These are good times to be in cheese. It is a dairy food that consumers like and it can be packaged in formats that fit an on-the-go way of life. Dairy processors are investing in capacity to keep up with demand.

Cheesemakers will head to Madison, Wis., for a big trade show next month. The timing of the Wisconsin Cheese Industry Conference could not be better. Retail sales of cheese are growing as are sales to foodservice accounts that use cheese in pizza, sandwiches and pasta dishes.

Cheese hits the sweet spot of many of today’s food trends. It is a good source of protein. It can be packaged in portable or snack-size containers. It takes to flavors, such as spicy peppers or fruity mango or citrus flavors. And it’s a multicultural food, a trend of interest to millennials.heesemakers will head to Madison, Wis., for a big trade show next month. The timing of the Wisconsin Cheese Industry Conference could not be better. Retail sales of cheese are growing as are sales to foodservice accounts that use cheese in pizza, sandwiches and pasta dishes.

Arla makes a move

In February I visited with Arla Foods’ CEO Don Stohrer Jr. at the company’s Havarti cheese plant in Hollandtown, Wis. Arla is a division of the large European dairy cooperative. The U.S. operation is making a big push to increase its presence in the cheese aisle. It wants packages of Arla brand cheeses on the pegboard, hanging side by side with the national brands. Arla’s imported Castello brand already is established in the deli section.

Stohrer told me “You can’t be a true global player without being prominent in the U.S. To play a key role in the global strategy, we needed to evolve our business in the U.S.” Until recently, 95% of its sales were made in the deli area, but 92% of the volume of cheese in the United States is sold in the dairy, he said.

Arla is shifting some of its production of Havarti, Gouda and Edam from deli loaves to slices (also called shingles) for the cheese aisle. But the real action in U.S. supermarkets is in Cheddar cheese, the No. 1 American-style cheese (as measured by production volume). Cheddar is outpaced only by mozzarella (4 billion pounds compared to 3.4 billion pounds of Cheddar in 2015, according to the U.S. Department of Agriculture).

Arla is in a joint venture with Dairy Farmers of America, the huge U.S. co-op. DFA is building a plant in western New York state where it will make Cheddar cheeses from milk not treated with rBST. Arla’s roll in the joint venture is to sell the cheese. It’s a big move and a big investment for both companies.

Glanbia in JV with U.S. co-ops

Speaking of DFA, the co-op is planning to build another Cheddar plant with a different set of partners. In January, the Irish dairy giant Glanbia, DFA and two other U.S. dairy cooperatives (Michigan Milk Producers Association and Foremost Farms USA) said they are in “advanced discussions” to create a stand-alone joint venture to build and operate a Cheddar cheese and whey production facility in Michigan. Glanbia would own 50% of the joint venture, with the remainder held by the U.S. partners. If the project proceeds as planned, commissioning of the new facility is expected to take place in the second half of 2019.

Fluid milk processor Prairie Farms Dairy took an opportunity to get into the cheese business by merging with Swiss Valley Farms earlier this year. Both companies, which are listed on the Dairy 100, our ranking of North America’s biggest dairy processors, are farmer-owned dairy cooperatives. The combined company will operate under the name Prairie Farms Dairy Inc.

The merger allows Prairie Farms to sell all the major dairy food products: milk, cheese, yogurt and ice cream, not to mention a dairy powders business. Swiss Valley Farms also presents ready-made access to export markets. Prairie Farms has 35 manufacturing plants making fluid milk products, cultured dairy foods, ice cream and nondairy beverages.

Cheese and the fluid milk dairy

Many fluid milk processors are already in the cheese business; cottage cheese, that is. This is one of the great under-appreciated and under-marketed cheeses in the dairy case. A serving of cottage cheese delivers as much protein (or more) than its flashier and better-funded rival, Greek yogurt.

“High-protein snacks like cheese are trending upward driven in large part by millennials and generation X. Millennials tend to snack to save time and often choose cheese because its protein content helps to keep them full between meals,” said Rachel Kerr of the Wisconsin Milk Marketing Board.

Fresh cottage cheese and aged hard cheeses take well to smoky, spicy and fruity flavors. Millennial consumers like these flavor profiles.

“Hot and spicy flavors continue to dominate trend forecasts,” said Kerr, pointing to flavors such as sriracha, ghost pepper and Carolina reaper peppers.  “In 2017, look for new globally inspired spice blends to join the mix including Latin American, Middle Eastern, Southeast Asian and Mediterranean.”

Whether you are in the cheese business now, are considering adding a production line or just want some flavor ideas, head to the cheese show next month in Madison.