Natural and Specialty Cheese Markets in the U.S. and Globally
(Almost) everybody loves cheese: 90% of adults surveyed by Packaged Facts say they eat it. Both adults and kids eat it at home, in restaurants, and as an on-the-go snack throughout the day. Perceptions suggest that natural cheese is healthier and more nutritious than processed cheese, which has led consumers to prefer the natural options. Consumption of natural cheese has been increasing over the last 10 years, while processed cheese has declined.
Total U.S. sales of natural and specialty cheeses were $15.7 billion in 2013. The cheese market is mature, with sales growing by a CAGR of 3% since 2009. The recession caused fluctuation in volume sales, which led to higher pricing of cheeses in some years, which in turn drove some of the market dollar growth.
Even so, key segments of the cheese market continue with their growth. Increased sales will be driven by American’s lasting love for cheese products, and the continued promotion of natural cheese being nutritious as well as good tasting, despite the high fat content. Consumers are being educated to the fact that cheese is a good source of calcium, protein, and other nutrients – which consumers take to heart due to their love of the product. With snacks representing 50% of eating occasions, natural cheese is in a position to gain a greater market share over snack products such as chips and cookies, particularly with carbs and added sugars. Producers are also addressing consumer health and diet concerns with healthier, better tasting cheeses with reduced salt and fat content, as well as cheese made from milk. The cheese products made from organic milk, milk from grass-fed cows, and milk free of artificial growth hormones have also become more trendy. Organic cheese has been a growth spot, with sales projected to increase by double digits to reach $750 million in 2018.
Due to the fat content, cheese has been seen as an indulgent experience. This in turn has led to a demand of cheese that is high-quality, full-flavored, as well as authentically made to standard and tradition. The broadening of the American palette beyond the traditional favorites, such as Cheddar and Mozzarella, is driving growth of specialty and international or regional cheeses. Aged and artisanal products with robust flavor profiles and textures continue to flourish. With this new craving of specialty cheeses mass brands are creating bolder flavors with smoky, peppery, and gourmet varieties with savory spice, nut, and even dried fruit inclusion to meet consumer’s needs.
A high amount of natural and specialty cheese sales are come from mass retail outlets such as supermarkets, natural grocery chains, mass merchandisers/supercenters, and warehouse club stores. The most successful retailers in this group have built upscale cheese departments or have upgraded their departments to feature more specialty cheeses and complementary products. The store brand natural and specialty cheese business is significant, accounting for over 40% of total sales in 2013. The cheese industry is quite fragmented in the U.S. with only a couple of very large, several mid-size and numerous small manufacturers competing in the market. Kraft is the leader, but holds only 18% share of total sales.
Many of the cheese product trends found in the retail market start in foodservice, especially in restaurants. Cheese is used abundantly in many menu items, and one of the biggest opportunities for cheese is in the growing breakfast sandwich segment. Globally, the greatest growth potential for cheese is in emerging markets where newly middle class consumers are adopting “Westernized” diets that include dairy products. Emerging market growth represents a significant opportunity for export, since many of these markets do not produce enough milk to satisfy domestic demand for dairy and cheese products.
Scope of Report and Methodology
Packaged Fact’s Natural and Specialty Cheese Markets in the U.S. and Globally includes a detailed analysis of the U.S. consumer market for natural ad specialty cheese sold to consumers through retail outlets, including “bricks and mortar” stores as well as catalogues, online stores and others. The report also outlines the key threats and trends affecting the overall market and analyzes all cheese product categories and segments of both natural and specialty cheeses. Major players and brands are discussed and their key activities and performance. Market size data are provided for 2009–2013 and projections for 2014–2018. Retail channels that sell consumer-ready natural and specialty cheese are covered as well as analysis on market size and trends, and competitive analysis. To add context and perspective, information and insight is provided for processed cheese, and non-dairy cheese products, as well as the foodservice and global cheese markets.
