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Cheese
Market, Supplier, Risk and
Competitive Intelligence

Manage Cheese Category with Ai powered
Procurement Productivity Suite

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Abi will answer all Cheese related
procurement queries with relevant data points

Abi - AI powered digital procurement assistant

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Get up-to-date market and supplier info on Cheese to help you build

Intelligence covers market and price outlook, SWOT analysis, demand & supply drivers, engagement models and Procurement best practices

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Intelligence on category covers the following aspects market outlook, supply market, SWOT analysis, Cost components & Price outlook, Demand and supply drivers, Engagement Models and Procurement Best Practices

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Assess Supplier Risk based on key risk and compliance parameters

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Supplier assessment covers the following parameters Financial Risk, Ethical, Labor, Environmental Compliance, IT Security.

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Supplier assessment is powered by world’s leading data partners including D&B, CreditSafe, Dow Jones, Refinitiv, Orpheus

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Identify right fit suppliers based on your selection criteria including revenue, capabilities, certification, geography

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Select suppliers based on industry, country, classification from a database of 4.2 mn suppliers. Get detailed supplier profiles with supplier capabilities, revenue, certifications, risk ratings

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Benchmark your category performance against peers and the market

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Measure category performance on 15 key parameters across cost, risk and strategy KPIs

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Get information on key factors affecting your supply

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Source Macro Data and Market Indices information from leading data sources across these key areas - Labor Rates, Currency, Energy, Country Risk, Trade Flow/Transportation, Port Data, Tariff, Weather and Epidemics

meet-abi-1

Abi will answer all Cheese related
procurement queries with relevant data points

Abi - AI powered digital procurement assistant

discover-market-info

Get up-to-date market and supplier info on Cheese to help you build

Intelligence covers market and price outlook, SWOT analysis, demand & supply drivers, engagement models and Procurement best practices

1

Intelligence on category covers the following aspects market outlook, supply market, SWOT analysis, Cost components & Price outlook, Demand and supply drivers, Engagement Models and Procurement Best Practices

manage-risk

Assess Supplier Risk based on key risk and compliance parameters

1

Supplier assessment covers the following parameters Financial Risk, Ethical, Labor, Environmental Compliance, IT Security.

2

Supplier assessment is powered by world’s leading data partners including D&B, CreditSafe, Dow Jones, Refinitiv, Orpheus

discover-supplier

Identify right fit suppliers based on your selection criteria including revenue, capabilities, certification, geography

1

Select suppliers based on industry, country, classification from a database of 4.2 mn suppliers. Get detailed supplier profiles with supplier capabilities, revenue, certifications, risk ratings

assess-category-perforamnce

Benchmark your category performance against peers and the market

1

Measure category performance on 15 key parameters across cost, risk and strategy KPIs

source-market-indices

Get information on key factors affecting your supply

1

Source Macro Data and Market Indices information from leading data sources across these key areas - Labor Rates, Currency, Energy, Country Risk, Trade Flow/Transportation, Port Data, Tariff, Weather and Epidemics

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Report Coverage

  • Value Chain Analytics
  • Global Market Analysis
  • Cost and Price Analysis
  • Procurement Strategies

Table of Contents

  1. Executive Summary
  2. Summary of the Key Highlights
  3. COVID-19 Impact
  1. Value Chain Analysis
  2. Dairy Derivatives: Value Chain
  3. Cheese : Value Chain
  4. Production and Manufacturing Technology
  1. Global Market Analysis
  2. Supply–Demand analysis
  3. Trade Dynamics
  1. Regional Market Analysis
  2. North America
  3. Europe
  4. Asia
  5. Oceania
  1. Industry Analysis
  2. Porter’s Five Forces Analysis
  3. Impact of Macroeconomic Factors on Procurement
  1. Cost and Price Analysis
  2. Cost Structure Analysis
  3. Price Trend Analysis
  1. Impact of Brexit
  2. Trading Relationships and UK’s Import Dependency
  3. Supplier Base
  4. Price Movements
  1. Cheese Market Dynamics
  2. Cheese Supply market
  3. Procurement Strategies
  1. Purchasing Process
  2. RFP/RFI Questionnaire

