Parmesan cheese from Italy is finding favor in China after 10 years of promotion. Daniele MattiolI / for China Daily

A newly developed taste among Chinese for an age-old food leaves European businesses smiling

For Han Jin it was anything but love at first bite. But a relationship that began with dislike bordering on revulsion has turned into what now looks like a lifelong passion.

And like Han, many other Chinese are discovering that as a palate partner, cheese is hard to go past. That, in turn has whet the appetite of cheese producers worldwide.

Until four years ago all Han knew about cheese was sweet-flavored milk extract produced in the Inner Mongolia autonomous region. In fact, when he took his first bite of Italian Parmesan cheese he almost vomited, he says.

Perhaps that is not all that surprising, given that unlike in Europe, where cheese is routinely dished up at the breakfast, lunch or dinner table, it is relatively new to China. But things are changing.

"The nation's consumption of cheese is growing at an incredible pace," says Han, general manager of Shanghai Roria Trading Co, a local distributor of imported food.

"Both foreign producers and domestic dairy giants are sending positive signals. More foreign brands want to come in, and sales are growing quickly."

China's cheese imports totaled $139 million (106.5 million euros) last year, a third more than the previous year, and more than double what they were in 2009, the Italian Trade Commission says.

Together, New Zealand, the United States and Australia accounted for more than 80 percent of the imports last year, but standing next to them in line, accounting for a total of about 13 percent, were five European countries: France, Italy, Denmark, the Netherlands and Germany.

As for Han's company, it sold about 100 metric tons of imported cheese last year, more than double what it sold the previous year.

Entrepinares SAU of Spain and Parmalat SpA of Italy, both dairy giants in their own countries and globally, have been working with Roria. In the past year Parmalat's sales in China have more than doubled.

With those kinds of sales successes in mind, food distributors and importers in China, seeing the huge market potential, are also looking at importing more dairy products.

This is all being given a push along by Chinese people's increasing exposure to cheese thanks to the inexorable expansion of fast-food chains such as Pizza Hut and McDonald's, with their cheese-laden fare. In addition, as more bars, cafes, bakeries, and high-class Western restaurants and hotels open in China, more people are adapting to a wider range of tastes.

Leo Liu, a cheese trader who runs an online store on Taobao.com, China's biggest e-commerce website, says mozzarella and cream cheese from New Zealand are his bestsellers. He sold almost 3,000 packs of mozzarella in October priced at 20 yuan ($3; 2.47 euros) apiece.

"Young people are buying cheese to cook pizza at home," he says. "It is not expensive, and gives a feeling of a Westernized lifestyle, which is chic."

Ji Haiyan, an account manager with Foodgears (Shanghai) Trading Co Ltd, says Chinese people's concerns about food safety, especially dairy products, after the tainted milk scandal several years ago, are more important reasons for the Chinese who do like cheese to opt for imports.

Melamine-tainted milk killed six infants and left more than 290,000 others with kidney damage in 2008, raising concerns about the quality of domestically produced dairy products. After a fall in sales and improved quality control, the cost of milk has surged.

Those factors, as well as the appreciation of the yuan and higher living standards, have all worked in favor of foreign cheese producers entering China.

Simone Ficarelli, head of international activities at Parmigiano Reggiano Cheese Association of Italy, says it has been working for nearly 10 years to promote cheese in China, and the region's Parmesan cheese is now available in many supermarkets, restaurants and hotels in the country.

After years of patient work, the efforts of companies like Ficarelli's are beginning to pay off, and the Italian Trade Commission says the value of the country's cheese exports to China was $4.8 million last year, double what it was two years earlier.

The food and drink consultancy Zenith International says that in 2009 cheese accounted for just 4 percent of China's dairy products market.

"The Chinese market has big potential when it comes to cheese, as consumption levels are relatively low," says Theis Brogger, a spokesman for Arla Foods, a Swedish-Danish dairy cooperative based in Denmark, and the largest producer of dairy products in Scandinavia.

Brogger's optimism about selling in China is shared by Stephen Jones, managing director of Somerdale, a British cheese exporter.

"At the moment our exports to China are quite small, about 50,000 pounds ($80,250; 61,700 euros) per year compared with 20 million pounds to all other export markets, but we expect this will grow in the next five years."

But just because Chinese are developing a taste for foreign dairy products does not mean big Chinese companies are ceding the battle of the cheese platter to their overseas rivals. Mengniu, Yili and Bright Dairy have all introduced cheese products in recent years, although none has acquired a dominant position.

As for the foreign companies, the strong position of New Zealand, Australia and the US can be attributed to strong promotion and competitive prices, so latecomers should find their niche as soon as possible, says Han of Roria.

Brogger says European brands' expertise in food quality control is a natural advantage compared with Chinese competitors, particularly given worries over food safety in China.

"Our quality control systems from farm to product are very relevant for the Chinese market, where consumers are looking for safe and healthy products. We are focusing on natural and healthy products, and therefore there are only natural ingredients in our products."

But Arla has had to adjust its cheese flavors to suit the preference of Chinese for sweeter and less salty products, he says.

After testing a variety of cheese flavors in China, Somerdale found that Chinese consumers particularly like its fruit cheeses, such as mango and ginger or cranberry, Jones says.

In an effort to seize the opportunities in the Chinese market, the British Environment Secretary, Owen Paterson, led a delegation to the Food and Hotel Exhibition China, a trade show in Shanghai in October.

"From chocolate to cheddar, China's population is getting a taste for dairy, and Britain's world-class food industry can supply that demand," Paterson says.

Britain has room to significantly expand production, but other European Union countries are restricted by milk quotas until 2015, he says.

"I believe there are great opportunities here," says Jones of Somerdale, which is looking to increase the number of its distributors in China.

Jones earlier told the BBC that expanding in China is complicated by a number of regulatory hurdles, but added that the effort was justified by demand for the product.

"Compared to US cheddar, which is young, maybe only a week old, our cheese is much older. Some are a year old, and have more flavor. They've been in China longer, but we will catch up."

Contact the writers at xieyu@chinadaily.com.cn and cecily.liu@mail.chinadailyuk.com

(China Daily 12/07/2012 page20)