognition amongst consumers of regulated definitions of territory, such as PDO.
Product information and labeling is Many consumers appreciate guidance important, although valued differently when facing a wide range of product choices, even if they are not always aware of the meaning of all the information contained on labels. In this respect, labels can both inform and influence consumer choice, even when price is a key purchase motivation. In farmhouse retail settings, such written data is more limited, with most information being gleaned from conversations with the cheese producers themselves.
Price remains a key purchase influence It is apparent that nearly all consumers eat some cheese. Cheese is either seen as an everyday ingredient that is used in making such dishes as macaroni cheese, or in processed foods such as pizzas, or as a treat that is eaten on more special occasions. In the former case, consumers are evidently very price sensitive; whereas in the latter, they are still conscious of price but are prepared to pay more for the cheese they buy. Consumer The nutritional distinctions exhibited in Consumers are generally aware that behaviours production stages are less clear in relation to cheese is a food high in fat, in some cases and practices consumers. realising that they should perhaps eat less cheese. Consumers seem to generally buy lower quantities of high-quality (usually defined in terms of taste) cheese, whether this be from creamery or farmhouse producers. Some creamery producers are now making lower fat and salt varieties of cheese, but these are generally associated with organoleptic compromises by consumers, who perceive that such cheeses will not taste as good. There is also scepticism amongst consumers about the manufacturing processes involved in reducing fat and salt, and the substitutes that are used.
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7. Conclusions This report, which constitutes deliverable D3.2, presents data relating to the performance of local and global cheese supply chains in the UK. It is one of six pairs-of-pairs of food commodity supply chain studies within Glamur WP3, and has been carried out in close co- operation with our Swiss partners. While the collaboration will extend to a cross-national comparison in WP4, including a more detailed explanation of performance using radar graphics, this report serves to identify distinctions between local and global performance in the UK.
Performance has been assessed according to the five dimensions which underpin Glamur, and in relation to eight attributes that have been mutually agreed with the Swiss team. These eight are drawn from the 24 attributes identified in the multi-criteria matrix developed within WP2, deliverable D2.3. In order to examine these attributes, a range of common indicators of performance have been outlined.
7.1 Issues in local/global Our initial conclusion is to re-iterate the suggestion, as expressed in Section 2.1, that in some ways it is unhelpful to perceive the UK cheese chain as having a local-global binary. There is clear evidence to suggest multiple overlaps between the farmhouse and creamery chains. Having said that, some distinctions are evident in the structure of the UK retail market and cheese consumption practices, for example: • The role of the supermarket retailer remains that of dominant market gatekeeper in the global chain, while in the local chain wholesaling and direct selling are vital elements of blended marketing strategies. • UK consumers indicate a distinction between staple, everyday cheeses purchased on the basis of price (global), and cheeses for special occasions (local); supermarkets have responded by offering wide array of both types, but independent retailers and farmers’ markets remain important market channels for territorially distinctive, artisan cheese associated with farmhouse production. • Geographical labelling is recognised as being of some benefit to producers at both scales, but is not clearly understood by consumers at either scale; nevertheless, many consumers are prepared to ‘buy British’ and ‘buy local’. • Nutritional challenges apply predominantly within the global scale, being associated with lower-priced cheeses that are likely to be consumed in greater quantities – often as part of processed foods such as pizzas.
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From the perspective of milk producers (farmers), our limited data lead us to suggest that: • Animal welfare and milk supply aimed towards cheese production are positively linked, especially in the local chain where milk specificities are vital to cheese quality. • Downward pressures on milk price are likely to affect creamery suppliers more that farmhouse suppliers, because the latter tend to diffuse their marketing; or, if the latter do make their own cheese, because they are better able to communicate the qualities of their cheese at an adequate scale to attract custom from those who can afford the relatively higher prices of their cheese. By contrast, creamery producers have indicated a reliance on price-sensitive, global markets for bulk, unqualified cheese, and non-cheese by-products • Neither policy nor market incentives are currently adequate to support farmers who wish to do more to protect biodiversity.
7.2 Contextual influence As suggested throughout the report, and especially in Sections 4 and 6, it is extremely important to understand the context within which both local and global food chains are operating, in order to better understand their performance. In particular, we have highlighted structural issues, such as the profile of dairy farming, the specialization of input supplies, and the important influence that supermarket retailers exert on the way in which supply chains are organized and regulated. These factors serve both to highlight local- global distinctions - such as the importance of third party wholesalers and direct trading in the local chain, compared to the global - and to blur distinctions such as the practice of drawing milk from sub-regional, if not local, pools.
