1. Food Bites Speciality Cheese Annual Market Quantification June 2011

2. Setting the Scene – Category Definitions 2 ProductDefinition Mould Cheese This includes both white and blue mould cheeses. White mould cheeses are generally soft white bloomy rind cheeses with a mild flavour and creamy texture. Blue mould cheeses have strong, tangy taste and pungent aroma. Generally they are smooth and creamy Parmesan Type Cheeses This category includes Parmesan as well as Provolone. Parmesan is described as a straw coloured cheese with a grainy texture and a sweet nutty flavour. It is generally matured for a minimum of 12 months. Provolone is defined as a straw coloured or light cheese Speciality Italian Cheese This category encompasses all Italian cheeses that are not classified elsewhere, includes the likes of mascarpone, pecorino and ricotta. Other Speciality Cheese This encompasses all speciality cheese that is not categorised elsewhere, and includes the likes of goat’s milk cheese, leyden, gruyere, haloumi, havarti, Colby and Amsterdammer.

3. 2010 Category Shares 3

4. 2010 Channelling 4

5. Annual Growth Rates 5

6. Good performance by speciality cheese Category defies lag effect of recession 6 Speciality cheeses are different from mainstream cheeses in that they have limited availability, are usually more complex to produce, compete on more than price and can be differentiated using many product attributes. They are also characterised by varying textures and flavours. The foodservices industry is the major buyer of speciality cheese with more than half the industry's produce consumed in foodservice establishments. Speciality cheese is a high-end category given the premium pricing it commands. This niche positioning, however, has not hampered category growth, and due to many players expanding production, range and distribution, this category saw a healthy 8.0% growth during 2010. Speciality cheese is often not a priority category for producers and raw materials are sacrificed for more mainstream categories if necessary. It is believed that due to many producers shifting focus and raw materials during 2010, the category was prevented from achieving even greater growth.

7. 7 The good category performance in 2010 was seen in retail, industrial and foodservices direct. However, the same was not true of wholesale and export, and it is hypothesised that these channel volumes were sacrificed to meet the demand in the rest of the market. If there had been sufficient volumes available, it is believed that growth would have been seen in wholesale as well. With foodservices being the dominant consumer of speciality cheese, and with catering outlets sourcing products through wholesale, there may have been a natural transition to direct supply from manufacturers to foodservices, thus cutting out the middle man. This also had little affect on the regional distribution, where all regions saw distribution growth, whilst export saw a small decline in volume consumption. Good performance by speciality cheese Category defies lag effect of recession (Cont.)

8. Food Bites Speciality Cheese For more information, contact: Jan Wegelin Research Manager Tel: (011) 615 7000 Mobile: 082 938 0744 www.bmi.co.za