Trend Watch: Are you a cheese wiz at retail?
Editor's note: The following is one of several stories that looks at current and emerging category trends to create store brand opportunities.
Good quality national brand equivalent (NBE) or better-than-NBE products will likely continue to be the basis for growth in the cheese and cheese dip category. However, in order to drive growth to new levels, retailers must look to the changing demographics of their customers and seek to develop and offer new, innovative flavor profiles, says James C. Jordan, director of sales and marketing for Old Fashioned Foods Inc. in Mayville, Wis.
Private brand cheese brands are a major market driver, accounting for more than 40 percent of cheese category dollar sales in 2017, according to Rockville, Md.-based market research firm Packaged Facts’ February report, “U.S. Food Market Outlook, 2018.”
Consumers are clamoring for bolder flavors derived from spices, peppers, smokiness and heat, the report notes.
New product introductions geared toward snacking and increased consumer interest in flavor diversification are important trends impacting the market, according to Packaged Facts’ May report, “Cheese: U.S. Market Trends and Opportunities.”
Creative tweaking will continue to drive innovations for retailers’ own brand programs, Jordan believes.
“Many innovations are centered around some minor variation of the target brand on their shelves,” he says. “These variations offer a better flavor-profiled product that will build stronger consumer loyalty to an own brand program.”
For example, instead of a standard onion flavor, a retailer can take a product to a new level with a superior tasting caramelized onion flavor in a dip product. “Basically, [this functions as] a ‘better-than-brand’ strategy,” Jordan adds.
Demand for salsa con queso should also grow over the next few years, Jordan believes.
“We see a trend toward development of more products utilizing unique types of flavorings and peppers,” he says. “Consumers today are developing the taste for more heat and will seek [it] out. Even though mild and medium salsa con queso items drive sales within the category, a hotter product offers the retailer an opportunity to bring in new users to their own brand program.”
Regional flavors will also play a more important role in the future, Jordan believes. “Different geographic regions have different demands for flavors and product profiles,” he says. “Therefore, it’s important to recognize these geographic consumer differences and to offer products that meet the geographic demands of each consumer group. Currently, national brands offer products that [comprise] a one-size-fits-all approach. Therefore, retailers will be looking for products that will be targeted regionally for their own brand shopper.”
To support innovation efforts, Old Fashioned Foods has expanded its product development, research and development and pilot lab facilities, Jordan says.
In the near future, innovative packaging will give retailers opportunities to grow their own brand share of the category and strengthen shopper loyalty, Jordan believes.
“To date, technology has not been able to offer manufacturers a plastic jar that will hold up during retort shelf-stable cheese dip processing; however, we believe this will soon be coming,” Jordan states.
The ability to offer shelf-stable cheese dip in plastic would give retailers a great opportunity to reduce shipping, handling and breakage costs, which will become an even more important factor as more shoppers purchase products online, he points out.