Analysis Cream cheese
Shortage of cream cheese in United States
A shortage of cream cheese has developed in the United States, preventing many Americans from baking cheesecake for Christmas. A cyber-attack on the country's largest cream cheese manufacturer has severely strained production. Apart from that, cream cheese producers in the United States were already struggling to keep stock levels.
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Schreiber Foods was closed for days in October because a group of hackers attacked the factories and distribution centers. This attack took place during peak season. Add to this the existing staff shortages and sky-high inflation and the chaos is complete. Many food companies were already struggling with shortages due to the raw materials rally, which is a result of the growing demand for agricultural raw materials. Cream cheese is a product that consists of both cream and milk, which explains why there is not a large stock of it.
Demand for cream cheese is increasing
Cream cheese has always been popular with American consumers - regardless of the approaching Christmas holidays. Kraft Heinz reports that demand from retail and food service increased by 18% last year. The food company is currently sending 30% to 35% more cream cheese to restaurants than last year. Meanwhile, demand continues to rise. Partly because American consumers eat breakfast at home more often; a consequence of the corona crisis.
The high demand for cream cheese is too high for the scarce supply. It had to start in early December Junior's Cheesecake production in the bakery had already stopped due to a shortage of cream cheese. This factory normally works overtime during the busiest time of the year. The problem of raw material scarcity is not yet over, which is why production has recently been paused again.
Vulnerable product
Last year, total U.S. cream cheese sales were worth approximately $830,8 million. Exact production figures cannot be determined. Cream cheese is particularly vulnerable to supply chain problems. Some manufacturers have had problems sourcing starch, a thickening agent, in the past year. But obtaining packaging such as plastic film and cardboard boxes was also a challenge.
Source: Markets Insider.
In the United States, the futures price for milk has been at a fairly high level since the beginning of December. On December 17, milk was trading at $18,48 on the CBoT in Chicago. On Monday, December 20, the quotation was at the same level, with a quotation of $18,46. It is a decrease compared to December 8, when milk was still listed at $18,76. The exact price of cream in the United States is not clear. Market figures from market agency Tridge show that cream cheese is traded for $1,15 per kilo. Due to the high milk price, it is expected that cream cheese will become more expensive in the long term.
To ease the pain, food giant Kraft Heinz (owner of Philadelphia Cream Cheese) has offered to reimburse consumers up to $17 starting December 20 for dishes they want to bake that do not contain cream cheese. Consumers receive a voucher. "This year, instead of the famous cheesecake, make brownies," the food company said. Kraft Heinz's website shows that nothing can be claimed anymore, from which it can be deduced that the promotion was a short-lived success.