“Blurred vision”

For some it will be a nightmare of unknowns, for others in the speciality cheese trade I think it will be a good year, despite virtually all parts of the trade facing the same issues.

For those who dropped prices in line with milk, which was at 32p in 2014 then fell to the lows of 20p and below, are doing nothing unreasonable by seeking to recover the passed on savings.

However, those who moved not at all in that period and now use milk moving up towards 27-28p as the justification for increase is close to Marmite’s world approach, especially as other inflationary costs have been below 2% for several years.

Currency for continental importers is still a major headache, slipping as it has more than 15%, albeit ‘Trump power’ has seen it rise a few percent at the time of writing. Brexit and Article 50 on 31st March, dependent on a legal case, the challenges of the Scottish and Welsh parliaments, and the mischief making of so many, leaves Sterling on a rollercoaster, predicted at par oneto- one and 1.24 depending on whose view you take. It’s no recipe for stable trading, and importers will still be on tenterhooks wondering whether to cover forward or not.

Vintage Cheddar, extra mature Cheddar, and even mature Cheddar are becoming shorter in supply and even shorter in profile, and still many buyers are in denial. There will need to be some rapid adaptions, and I see profiles falling and prices rising. Exports will boom in 2017, driven harder by improved prices through lower exchange rates, and we shall see transfer to UK makers of an overseas Cheddar demand opportunity that previously went to Ireland.

The demand for aged cheese will further stress the availability issue, and the willingness for overseas buyers to pay a premium over UK markets will see vintage and extra mature heading overseas. Small makers will find themselves flavour of the year for both retailers and caterers, however the strict caveat is that technical proficiency will need to be fully demonstrated. A number of major retailers have adapted their positions on the approach to a lower-than-BRC standard, but the strict requirements must be observed. The reward is of course good national exposure and brand opportunity, but the learning for makers is that the hard work begins after the introduction, and if done well, it has many benefits.

A number of packers and distributors have solved the complex, expensive and challenging task of prepacking fixed weight portions. This represents a good brand delivery opportunity in a cheese trade that sells 93% of all cheese in packaged form, and I believe there will be a surge in specialist retail prepacks in 2017, as many retailers and food service outlets look to deliver localism.

Innovation is now back on the agenda big time, as all retailers seek point of difference. They in turn will lead this for their own ends via the product briefs they issue to many. Low prices have reduced risk taking and investment in ideas over the past 18 months, where only the power brands like Cathedral City have led real innovation, with most other innovation being on a small scale in independent makers and packers, generally via new product development. I see this accelerating in 2017, with some original ideas in product and pack. Farm shops, farmers markets and speciality in food will still continue to be the shoppers’ destination of choice, as larger retailers struggle to grasp the principles of this sector: where shopper buying decisions are more emotional than commercial; where product knowledge and food experience bypasses all the system-driven thinking; where local awareness and flexibility outpaces one-size-fits-all.

The wiser major retailers will take radical actions around their deli as costs mount, waste thrives and sales slip, and I see at least two of these being able to turn the situation steadily to its right advantage.

In the product stakes, superpremium Cheddar will continue to outpace the Cheddar market itself, despite all the supply challenge. Comté and Manchego show no sign of slowing down, and both hard and soft goat’s cheese are making inroads. Halloumi will surely have another super summer and in late summer the lost twins of Red and White Fox should reach maturity and return.

Predicting the future has never been a science. Now, as well as milk, consumers and the financial health of the nation, politics, Europe, currency and alternative demand look so much more blurred than normal. Overall, though, 2017 should be a good year for most.