Cultural contexts have also emerged, including, for example, the importance of price and convenience for most consumers in determining which cheeses they buy, and a generally faint level of interest in/knowledge of the production aspects of cheese. The consumers encountered in our research also revealed an eclectic taste for cheeses, including strong interest in traditional UK varieties alongside habitual purchases of cheeses with foreign production origins. Such practices make it more challenging to delineate clear local and global differences in terms of performance.
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7.3 Final concluding comments 7.3.1 Linking performance to global/local characteristics A key tenet of the GLAMUR project is to examine and compare the performance of local and global FSC -- within this case study, in terms of cheese FSC. However, it is apparent from the analysis above that this may not always be the most appropriate comparison metric. Certainly, there are instances where the performances of global and local FSC are very different and distinctive: for example, that 'own label' block Cheddar is the product of global FSC and has very particular performance characteristics; similarly, small-scale artisan cheeses are almost certainly the product of local FSC and again it is possible to identify particular performance characteristics. It may also be possible, in general terms, to suggest that cheese produced in local chains is more expensive than that produced in global chains. There is also an inherent difference of scale between global and local FSC, with global FSC associated with large-scale cheese production which is then used directly by large-scale caterers and/or retailed through large-scale outlets. Local FSC on the other hand tends to be associated with small-scale cheese production, generally of an artisan nature, that is usually sold either directly to the end consumer or through relatively small-scale outlets such as delicatessen shops or farmers' markets.
These characteristics are important distinguishing factors but they are also by now quite well known. Despite the above, there are certainly instances where small-scale producers market their cheese through large-scale retail outlets. Small-scale producers also source some of their ingredients from global markets, such as rennet and starters. Correspondingly, in quantitative terms 'top end/high-quality' cheese, such as Stilton, is produced in global FSC and yet has many of the qualities of small-scale, artisan cheese production. Small-scale producers will often make linkages to the provenance of production, but so too do large-scale producers on occasions. Similarly, both global and local cheese FSC may have PDO status.
In other words, as set out at the beginning of this report, it may be that a more appropriate distinction between different types of cheese FSC is on the basis of their scale of operation, rather than necessarily whether they can be described as global or local. This report suggests that a useful distinction can be made in terms of 'creamery' or 'farmhouse' production.
7.3.2 The importance of 'quality' when assessing performance It is apparent from the research that underpins this report that the quality, or 'qualities' of a particular cheese product is critical in terms of consumers' assessment of the products they are proposing to buy. Consumers surveyed for this project do not tend to think in terms of global or local cheese, simply cheese; having said that, consumers clearly recognise that cheeses are not all the same and that they buy different cheeses for different purposes, each of which has different and distinctive qualities. Distinctions are made, for example, between everyday cheeses, which are usually bought on price, and those cheeses that are eaten on more special occasions, where price is still a factor, but more critically the taste properties of the cheeses are important. Wider, non-product www.glamur.eu 110
specific qualities, such as supporting local milk and cheese producers are also a factor for some consumers. While some direct links can be made between the quality of particular cheeses and whether they are from local or global FSC, as described above this is not always so straightforward in that high-quality cheese is certainly produced in global FSC and marketed for similar prices to high-quality cheeses produced through local FSC.
7.3.3 Qualifying ‘nutritional benefits’ Assessing the performance of FSC on the basis of the nutritional qualities associated with their products has the potential to be quite misleading. At one level, global FSC cheese might be considered healthier and more nutritionally beneficial than local FSC cheese, in that lower fat and lower salt varieties are available. However, this tells only part of the story. Consumers, for example, are sceptical of what processes have been undertaken in order to allow manufacturers to make lower salt and lower fat varieties; they are also often sceptical of the resultant taste properties of the cheeses.
Smaller scale, artisan cheese producers in particular are adamant that cheese is inherently a highly nutritious and healthy food product, providing protein, calcium and essential fats and so on. Their argument is that people should not eat too much cheese, rather than change its constituents. The idea of quantity is also mirrored in consumer choices, wherein cheaper, non-descript varieties such as block Cheddar/supermarket own label cheese is often eaten in greater quantities than 'tastier' cheese varieties. The latter are often associated with small-scale producers (notwithstanding that in reality many 'tastier' cheeses are also produced by large-scale global producers), where higher prices and taste mean that consumers eat less cheese. From this perspective, cheese can be seen as a nutritionally beneficial food when eaten in moderation and as part of a wider, balanced diet.
