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CHEESE
A Matter of Convenience
by Julie Cook Ramirez
Contributing Editor
Contributing Editor
With consumers demanding great taste and convenience, cheese companies have made it their mission to deliver unique new products.
There’s no doubt about
it — Americans love cheese. Regardless of how they choose
to eat it — on pizza, tacos or pasta, or merely on a plate with some
crackers — consumers are gobbling up cheese like never before.
According to the U.S. Department of Agriculture, per capita consumption
of cheese reached 31.4 pounds in 2005. By 2014, that figure is expected
to rise to 34 pounds.
That’s pretty impressive, considering that cheese
is a very mature category which has long boasted household penetration of
nearly 100 percent. For cheesemakers, however, such high demand and
continued growth comes as no surprise.
“Cheese is a good healthy product that people
believe in,” says Jay Allison, national sales manager for Tillamook
County Creamery Association, Tillamook, Ore. “When it comes to
further growth of the category, there really seems to be no end in
sight.”
The highest growth areas within the cheese category
include specialty cheeses, natural slices and convenience/snack cheese,
according to Jim Montel, vice president of business development for cheese
at Dairy Management Inc. (DMI), Rosemont, Ill. He points to innovations
related to different shapes and sizes, and unique flavor profiles —
particularly ethnic cheeses — as well as encouraging different usage
occasions as having played a pivotal role in recent years.
While no one could criticize the cheese category as
being slow-growth, Montel says quite frankly that DMI is not satisfied with
the category’s current pace of growth — and they are determined
to do something about it.
“The difference between ’05 and ’04
was not quite what we had hoped,” he says. “We want it to grow
faster, and we believe that by giving consumers what they want — when
and how they want it — we can accelerate the growth in the cheese
category. Ultimately, the future lies in innovation, and that is what
we’re focused on — that’s our mission.”
These days, it seems that it’s not enough to
merely deliver taste and convenience. Consumers want cheese, but they want
it on their own terms. Increasingly, that means new formats and flavor
profiles that make it easy to consume cheese either on the run or to
incorporate it into their favorite recipe. As a result, sales of natural
chunk cheese have faltered — down 0.3 percent in dollars and 0.9
percent in units throughout supermarkets, drugstores and mass
merchandisers, excluding Wal-Mart, during the 52-week period ending June
17, 2007, according to Chicago-based Information Resources Inc. (IRI).
Meanwhile, sales of natural shredded cheese remain strong, up 1.3 percent
and 4.4 percent, respectively.
Clearly, consumers believe it’s worth paying a
bit more to cut one or more steps out of their meal preparation process.
Recognizing that need, processors have stepped up to the plate, unveiling a
wealth of innovative new products that give consumers what they want, while
possibly providing the cheese maker with an added value as well.
“What you’re seeing is people putting some
sort of value on that additional level of convenience, such as not having
to crumble their own cheese,” says Jed Davis, director of marketing,
Cabot Creamery Cooperative, Cabot, Vt. “For some companies, that may
provide an innovative way for them to deal with some of their product that
otherwise would be considered more off-grade and actually spin it out as a
product that has some residual value.”
As recently as the 1980s, Montel says, people probably
thought it odd that some consumers were willing to shell out more money for
pre-shredded cheese. In hindsight, of course, it’s obvious that
shredded cheese quickly became one of the top-selling segments within the
natural cheese category.
These days, the true driver of cheese category sales is
natural slices, which are “hot as a firecracker,” according to
Mark Korsmeyer, president of Kansas City-based American Dairy Brands (ADB),
a division of Dairy Farmers of America and maker of Borden cheese. Indeed,
IRI reports that sales of natural sliced cheese skyrocketed over the past
year — up 11.7 percent in dollars and 14.8 percent in units.
Meanwhile, processed slice sales continued their downward slide, falling
5.6 percent and 5.1 percent, respectively.
Montel believes many consumers have switched from
processed to natural cheese slices because a growing number of major brands
have entered the category, among them Kraft, Sargento, Tillamook and
Borden. Along with their brand name comes significant marketing budgets,
not to mention clout with retailers, resulting in a greater shelf presence
and greater trial among consumers.
Tillamook has been working with its retail partners to
get “incremental displays” of natural cheese in areas of the
store that make strategic sense — alongside ground beef, for example.
According to Allison, this strategy proves particularly useful during the
summer when cook-outs are in full swing: “When we’re able to
get our sliced cheeses in the hamburger section, consumers are better able
to make that connection between hamburger and cheese for their
picnics.” He reports that Tillamook’s Memorial Day displays
proved extremely successful.
For those consumers seeking a cheese that will give
their burger — or any other food — a little extra kick,
Plymouth, Wis.-based Sargento Foods Inc. unveiled Chipotle Cheddar
earlier this year. In addition to slices, Chipotle Cheddar is also
available in shreds and snack sticks.