The information in this report was obtained from both primary and secondary research. Primary research included consultation with industry sources and on-site examinations of the retail sector. Secondary research included gathering data from relevant trade, business and government sources, as well as company promotional literature and annual reports. Our estimation of market size and company performance are based on various sources including reported revenues of product manufacturers and retailers; IRI, which tracks data in mass retail outlets; and publications and other market research sources. Our analysis of consumer trends relies on data from several sources including government reports, a national online consumer usage survey conducted in January/February 2014 by Packaged Facts, and Simmons National Consumer Surveys for Spring 2004 through Summer 2013, from Experian Marketing Services. On an ongoing basis, Experian Marketing Services conducts booklet-based surveys of a large and random sample of consumers (approximately 25,000 for each 12-month survey compilation) who in aggregate represent a statistically accurate cross-section of the U.S. population.
Market Insights: A Selection From The Report U.S. Cheese Production
Cheese producers in the U.S. range from small family farmers to global conglomerates. Some market their own cheeses while others produce to supply others exclusively. Data presented in Natural and Specialty Cheese Markets in the U.S. and Globally includes production of cheese for all markets, domestic and export, including retail, foodservice and food processing.
U.S. Production of Natural Cheese Continues to Grow
Continuing an upward trend, the total production of natural cheese in the United States exceeded 10 billion pounds in 2012. Production grew at a CAGR of 2.5% between 2008 and 2012. The USDA estimated that production rose about 2% in 2013. Producers make Italian cheeses more than any other kind, with mozzarella the largest individual variety. Italian cheese production growth has outpaced American cheese production reflecting the growth of the pizza industry, as well as the mainstreaming of Italian cuisine. Production of cheddar actually declined over the last five years, the only variety to experience a decline. Other American varieties such as Colby, Monterey, and Jack grew at a rapid rate. Production of all other cheese varieties grew at faster than average pace with growth driven by Muenster and Hispanic cheeses in particular
Move over mozzarella. Ciao cheddar. There’s a new cheese in town. Indeed, there’s a smorgasbord of exotic cheeses finding their way into meals nationwide as food manufacturers and restaurateurs seek to satisfy consumer demand for more indulgent and healthier cheese options, according to Natural and Specialty Cheese Markets in the U.S. and Globally, a recent report by market research publisher Packaged Facts. Retail dollar sales in the $16 billion natural and specialty cheese market are forecast to grow by a compound annual growth rate (CAGR) of 4% during 2014-2018.
“The broadening of the American palette beyond traditional favorites, cheddar and mozzarella, is driving growth of higher priced specialty and ethnic cheeses. Consumers are generally looking for products that are more indulgent, with new tastes and experiences, or healthier, more nutritious indulgences that still taste good,” says Packaged Facts research director David Sprinkle.
On the indulgent side, flavors of some newly launched cheeses continue to be more robust, with smoky, peppery, and gourmet varieties most prevalent. On the health side, marketers have continued to promote cheese as fundamentally nutritious and good tasting, despite its high fat content. Sodium as well as fat content are challenges to growth, and marketers have been addressing consumer health and diet concerns with better tasting reduced salt and fat cheeses, and cheeses made from healthier milk. Various recent healthier, better-for-you cheese launches address other needs and desires such as low lactose/lactose free and organic ingredients.
Cheese sales have also benefitted from the snacking trend. Marketers are introducing products that cater to hectic, busy consumers looking for convenience in the form of products that are easy to use and store while also good for on-the-go consumption. These and other products also address the needs of the growing single or dual household segment that wants smaller sizes that are easier and more affordable to purchase and consume. Meanwhile, moms perhaps are the real heroes when purchasing cheese products, and they drive sales of snack-friendly forms such as string/stick cheese given to their kids.
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About Packaged Facts – Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer demographics and shopper insights, consumer financial products and services, consumer goods and retailing, consumer packaged goods, and pet products and services. Packaged Facts also offers a full range of custom research services.
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