7.3.4 The choice of indicators Within this piece of research, a relatively small number of indicators was used per attribute. With hindsight, it is apparent that in order to accurately assess the performance of particular FSC, it is necessary to have a wide range of indicators and that it would have been better to have examined fewer attributes, but from the perspective of more indicators. This approach would then allow for a greater degree of correlation and subsequently causality in relation to the performance of individual FSC. This issue will be revisited in WP4.
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8. References Berlin, J. (2002) Life Cycle Assessment (LCA) of Swedish Semi-hard Cheese. International Dairy Journal. Vol 12, Iss. 11, pp. 939-53. Blundel, R. (2002) Network evolution and the growth of artisanal firms. Entrepreneurship and Regional Development. Vol. 14, Iss. 1, pp. 1-30. Buller, H. and Morris, C. (2003) Farm Animal Welfare: A New Repertoire of Nature-Society Relations or Modernism Re-embedded? Sociologia Ruralis. Vol. 43, Iss. 3, pp. 216-237. British Cheese Board (April 2010). Cheese Facts. BCB, London. Davidson, A. (1999) The Oxford Companion to Food. Oxford University Press, Oxford. DairyCo www.dairyco.org Food Standards Agency (undated) Consumer Guide on Country of Origin Information on Food Labels. Guidance FSA S003/3000/0612. FSA, Aberdeen. Frewer, H., Howard, C., Hedderley, D. and Sheperd, R. Consumer attitudes towards different food-processing technologies used in cheese production—The influence of consumer benefit. Food Quality and Preference, Vol. 8, Iss. 4, pp. 271-80. Gonzales-Garcia, S., Hspidio, A., Moreira, M T, Feijoo, G. and Arroja, L. (2013) Environmental Life-Cycle Analysis in a Galician Cheese: San Simon da Costa. Journal of Cleaner Production. Vol 52, pp. 252-62. Hartley, D. (1954/1999) Food in England. Little, Brown and Company, London. Hort, J. and Le Grys, G. (2001) Developments in the textural and rheological properties of UK cheddar cheese during ripening. International Dairy Journal. Vol. 11, pp. 475-481. Ilbery, B., Watts, D., Simpson, S. Little, R. (2006). Mapping local foods: evidence from two English regions. British Food Journal. Vol. 108, Iss. 3, pp. 213-225 Kirwan, J. and Morris, C. (2010) Food commodities, geographical knowledges and the reconnection of production and consumption: The case of naturally embedded food products. Geoforum Vol. 41, Iss. 1, pp. 131-143. Linford, J. (2008) Great British Cheeses. Dorling Kindersley, London. Muir, D., Banks, J., Hunter, E. (1997) A comparison of the flavour and texture of Cheddar cheese of factory or farmhouse origin. International Dairy Journal. Vol, 7, Iss. 6-7, pp. 479- 485. National Farmers’ Union (2012) Compete to Grow: A vision and strategy for the British dairy industry. NFU, Stoneleigh. Rance, P. (1986) The Great British Cheese Book, 2nd Edition. Papermac, London. Rippon, M. (2014) What is the geography of Geographical Indications? Place, production methods and Protected Food Names. Area. Doi: 10.1111/area.12085., pp. 1-9. Tregear, A. (2001) OLP Sector in the United Kingdom. DOLPHINS Contract QLK5-2000- 00593. University of Newcastle upon Tyne. www.glamur.eu 112
Tregear, A., Arfini, F., Belletti, G., Marescotti, A. (2007) Regional foods and rural development: The role of product qualification. Journal of Rural Studies. Vol. 23, Iss. 1, pp. 12-22 Walker, H. (1995) Disappearing Foods: Studies in Foods and Dishes at Risk: Proceedings of the Oxford Symposium on Food and Cookery 1994. Prospect Books, Totnes. West, H (2008) Food fears and raw-milk cheese. Appetite, Vol. 51, Iss. 1, pp. 25-29. Young, N., Drake, M., Lopetcharat, K. and Daniel, M. (2004) Preference Mapping of Cheddar Cheese with Varying Maturity Levels. Journal of Dairy Science. Vol. 87, Iss. 1, pp. 11-19.
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