“This is a new way for Sargento to be thinking
about marketing cheese,” says Barbara Gannon, vice president of
corporate and marketing communications. “Before, we had been kind of
silo’ed in thinking, ‘OK, this is going to be a shred
item,’ or ‘This is going to be a sliced item. What has been new
in 2007 is we’re looking at a cheese variety going across all
forms.”
That is also the case with Sargento’s new Limited
Edition line of natural cheeses. Designed to allow consumers to experiment
with unique cheeses from across the country, Sargento’s Limited
Edition line is said to be the first of its kind. Beginning with Vermont
Sharp White Cheddar earlier this year, Sargento moved on to Aged Provolone
this spring (a third variety will hit stores this fall). While each variety
was originally expected to be available for six months, Gannon says demand
has been so high that they’ve been selling out in four months.
Gannon concedes it would be unlikely that Sargento
would be able to procure a large enough supply to make any of the Limited
Edition varieties available on a year-round basis. However, she says the
company will gauge reaction to the various cheeses to determine which ones
will circle back around and be available on a limited edition basis once
again in the future.
Montel calls this new approach to cheese marketing
brilliant. “When you see the limited time offer kind of messaging on
the package, it drives a sense of urgency to the consumer,” he says.
“That’s a call to action and it encourages people to experiment
and try some of these new flavors.”
Removing the Mystery
When it comes to Sargento’s target consumer,
Gannon describes them as the “food adventurer” — someone
who eats out in restaurants, travels extensively and, increasingly, watches
The Food Network. Across the board, cheese makers agree that TV cooking
shows have had a big impact on home meal preparation in general and cheese
usage, in particular.
“If someone like Emeril [Lagasse] uses something
like a parmesan oregano, the consumer will say, ‘It’s probably
pretty good,’” says Becky Ryan, managing director of retail,
Sartori Foods, Plymouth, Wis. “It brings awareness that there are
other options out there and it takes the mystery out of some of the cheeses
people aren’t familiar with, making it easier for them to go try
it.”
Likewise, consumers frequently seek to replicate a
favorite restaurant dish at home. In recent years, they’ve been
exposed to more cheese-laden dishes than ever before, thanks in part to the
efforts of DMI, which has partnered in the past with numerous major chains
— including Wendy’s, Pizza Hut, Burger King and others —
to develop cheese-laden offerings. As a result, says Gannon, even
fast—food restaurants have spread their wings and are now offering
consumers their choice of cheeses on a burger or sandwich.
“Quick-service restaurants are nudging into the
territory that used to be casual dining,” she says. “They want
to offer higher quality, slightly more upscale choices, and one of the ways
they can do that is by upgrading the cheese on their sandwiches.”
While Montel declines to reveal specifics, he says DMI
currently has “application research work underway for pizza
cheese.” Currently, he says, 49 percent of all U.S.-produced
mozzarella is used to pizza applications — an impressive number for
sure. However, Montel says DMI “would like to see it grow
faster.”
Granted, pizza’s popularity remains high, even
as news breaks that pizzerias are increasing their prices in response to
rising cheese prices, which have soared 55 percent just since the beginning
of 2007. Dallas-based Pizza Hut, which uses a whopping 300 million pounds
of cheese each year, recently raised the price of a regular cheese pizza to
nearly that of a regular one-topping pizza. Company spokesperson Jennifer
Little has been reported as saying the chain has decided to treat cheese
“almost like an extra topping,” adding, “It’s an
extremely important ingredient and we have to constantly monitor and
evaluate it.”
Responding to the desire to replicate restaurant-style
meals at home, cheesemakers have rolled out a plethora of products designed
to help home cooks incorporate cheese into their menus. When it comes to
Borden’s Shred Medleys, introduced last year, Korsmeyer admits
“the jury is still out.” While he says repeat purchases are
higher than some of Borden’s other recent new product introductions,
Korsmeyer says Shred Medleys’ problem lies in the fact that consumers
are somewhat befuddled by the inclusion of a seasoning packet, which is
designed to give consumers flexibility in how much spice they want in the
finished product.
Shred Medleys were introduced following the success of
Sargento’s Bistro Blends line of shredded-cheese blends pre-mixed
with various seasonings; several new varieties are slated to join the
line-up this fall. Like Korsmeyer, Sargento’s Gannon says a certain
amount of education is required when selling this kind of product at
retail. In Sargento’s case, however, it’s the retailers, rather
than the consumers, who require a little education about the product.
“Some of the retailers expected Bistro Blends to
have the same velocity as a mozz or a cheddar, but we never expected that
because they are not used in the same way as more of a commodity type of
cheese,” Gannon says. “We’re finding that we need to do a
bit more education as we introduce specialty kinds of cheeses, so that
retailers’ expectations are not unreasonably high.”
