How to be the big cheese
The cheese sector is becoming an increasingly active private brand battleground. More retailers are seeking to have their store brands stand out in the crowded sector by offering unique selections that are developed in the U.S. and internationally.
Monrovia, Calif.-based Trader Joe’s, for instance, is spotlighting its imports from Italy, France, Spain, Holland, Germany and New Zealand, while Rochester, N.Y.-based Wegmans Food Markets is highlighting such Italian offerings as Taleggio, Piave and Basajo Blue.
Italian cheeses will account for about 44% of sector revenues in 2019, with mozzarella generating about 35% of dollar sales, reports John Madigan, lead industry research analyst for market researcher IBISWorld in its July “Cheese Production in the US” report.
American cheese, he notes, will generate about 39% of industry revenues, with cheddar accounting for approximately 28% and brick, Colby and cheese curd comprising about 11%.
“There is growing demand for gourmet and specialty cheeses, particularly from France and Italy,” Madigan states. “Shifts in consumer preferences will continue to drive industry sales.”
Yet, getting consumers to purchase unfamiliar cheeses, and especially specialty varieties, still can be vexing, and requires merchandisers to take much of the guesswork out of newer options, analysts say.
Indeed, one of the biggest merchandising challenges is displaying cheese in a way that both educates shoppers and invites them to make a purchase, says Michelle Trowbridge, channel marketing manager for the Madison-based Dairy Farmers of Wisconsin.
“Cheese cases may seem intimidating to consumers who don’t know cheese,” she states. “Many products look the same and without knowledgeable staff, shoppers may not know what to look for. They feel comfortable in only buying what they know.”
Retailers can increase activity by holding sampling and demo events, as Dairy Farmers of Wisconsin research reveals that shoppers are nine times more likely to purchase cheese they tasted, Trowbridge says.
“Stores then can continue to engage with shoppers through meal tips and recipes to encourage repurchase or the trying of new cheeses,” she states. “Showcasing diverse cuts and assortments layered with merchandising and signage also will draw shoppers in and allow them to easily find what they are looking for.”
In addition, retailers should collaborate with their suppliers on all aspects of category management, including assortment, pricing and promotions, says Neil Stahurski, senior customer insights manager for Great Lakes Cheese Co., a Hiram, Ohio-based supplier.
“It is essential that retailers treat their store brands like national brands, with effective packaging, creative signage and proper product placement,” he states.
MONITOR THE PRODUCT MIX
Suppliers have the expertise to pinpoint the optimal products that retailers should offer and detail how the operators can educate consumers about the cheese, says Arturo Nava, marketing director for Nuestro Queso LLC, a Chicago-based supplier of Hispanic cheeses.
“Retailers need to differentiate their offerings from competitors,” he says. “You want to offer the staples while also innovating with more flavors.”
More shoppers, he notes, are seeking better-for-you natural cheeses that are developed from hormone-free animals.
“Consumers want cleaner labels that are easy to understand and to have products that are not too deeply processed,” Nava states.
That growing wellness consciousness is leading more merchandisers to offer a range of reduced-fat or low-fat products, Madigan says, noting that processed cheese is declining in popularity as more consumers opt for healthier options.
“Increasing nutrition and dietary awareness among consumers is a strong determinant for demand of products,” he says. “While cheese offers protein and calcium, it can also be high in sodium and fat.”
Because it’s crucial to determine the best mix of cheese options for each store and the right balance of items on shelves including shreds, slices and chunks, operators should conduct shopper research to learn the cheese purchase decision hierarchy, Stahurski states.
“Minimizing the amount of duplication between brands across forms, flavors and sizes will help streamline the overall shopping experience,” he says.
While Stahurski reports that unique blends with new, bold and spicy flavors are generating greater activity, he adds that “we still see solid growth in the tried and true cheese types like mozzarella, cheddar and Swiss.”
Yet, a focus by younger shoppers on more adventurous eating and innovative selections is helping to trigger launches of novel offerings, Stahurski states.
AN AVALANCHE OF ALTERNATIVES
“Cheese is very dynamic and versatile, and people also are looking beyond its traditional uses, such as just being part of a sandwich,” says Eric Richard, industry relations coordinator for the Madison, Wis.-based International Dairy-Deli-Bakery Association (IDDBA).
The use of cheese for snacking is a potentially strong growth category, he notes, particularly if products are available in single-serve or on-the-go packaging.
Offering smaller portion sizes also enables retailers to generate trials of specialty or other higher-priced items “that shoppers normally would stay away from because of the cost,” Richard says.
Retailers can expose shoppers to different selections by including a variety of cheeses in stores’ prepared foods offerings, he says. “Those consumers might then check out those cheeses in their more original form in the cheese department and on cheese islands,” Richard states.
The most effective merchandising will emphasize cheese health attributes, such as being a good source of protein with minimal ingredients, along with its role as a snack or meal component while offering wider arrays of unique options, he says.
“Consumers are more open to trying new selections and the younger generations are particularly exploratory,” Richard adds.
Indeed, Trowbridge notes that some of the fast-growing cheeses offer unique consumption experiences, including raclette (traditionally melted on the wheel and scraped over boiled potatoes); juustoleipa (a toasted cheese that can be heated by dunking it in coffee); quark (a fresh, spoonable cheese that can be eaten like yogurt); burrata (a parcel of fresh mozzarella stracciatella and sweet cream that oozes over the contents of a plate when cut); and natural cheese crisps (natural cheese that has been baked or dehydrated to form a crunchy snack).
“Carefully curating the own brand offering can address shopper trends from snacking to specialty cheese,” Trowbridge says. “Accessible specialty varieties at accessible price points can attract shoppers new to the specialty cheese case and generate trial and incremental sales of gourmet accompaniments too.”
Mitchell is a contributing writer to Store Brands.