The Cheese Industry in Ontario

• Economic Status of the Ontario Cheese Industry
• The Regulatory Environment
• Business Models
• Types of Cheeses Produced
• Marketing Opportunities

Economic Status of the Ontario Cheese Industry

In 2008, Canada produced 396,363 tonnes of cheese – this total includes cheddar cheese, variety cheese and cottage cheese. Canada’s main export market is the United States - Canada shipped 4,205 tonnes across the border in 2008. The same year, Canada imported 25,649 tonnes of cheese, mainly from the U.S., France and Italy.

Specialty cheese production trends in Canada are positive. Between 2000 and 2008, national production rose 10.4 per cent to 222,035 tonnes. During that period, Ontario production rose 9.7% to 63,065 tonnes.

Ontario produced 28.4 per cent of Canada’s specialty cheese in 2008, while Quebec continued to account for the lion’s share — 61.5 per cent. Overall, 119,389 tonnes of cheese were produced in Ontario in 2008 - this total includes cheddar cheese, variety cheese and cottage cheese.

Regulatory Environment

Ontario’s dairy industry is highly regulated, both federally and provincially. The supply of raw cow milk is limited and tightly controlled, although goat and sheep milk production does not operate under a supply management system.

To make cheese from cow’s or goat’s milk, your plant must be licensed by the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA). Cheesemaking with milk from species other than cows or goats is regulated as a food premise by local public health units.

Each licensed cheesemaking plant receives at least one full, in-depth inspection each year. The Canadian Food Inspection Agency may sample the finished product to confirm it complies with food safety and quality standards and to detect unfair marketing practices.

Labelling and packaging is regulated by the Food and Drug Act, which is enforced by the Canadian Food Inspection Agency.

Business Models

Four large companies dominated the Canadian cheese market in 2004/05, according to Agriculture and Agri-Food Canada’s Dairy Processing in Canada: Saputo Inc., Kraft Canada Inc., Agropur Cooperative Ltd. and Parmalat Canada Ltd.

There are 200 artisanal cheese producers in Canada, mainly in Quebec, but a number of artisanal cheese businesses have been launched in Ontario in recent years. According to a market evaluation commissioned by Cressy Gourmet Investments, 10 per cent of the cheese produced in Ontario in 2003 was artisanal.

Types of Cheeses Produced

Canada produces more than 450 different cheeses. The Canadian Dairy Information Centre maintains a searchable Canadian Cheese Directory and publishes statistics on cheese production. Cheddar accounted for the biggest slice of Canadian cheese production across the country in 2007, followed by mozzarella, cream cheese and cottage cheese.

Canada’s dairy processing industry is based primarily on cow’s milk, but goat and sheep cheese production are increasing. Some of the strongest growing retail categories are specialty cheese.

Marketing Opportunities

Agriculture and Agri-Food Canada’s Household Food Expenditures in Canada: Cheese offers detailed statistics on retail trends. The average quantity of cheese purchased was 0.41 kg in 2001. This was a slight decrease from 1996, but the average weekly expenditure increased by 19.5 per cent over that period to $4.34. Likewise, specialty cheese purchases dropped from 163 g to 139 g, but expenditures increased by 28 per cent.

According to the report, women are more likely to purchase specialty cheeses than men are. People with more education and higher incomes are also more likely to buy specialty cheese.

ACNielsen’s MarketTrack also reported an eight per cent increase in the volume of pre-packaged specialty cheeses sold in Canada between 2004 and 2005, coupled with an 11 per cent increase in sales revenues.

Canadian cheese consumption rose to 11.97 per person per year in 2004, part of positive trend over the past couple of decades. Specialty cheese accounted for 7.36 kg.

Demand for goat cheese is growing. Imports surged between 1996 and 2002, according to Agriculture and Agri-Food Canada’s Canadian Dairy Goat Industry Profile, while Ontario’s goat industry – the largest in the country – has been expanding continuously. The Ontario Goat Milk Producers Association estimates at least 12 million litres of goat’s milk were processed in 2004, with about 75 per cent going to cheese production.

Several Ontario cheese manufacturers make sheep’s milk cheeses and other products. Over the past five years, we have seen an increase in the number of new sheep cheesemakers entering the market, as well as in the number of varieties of cheese made in the province by small processors. Ontario has one commercial facility that produces sheep cheeses on a fairly significant scale.

For more information on Ontario’s cheese industry, contact OMAFRA’s Business Development Branch.