To aid consumers in figuring out how best to use Bistro
Blends, Sargento provides them with recipes on the company’s Web
site. Granted, this is not unusual for the cheese category, which relies
heavily on recipes to boost usage and increase sales. Tillamook, for
example, works with a team of regional chefs to develop new recipes for
inclusion on its Web site.
“We’ve put quite a focus on recipe
development over the last couple of years,” Allison says. “We
do it by dish, by style of cuisine, just trying to give people, if they
want to make a special dish with cheese, some ideas.”
In recognition of America’s fondness for macaroni
and cheese, Tillamook sponsors an annual macaroni and cheese recipe
contest, wherein amateur cooks submit their favorite mac-and-cheese
recipes. Held in six cities across the country, the contest culminates in
Tillamook’s home state with a cookoff held in Portland, with the
grand-prize winner receiving a $5,000 check.
According to Gannon, comfort foods like macaroni and
cheese are playing a significant role in bolstering cheese consumption. She
points to one restaurant in New York that serves nothing but macaroni and
cheese. A multitude of varieties are available, ranging from concoctions
incorporate such upscale ingredients as lobster into the mix to those that
merely use more exotic cheeses in place of cheddar.
“There are a lot of different varieties of cheese
that people will sample in a restaurant environment,” Gannon says,
“and after a while, they’ll want to search those out and have
them at home.”
Whether they are whipping up a batch of macaroni and
cheese or some other cheesy delight, Tillamook customers have three new
varieties of flavored cheddar cheese to experiment with. Introduced in
January, Garlic White Cheddar, Garlic Chili Pepper Cheddar and Smoked Black
Pepper White Cheddar are all naturally aged and produced from cows not
treated with artificial growth hormones.
Marketing director Kathy Holstad says she felt the
timing was right for these products due to the burgeoning artisan cheese
movement, which demonstrates that American consumers are increasingly open
to new cheeses.
Ryan agrees that Americans’ palates are becoming
more sophisticated. “Consumers’ tastes are definitely on the
upscale,” she says. “As people have traveled, restaurants have
gotten more adventurous and The Food Network has emerged, people have been
introduced to a whole lot of new and different tastes. As a result, they
are looking for cheeses that are a little bit different and more
interesting.”
A long-time foodservice provider, Sartori has recently
embarked on a line of artisinal cheeses for the specialty retail food
segment. One of the first introductions was Bellavitano, described as
“a hard cheese with creamy, rich flavor.”
Recognizing the growing interest in artisinal cheese,
Sargento recently worked in conjunction with a select group of Artisan
cheese makers from across the United States, as well as internationally, to
develop a line of “Artisan blend cheeses.” The line will begin
shipping in August.
Montel says such products are likely to be especially
popular among Baby Boomers: “They have disposable income, which
allows them to try new things.”
While artisinal cheeses make up a small segment of the
overall cheese category, specialty cheeses in general have garnered a great
deal of attention from consumers and retailers alike. In Canada, Kraft
Foods recently rolled out Kraft LiveActive, said to be the first cheddar
cheese product with probiotics, beneficial cultures which have been shown
to improve digestive health, enhance the immune system and promote
regularity. Boasting 1 billion probiotic cultures per serving, Available in
a block format or as individually wrapped cheese snacks, as well as cubes,
Kraft LiveActive is expected to hit U.S. dairy cases this fall.
Preceding Kraft in pulling cheese into the wellness
arena was California-based Omega Farms, which offers a selection of natural
cheeses (along with milk and yogurt) enhanced with omega-3 fatty acids.
Meanwhile, research continues into the functionality of
cheese as a wellness food product. There’s no doubt that such
innovations will play a key role in helping boost consumption in an
extremely mature category.
“We’ve had tremendous success in the past
and we will have tremendous success into the future,” Montel says.
“If we keep our eye on the ball, which is the consumer, and we
deliver products that meet their needs, the future will be very bright for
the cheese industry.”