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Cheese Global Market Outlook:

  • The global supply–demand dynamics scenario is stabilizing in both milk and dairy derivatives, as the oversupplied condition in the market is lightening. The regional differences and skewed trade dynamics are expected to govern the global price volatility in the near term
  • Oceania is a key market, as it produces only 5 percent of the global milk, but contributes to more than 40 percent of the milk derivatives export market

Demand Analysis

  • The global cheese landscape is dominated by the top EU and U.S. regions, accounting for nearly 80 percent of the production share
  • The market is oversupplied by 0.8MMT with production growing at a CAGR of 2.18 percent against consumption at 2
    percent

Cost and Price Analysis

  • Raw material is the key cost factor (47-52 percent), in cheese and butter production. Since whey is a by-product of cheese and casein, no raw material cost is calculated to it. The profit margin of producing derivatives is 30 percent, which is higher than that of milk powders (~15 percent). Thus major producing regions, concentrate more on butter and cheese.
  • Even though the prices dipped in April 2020 owing to COVID-19 pandemic concerns, the market recovered quickly. Considering the steady demand, the prices are likely to trade higher and the trend is likely to continue throughout 2021.

Key factors tracked for pricing estimations:

  • Total annual production, capacity utilization, cost components (fixed cost, operating cost. overhead cost), and profit margins.
  • The potential impact of Brexit on dairy derivatives includes major reduction in Foreign Direct Investment (FDI), reduced demand for dairy products from the major oil producing countries, Ireland shifting from the UK market and opening up opportunities for countries, like India, increasing business & trade costs for major suppliers, like Arla, and fall of international dairy derivative prices.

Volatility and Profitability in the Cheese Industry

  • The CME trade in the U.S., GDT auction in Oceania, and European milk future systems have increased commoditization and volatility in cheese prices. The end product-based pricing leads to volatilility and decreased profit margins for processors
  • A suitable hedging option could help the category managers overcome volatility and margin issues in supplier engagements

Porter’s Five Forces Analysis

  • The market volatility opens opportunities for dairy farmers in India, Russia, Ukraine, China, and Brazil to increase efficiency of production
  • Major suppliers are integrated to dairy farm level and companies like Fonterra and Amul, are secured through the co-operative models
  • Significant threat exists if major suppliers co-operatives cannot make competitive milk pay-outs to shareholder suppliers

CheeseMarket Frequently Asked Questions

  1. What are the critical factors determining cheese pricing?
  2. The key factors that determine the pricing for cheese include: > Capacity utilization > Overall annual yield > Cost components (operating cost, fixed cost, and overhead cost) > Profit margins
  1. How does the global cheese market look?
  2. The global cheese market is witnessing a surplus of 0.8 million metric tons (MMT), with production and consumption growing at nearly identical CAGR. The European Union (EU) and the US, making up for around 4/5 of the overall yield, are the prominent cheese producers.
  1. Why do key producing regions focus more on cheese and butter?
  2. The profit margin of producing milk derivatives is 30%, which is greater than that of milk powders – around 15%. Moreover, whey production does not include raw material costs as it is a by-product of casein and cheese. As such, market players are increasing their focus on butter and cheese.
  1. What challenges do the cheese market players currently face?
  2. The GDT auction in Oceania, the CME trade in the US, and the European milk future systems have increased the volatility in the cheese prices. As such, the end product-based pricing results in fluctuations, hitting the revenue pools of the processors.
  1. What tactics are cheese producers following to overcome the existing hurdles?
  2. Prominent cheese suppliers are integrating into the dairy farm level, and companies, including Amul and Fonterra, are secured via the collaborative models. However, the suppliers are still subject to potential risks if their collaborative models fail to make competitive milk pay-outs to stakeholder suppliers.
  1. How can Brexit impact the global cheese market?
  2. The probable impacts of Brexit on dairy derivatives, including cheese, are as follows: > Decreased demand for dairy products from the key oil-producing countries > Significant reduction in the Foreign Direct Investment (FDI) > Ireland shifting from the UK market to emerging regions, such as India > Escalating trade costs for prominent suppliers > Dip of international dairy derivative prices

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