Cheese: Opportunities and Threats in the Mature Markets

Cheese sales are slowing down in mature markets, far below global average

The maturity of the market is putting pressure for brands to add value to their cheese offerings in order to keep share of the market where little new sales are generated. Especially health-orientated dairy products such as Greek yoghurt and other non-dairy products have outperformed dairy foods. Cheese falls behind these innovations as it has not jumped on the health bandwagon fast enough.

Private label as high as 33% in North America and 24% in Western Europe poses a strong threat

Low brand recognition for cheese makes it easier for retailers to give greater shelf space to private label. The rise of private label and its continuing evolution up and down the price spectrum has led to a more price-competitive environment. The low brand recall for cheese increases this threat as consumers are very willing to switch brands.

Packaging plays an important role to add value to cheese

Due to the lengthy process involved in producing cheese, the industry is less robust to respond to consumer trends quickly and benefit from first-mover advantage. Packaging offers considerable added-value benefits that have not yet been explored by the cheese industry such as convenience, “snackification”, indulgence, etc. and is much faster to adopt.

Developments in the alcoholic drinks market to offer an additional pocket of growth for cheese

Easing legislation around wine being sold through supermarkets in Canada and the US could be beneficial to pairing cheese with wine as an additional pocket of growth. If cheese can be purchased in the same store as wine, consumers are more likely to consider pairing one with the other as manufacturers can adjust their POS materials accordingly to tempt consumers.

Cheese’s health credentials to improve over time

Over recent years, scientific research has yielded new insights, and it seems that not all saturated fats are created equal, and that saturated dairy fat, for one, is not as detrimental to health as once thought. The accumulation of such findings is going to have an impact on public health policy in the foreseeable future and cheese should benefit.