Dairy Market Trends
As reported in our annual State of the Industry report last month, the cheese forecast for 2009 is favorable and is expected to grow 23% from 2009 to 2013, per a recent survey by Chicago-based Mintel. In fact, the cheese market is in line to reach nearly $16 billion by the end of this year.
While these figures present encouraging results, quarterly sales figures from Chicago-based Information Resources Inc. paint a more challenging picture, one that proves numbers aren’t always the last word in foretelling the future.
According to IRI data, cheese processors are selling more units but at a lower year-over-year rate, which means that companies are selling higher volumes of certain products but are still struggling to break even from last year’s numbers.
For example, Kraft Foods maintains a spot within the Top 5 sector of nearly all the natural cheese segments, IRI numbers show. This could be a result of Kraft’s efforts to redesign the packaging of its Natural Shredded cheese, which now features optimized images to make the colors stand out on the shelf, says Donald King, vice president of marketing cheese and dairy for Kraft Foods, Northfield, Ill.
Meanwhile, Athenos, a division of Kraft Foods, dominates the natural crumbled cheese segment thanks to its offerings, which can be paired with the company’s hummus and pita chips.
In some cases, however, Kraft’s placement on the IRI charts toggle back and forth between private label brands, which leads the pack in the chunk, shredded, sliced, string, grated and ricotta cheese arenas.
Likewise, the processed cheese category is experiencing similar roller-coaster results.
For instance, Kraft and private label again teeter-totter between the No. 1 and 2 spots, except for cheese spreads and balls, where private label comes in third behind Laughing Cow and Kaukauna.
The inconsistency of numbers proves that families are preparing more meals at home and incorporating cheese as a healthy ingredient. Meanwhile cash-strapped consumers are relying on convenient on-the-go snacking options to get them through the day, and items such as string and cubed cheese cater to those needs.
“Demographic and lifestyle shifts are leading to greater awareness of health and wellness benefits in foods including cheese,” King says. “Consumers are focusing more on the positive benefits such as calcium and the natural goodness of cheese and dairy.”
Despite the cheese market’s ups and downs, new product introductions and packaging enhancements set the stage for what’s to come, mainly because numbers alone can’t predict the future.