Jarlsberg® cheese (www.jarlsberg.com) has been well received in the US. Nearly 60 years after entering the US it is now the imported cheese with the biggest market share of its category (‘Swiss-like’ cheese)
in the competitive US supermarkets. Up until now, cheese has mainly been exported out of Norway on quotas set by the World Trade Organization (WTO).
To increase sales, a licensed production was set up in Ohio in 2000, and the producing dairy was later acquired by the Norwegian mother company TINE SA.
From 2020, all Jarlsberg® export out of Norway will cease due to sustainability and profitability. All Jarlsberg ® for the US market will now be produced in TINE’s own dairy in Ohio. Quality control is highly maintained by using a cheese culture produced in Norway (based on a secret recipe from 1956), premium quality milk only, tailor-made production lines and key people with skills and know-how in dairy technology/science.

The story
Professor Ole M. Ystgaard and his students at the Norwegian Agricultural School developed Jarlsberg® in the 1950s. The project started with the cheese-making technique for producing Emmental cheese, without success. Later, by adding a specially developed bacteria culture that created the large holes in Gouda cheese, the famous Jarlsberg® was born.
Jarlsberg® cheese arrived in the US in 1963. In the beginning, the Jarlsberg® management team travelled around the country to demonstrate how the cheese could be used for everyday meals and at parties.
After just two years Jarlsberg® had a sales volume of 450,000 kg in the market, and the managers understood they had a ‘hot’ product.
Jarlsberg® has become a high-status product, served by celebrities at high-society parties.

Norseland Inc.
Norseland Inc. was founded in 1978. The purpose of the company was to market and distribute Jarlsberg ® and other Norwegian cheese in the US. The company is a wholly owned subsidiary of the Norwegian dairy company TINE SA, which has the main responsibility for the production and marketing of Jarlsberg® cheese. In addition, Norseland’s strategy is to sell exclusive cheeses only, and the company commands respect in the US retail trade, where a 90 per cent distribution coverage has been achieved.
Norseland has a regional office in Montreal, Canada.

The US cheese market
In 2018, the total US market for hard cheese was approximately 500,000 tons, but the market also consumed a lot of soft cheese. Although Jarlsberg only had a small market share in the total hard cheese market (in 2018 the company sold 15,000 tons in the US, including local production), this represented the largest market share in the Swiss-like cheese category.
The largest producer of cheese for the US market is Kraft, which makes and sells the popular soft cheese, Philadelphia. The second-largest cheese producer for the US market is ConAgra Foods.
In general, the tendency to consume cheese is higher in the Eastern part of the US. There is also a tendency to eat more imported cheese as personal income increases.

Jarlsberg® customers and marketing
Jarlsberg® cheese has some snob appeal. Customers want to show they have good taste and they accept the higher price of Jarlsberg® compared with other competitive products without complaining. The mild and creamy taste appeals to Americans, and many think that the taste of the traditional Swiss cheese, Emmenthal, is too sharp.
Characteristics of the typical Jarlsberg® buyer are:
• female • earning more than US$90,000 per year • over 40 years old.
It is important to buyers that it is a speciality cheese. The fact that it is a Norwegian cheese plays a minor role and Norseland does not use this in its marketing.
Norseland’s objective is to attract new and younger consumers for its Jarlsberg® cheese. To achieve this objective it wants to make contracts and deals with retail chains like 7-Eleven, which also sells sandwiches, among other things.
Besides its own sales force of about 30 people, Norseland uses nearly 500 ‘cheese brokers’ (distributors), who sell all over the US. These are external sales representatives who visit shops, retail chains and restaurants in order to sell and market products, among them Jarlsberg®.
Jarlsberg® aims to be present in at least five new countries, sourced through the production units (in the US or Ireland).
Questions
1. Which kind of market entry mode would you generally suggest for Jarlsberg®:

(a) In Scandinavia?

(b) In Asia?
2. What are the general motives for choosing a hierarchical mode (own subsidiary) in the US?
3. Which entry mode should be preferred by Tine (manufacturer of Jarlsberg Cheese) when the Norwegian export subsidies for cheese will be phased out in 2020?

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