Background
11 years ago there were just a handful of small scale cheese makers in Norway - in farms and small cooperatives - and these first pioneers were having a tough time with the authorities. But that was the year the first farmhouse cheese makers received authorisation from the Norwegian Food Safety Authority. Since then more than a hundred new cheese makers have been established and the great majority of them enjoy a constructive relationship with authorities like the Norwegian Food Safety Authority and helpers like Innovation Norway. Those who have joined this development have done so for many reasons, but the desire for more local value creation has often been central. But we would never have seen this explosion of interest unless the people behind it had been motivated by the love of good food. The amount of cheese from small scale makers still represents less than 1% of consumption, but their market visibility has been much greater, thanks to consumers' increased awareness of and liking for the products.
Developing and producing food products of a specific quality, in such a way that the big international companies find it difficult or unprofitable (and sometimes even illegal) to produce them, is a competitive strategy that has been successfully developed in many European regions. Small companies have a very good opportunity to protect their interests by producing food of a specific style and quality. This development path also offers an opportunity for larger companies, however. International experience has shown that it is the very smallest companies which are the pathfinders, creating acceptance among consumers of more differentiation in food prices and quality, and thereby creating new market opportunities.
In several European countries, such as France, Portugal, Italy and Switzerland, dairy products are an area in which speciality products can achieve very high returns, both in the production of raw materials and in processing. This is especially true for cheese and butter. Almost all the small scale Norwegian producers of dairy products have drawn - and are still drawing - their competence and inspiration from abroad. Imported competence is seen most clearly in production techniques, but there is also still a great deal to be learned about finding good distribution, market access and organisational solutions.
Introduction
Nofima Mat as (formerly Matforsk) has a long standing partnership with Innovation Norway (IN) in which we have developed and organised product development networks for the food industry. Many of these networks have been angled towards SMEs, but it has also proved appropriate to include some larger organisations. Some of these networks have taken the theme of international competitiveness and product development. The two networks Liten og Vidsynt and Liten og Vidsynt Videregående (LVVG) - literally "small and far-seeing" - were specially designed for small scale cheese makers, whether on the farm or in small cooperatives. The aim has been to increase competitiveness and the content has been aimed towards the needs of the individual participants, but all participants were also required to devise a project during the network period, covering anything from technical production issues to design.
Organising a network for small companies means largely tailoring and developing the content on the small companies' terms. IN is very familiar with the conditions and problems that lie ahead of small scale and farmhouse cheese makers and also knows about the work being done in a number of countries to develop this industry. This international experience can be a considerable help in solving the problems facing the industry in Norway. It will prepare companies to meet the challenges they will face in the Norwegian market and will also reveal opportunities in the export market.
Target group
The network is aimed at small scale and farmhouse cheese makers and dairies with fewer than 20 employees, which have a well established production and have managed to establish a market for their products. The companies should have demonstrably secure finances, or have plans that show that realistic market development could provide a healthy financial basis. They must be companies that are interested in developing their competence in international trends and developments, in technology, marketing and organisation. This competence is desired so as to develop products that are competitive internationally, primarily to secure the company's position in the national market and compete with imports. But the potential should also be there for export to selected and demanding market segments.
It will be a particular challenge for this network to select participants that are sufficiently unique to allow all members to benefit. Small scale cheese makers may be in very different stages of development. When they start up on a very small scale, many will find that selling the product is no problem, since it will be accepted by the local market, who often buy direct from the farm. It is often the regulatory framework that is the most pressing problem. When this barrier has been passed, it will soon be lack of knowledge about market and product development that creates the next bottleneck. Even for a small scale cheese maker, economies of scale will help to achieve the best costs structure.
One characteristic of the two "Small and Far-Seeing" networks has been the participation of several of the smaller units of the dairy giant TINE. This has been very positive, much more so than expected in fact, since we have found that both sides face much the same problems and the exchange of information in the network has been very positive for all parties. There was great interest in joining the second network, with 9 of the 10 companies contacted joining the network.
Because the regulatory framework will be a very important element of this project, the authorities and organisations involved will have an important part to play. These could include the Ministry of Agriculture and Food, the Norwegian Food Safety Authority, the Norwegian University of Life Sciences, the Norwegian Agricultural Quality System and Food Branding Foundation and others.
Objectives of the project
- Help strengthen the competitive ability of 6 to 9 Norwegian small scale dairy companies by means of a targeted commercial development process aimed at competence building and product development in each company.
- Help develop the competence of authorities and organisations in international conditions and in the potential for small scale dairy production, so that they can become effective partners in developing these companies.
- Increase the competence of companies, authorities and organisations in international markets and trends, with a secure understanding of the aspects affecting the food industry.
- Stimulate cooperation between the companies in the group, to exchange competence and work together in their organisational approach, commercial relations and export promotion.
- Increase the companies' profitability through targeted product development.
After participating in the network, the companies should feel certain they have:
- Sufficient awareness of the regulatory framework applying to this type of production in the EU and its effects in Norway.
- Developed or planned to develop one or more products that are competitive internationally, either to strengthen their position in the national market or to develop their export ambitions.
To arrive at this position the companies will work on the following elements:
- A proper evaluation of the present situation, the regulatory framework for establishment and production, bodies that can provide assistance with product development and organisational and political support. Analysis tools for small scale producers (meeting 1).
- Trends in European small scale dairy production, examples of success stories, the regulatory framework for production and marketing. Techniques and organisations that can help base targeted product development on the needs of the market (meeting 2).
- Developing packaging for small scale production. Market planning for internationalisation. An in-depth look into consumer needs and preferences (meeting 3).
- How to secure access to the market, logistics, negotiations, price structure, working towards the market (meeting 4).
- The exact content may change to take into account needs that are revealed during the progress of the network.
Actions to achieve the objectives
- A thorough process of selecting, analysing and motivating the participating companies. The companies must present their accounts and any existing marketing plan.
- Active collaboration with Matforsk's partners in the development of small scale companies and farm processing: the Competence Hubs, the Norwegian University of Life Sciences etc.
- Analysis of each participating company, so as to secure project executives and the company itself a true insight into the company's potential and to ensure that participation in the network is fully endorsed in the company's own plans.
- Meetings at which the companies will be given ample opportunity to exchange information and experience, to acquire new knowledge and to make plans for work between the meetings. Each company will define its own "homework" - the project it will work on within its own company. These projects should form part of a holistic, strategic development of each company.
- A mentor to follow up with the individual company between meetings.
- The format will allow for the greatest possible user control, so that participants can have a genuine influence on the content and progress of the network.
Structure of the meetings
- The meeting should encourage an active dialogue between participants and the project executive should ensure that everyone is involved.
- There will be presentations by experts, covering background knowledge, methods and techniques that can be applied to the companies' work.
- Ample time will be allowed for companies to present their own projects and for the other participants to discuss and offer active help.
- There will be group work in which the knowledge arising along the way can be put into the context of the companies' own projects.
- Visits to companies and institutions that are relevant for the participants.
