Supporting Macedonia's New Cheese Exporters
There are 50,000 people in Macedonian who make their livelihood from sheep, mostly from the sale of lamb and cheese. In general, their standard of living is low, but Macedonians connected with the industry were missing out on opportunities to increase their incomes by exporting cheese. By conducting market research with the Lamb & Cheese Cluster, helping to identify interested distributors, and publicizing success stories, MCA has helped the industry to export more than $125,000 to four new markets. As a result of the new interest and capabilities in exporting, export figures are expected to continue growing rapidly in the coming years.
Macedonia’s Challenge
Standards of living for the thousands of people who make their living from raising sheep are threatened by uncertain markets for lamb in Italy and Greece and limited opportunities in the general economy. An important source of income for farmers and dairy companies could come from the sale of cheese, but historically, Macedonian dairies and sheep farmers do not export their cheese. Before starting to work with MCA’s Lamb & Cheese Cluster, the dairies did not know which foreign market segments were most attractive and they did not have contacts with distributors in foreign markets. Most seriously, perhaps, the dairies believed the potential for exporting cheese to be so limited that only one dairy even had an export license.
The Macedonia Competitiveness Activity, through its work with the Lamb & Cheese Cluster decided to use a 3-step approach to help the industry develop a new opportunity for generating export revenues. First, MCA conducted market research to identify the best market segments and demonstrate to the cluster the nature of the opportunity. Second, the project connected cluster members to interested distributors identified in the market research. Third, MCA publicized success stories to create new interest in exporting among other cluster members.
When MCA first started working with the Lamb and Cheese Cluster, only one cheese producer had an export license and the broad sentiment within the cluster was that Macedonia could not successfully export cheese. MCA designed and executed market research in the United States and Albania. The market research indicated that American distributors and retailers were most interested in differentiated sheep cheese that Macedonia could offer, rather than the lowest price commodity cheeses. A market visit to Albania illustrated that local distributors did not start with a high opinion of Macedonian cheeses, but were open to cooperation if producers could provide them consistent quality at a reasonable cost.
As a result of the market research, MCA connected Lamb & Cheese Cluster members with potential distributors in the United States and Albania. After initial small shipments met with success, an American distributor signed a contract to purchase 100 tons of Macedonian bieno sirenje, an aged, beaten cheese that sells for well-above commodity cheese prices. After successfully demonstrating that Macedonian white sheep cheese was of a higher quality the Greek varieties currently being sold, a cluster member was able to place more than 10 tons of cheese in the Tirana market. The Albanian opportunity proved to be attractive enough that the dairy established a distribution center in Tirana and is cooperating extensively with Albanian distributors and retailers.
The greatest benefit, however, comes from the change in the mindset of other Lamb & Cheese cluster members. Instead of protesting that exporting is beyond their capabilities, a more common refrain heard today is, “If Ljupco (the director of Nasto dairy) can export to the United States, so can I.” Several additional companies have now started the process of securing export licenses so they can pursue export markets. One additional dairy has exported small shipments to EU members Greece and Slovenia for the first time and is expecting large follow-up orders in the near future.
Armed with clear market insights, relationships with local distributors, and new enthusiasm about the potential for Macedonian cheese exports, some Lamb & Cheese cluster members are well-positioned to develop competitive positions in new markets. The companies that continue to take advantage of these opportunities will be able to sell their products for relatively high prices and increase prosperity for those employed in the lamb and cheese industry.
Next Steps
As next steps, MCA is working to broaden the initial success of cheese exporters. The three with export licenses will participate in SIAL 2004 Global Food Trade Show in Paris this October. Several additional dairies are processing their export licenses and have identified target markets in Kosovo and Serbia. We are also working with the newly established commercial attaches in the Macedonian embassies in Belgrade and Moscow to help develop relationships with distributors in those markets.
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