TOP 10 INDIVIDUAL NATURAL CHUNK CHEESE BRANDS* | ||||||
$ Sales (In Millions) |
% Change vs. Year Ago |
Dollar Share |
Unit Sales (In Millions) |
% Change vs. Year Ago |
||
Total Category | $2,254.6 | -0.3% | 100.0% | 734.0 | -0.9% | |
Private Label | 799.4 | -3.0 | 35.5 | 293.9 | -2.0 | |
Kraft | 218.1 | -2.8 | 9.7 | 94.5 | -4.2 | |
Tillamook | 159.8 | 0.7 | 7.1 | 33.9 | 1.0 | |
Kraft Cracker Barrel | 106.0 | -2.3 | 4.7 | 37.5 | -1.7 | |
Cabot Vermont | 61.4 | 5.3 | 2.7 | 22.6 | 2.8 | |
Cacique Ranchero | 41.9 | 12.0 | 1.9 | 11.7 | 12.9 | |
Heluva Good | 41.9 | -4.7 | 1.9 | 18.2 | 1.3 | |
Polly-O | 40.5 | -4.8 | 1.8 | 11.8 | -4.8 | |
Land O’Lakes | 39.1 | -13.6 | 1.7 | 12.6 | -16.3 | |
BelGioioso | 38.8 | 20.5 | 1.7 | 8.5 | 20.7 | |
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending June 17, 2007. SOURCE: Information Resources Inc. |
TOP 10 NATURAL SHREDDED CHEESE BRANDS* | ||||||
$ Sales (In Millions) |
% Change vs. Year Ago |
Dollar Share |
Unit Sales (In Millions) |
% Change vs. Year Ago |
||
Total Category | $2,120.6 | 1.3% | 100.0% | 904.1 | 4.4% | |
Private Label | 963.2 | 3.3 | 45.4 | 437.2 | 8.0 | |
Kraft | 582.8 | -1.0 | 27.5 | 239.5 | 0.5 | |
Sargento | 194.1 | 9.5 | 9.2 | 80.9 | 12.8 | |
Crystal Farms | 84.0 | -2.5 | 4.0 | 35.2 | 1.5 | |
Borden | 47.2 | -12.0 | 2.2 | 23.3 | -8.2 | |
Sargento Chef Style | 39.2 | 5.9 | 1.9 | 15.2 | 10.1 | |
Kraft Free | 32.4 | 4.5 | 1.5 | 12.5 | 6.3 | |
DiGiorno | 32.1 | 6.3 | 1.5 | 8.6 | 4.5 | |
Kraft Classic Melts | 18.3 | -23.1 | 0.9 | 8.1 | -21.2 | |
Stella | 15.9 | 6.9 | 0.8 | 4.7 | 4.0 | |
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending June 17, 2007. SOURCE: Information Resources Inc. |
TOP 10 INDIVIDUAL NATURAL sliced CHEESE BRANDS* | |||||
$ Sales (In Millions) |
% Change vs. Year Ago |
Dollar Share |
Unit Sales (In Millions) |
% Change vs. Year Ago |
|
Total Category | $755.7 | 11.7% | 100.0% | 264.8 | 14.8% |
Private Label | 218.1 | 12.0 | 28.9 | 93.3 | 17.9 |
Sargento | 91.9 | 26.1 | 12.2 | 33.3 | 31.2 |
Kraft Deli Deluxe | 64.8 | 10.0 | 8.6 | 21.3 | 6.8 |
Sargento Deli Style | 62.0 | 36.4 | 8.2 | 22.1 | 41.0 |
Tillamook | 56.7 | 36.3 | 7.5 | 14.4 | 53.4 |
Kraft | 30.4 | -6.2 | 4.0 | 11.0 | -5.5 |
Alpine Lace | 26.8 | -2.9 | 3.6 | 6.6 | -4.8 |
Kraft Cracker Cuts | 23.7 | 0.8 | 3.1 | 10.6 | 3.2 |
Kraft Cracker Barrel Cracker Cuts | 23.4 | 29.8 | 3.1 | 7.9 | 29.3 |
Land O’Lakes | 17.1 | 6.5 | 2.3 | 5.0 | 3.5 |
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending June 17, 2007. SOURCE: Information Resources Inc. |
TOP 10 INDIVIDUAL PROCESSED CHEESE SLICES BRANDS* | ||||||
$ Sales (In Millions) |
% Change vs. Year Ago |
Dollar Share |
Unit Sales (In Millions) |
% Change vs. Year Ago |
||
Total Category | $1,273.0 | -5.6% | 100.0% | 509.3 | -5.1% | |
Kraft Singles | 464.0 | -4.7 | 36.5 | 183.9 | -4.0 | |
Private Label | 312.4 | -5.6 | 24.5 | 150.4 | -3.1 | |
Kraft Deli Deluxe | 123.2 | -4.1 | 9.7 | 29.4 | -5.1 | |
Borden | 91.6 | -8.6 | 7.2 | 43.8 | -5.3 | |
Kraft Velveeta | 63.3 | -4.5 | 5.0 | 17.8 | -5.5 | |
Kraft 2% | 42.8 | 1.0 | 3.4 | 13.8 | -1.0 | |
Kraft Free | 30.7 | -5.6 | 2.4 | 7.7 | -8.0 | |
Land O’Lakes | 28.6 | -9.9 | 2.3 | 8.7 | -13.6 | |
Crystal Farms | 22.2 | -3.7 | 1.7 | 10.1 | -2.9 | |
Galaxy Nutritional Foods Veggie Slices | 17.0 | -11.1 | 1.3 | 5.5 | -13.4 | |
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending June 17, 2007. SOURCE: Information Resources Inc. |