# Presentation: 032411

## The Specialty Cheese Market

- in the United States

- presented by
- Paul Savello, Ph.D.
- Ministerio de Ganadería, Agricultura y Pesca

## ¡Gracias a los expertos en lácteos visitantespor su tiempo e interés en ayudarel sector lácteo del Uruguay!

## Summary

- Cheese consumption in U.S. increased during past 30 years
- Specialty cheese market helping to drive the per capita consumption
- Specialty cheese retail sales – U$S 2.4 billion in 2000 with growth to U$S 2.9 billion in 2005
- Four P’s (Product, Promotion, Place, Price) of marketing used to describe the specialty cheese market
- Need to uncover a niche product

## Summary

- Most rapidly growing niche market is ethnic cheese market
- Hispanic style cheese is fastest growing sector
- “Farmstead”/”artisan” cheese market rapidly growing in specific geographic areas
- Opportunities exist for international manufacturers of specialty cheeses in the U.S. market

## Slide 5

## Slide 6

## Slide 7

## Cheese Consumption Increase

- Consumer desire for new cheese varieties in convenient forms and packages
- Consumers willing to try new varieties of cheese
- Consumer willing to pay premium for the new varieties
- Dairy Management Inc. (Rosemont, Illinois):  74% of consumers “love the taste of cheese” and 78% want to try “new and different varieties”

## Cheese Consumption Increase

- Health conscious consumer – calcium and protein in cheese
- New cheese varieties (imported or manufactured by artisan cheesemakers) turn non-cheese consumers into users or occasional cheese users
- Farmstead/artisan cheeses represent small portion of total cheese market, but these cheeses show significant opportunity for market growth

## Cheese Consumption Increase

- Jim Path (University of Wisconsin Center for Dairy Research) defines “specialty cheese” as
- 		*“**cheese that is low in production volume –*
*	**	**less than 40 million pounds annually...labor*
*	**	**intensive...perception of value added product...*
*	**	**may have ethnic background...special*
*	**	**manufacturing process or packaging”*

## Specialty Cheese – Market Overview

- Nature of specialty cheese derived from one or more _unique_ qualities:
*	**Exotic origin*
*	**Particular processing*
*	**Design*
*	**Limited supply*
*	**Unusual application or use*
*	**Extraordinary packaging or channel of sale*

## Specialty Cheese – Market Overview

- Why is specialty cheese market increasing?
*Subtle variations in textures, flavors*
*Ethnic heritages*
*Perfect match for today’s adventurous and flavor-seeking consumer*
*Quality and variety of specialty cheeses advances due to:*
*	*innovation, research, global 	migrations of cheesemakers, 	craftsmanship programs

## Specialty Cheese – Market Overview

- Artisan cheeses have great reception in market
- Goat cheese one of the most popular specialty cheeses
- Retailers can carry as many as 50 varieties of goat cheese

## Specialty Cheeses – Retail Growth

- Fastest growing at retail – Asiago cheese
- Next – Gorgonzola, Provolone, Muenster, Colby Jack, Brie, Goat, Blue, Havarti, Swiss
- Ten years ago, consumers not even aware of cheeses such as Asiago, Gorgonzola, or Havarti

## Slide 15

## Specialty Cheeses – Retail Growth

- Specialty cheeses sold in “deli” departments of supermarkets
- Commodity cheeses sold in pre-packaged, set weight varieties in the dairy case
- Research of Fromartharie (New Jersey):
*“**most shoppers purchase commodity cheese for cooking and baking, while they shop the deli case for entertaining”*

## Specialty Cheeses – Retail Growth

- Packaged Facts report “U.S. Gourmet Specialty Foods Market:”
*Supermarkets – 55% of specialty cheese sales*
*Specialty cheese stores – 30% of sales*
*Health/natural food stores – 5% of sales*
*Warehouse clubs – 4% of sales*
*Other retail outlets – 6% of sales*

## Specialty Cheeses – Retail Growth

- Supermarket Business 2000 Expenditure Survey
*Cheese category at 35.5% gross profit margin compared to 29.8% gross profit margin for entire dairy department*

- International Dairy-Deli-Bakery Association (IDDBA) 2001annual foodservice trend report
*“**Cheese has highest gross profit margin of any product sold in dairy department of grocery stores”*

## Specialty Cheeses – Retail Growth

- Supermarket consumers choosing more farmstead/artisan and ethnic cheeses – due to rebirth of “cheese course” at restaurants
- Greek feta cheese (including flavored feta cheeses) increased 30% in retail sales last year
- “Other” Italian cheeses and Hispanic varieties significantly increasing in retail sales

## Specialty Cheeses – Retail Growth

- Consumer data important in specialty cheese market
*Consumers with household income >$250,000 more than 4x likely to purchase Brie cheese over other cheeses*
*Professionals and consumers with incomes >$100,000 more likely to choose Camembert cheese*
*Havarti cheese has high appeal to middle income consumers earning $50,000 to $59,000*

## Specialty Cheeses – Retail Promotion

- Gourmet Retailer report
*60% of retailers offer full-service cheese counter*
*1/3 of supermarkets offer up to 300 individual specialty cheeses*
*60% said that artisan cheese makes up more than 50% of the cheese case*
*Most effective ways to promote specialty cheese are sampling/demonstrations and staff recommendations*

## Specialty Cheeses – Retail Promotion

- Gourmet Retailer report
*Educational “signage” important*
*Type, age, taste profile, country of origin, serving suggestions, care instructions*
*A cheese-wine pairing guide helps promote cheese sales*

## Specialty Cheeses – Education

- University of Wisconsin Center for Dairy Research
*Dutch Cheese Artisan Course*
*Wisconsin Cheese Grading Short Course*
*Applied Dairy Chemistry Short Course*
*Quality Assurance Short Course*
*Wisconsin Cheese Technology Short Course*
*Wisconsin Master Cheesemaker**® **Program*

## Specialty Cheeses – Education

- American Cheese Society
*Special attention to specialty and farmstead cheeses from cow’s, goat’s, sheep milk*
*“**Farmstead” cheese – handmade in small quantities produced on the farm using only milk from the herd located on that farm*
*Farmstead producer can direct cheesemaking process from determining the animal’s feed through the final aging of the cheese*

## Ethnic/Niche Markets

- By 2010 ethnic food sales in U.S. will reach U$S75 billion per year
- Fastest growing ethnic market is Hispanic community
*U$S 421 billion spending power*
*Hispanic food sales to grow 5.5% per year over the next 50 years*
*U.S. is world’s fifth largest Hispanic marketplace*

## Slide 26

## Slide 27

## Slide 28

## Ethnic/Niche Markets

- Other ethnic/niche cheese markets
*Greek feta cheese*
*Kosher cheeses*
*English style cheeses*
*Farmstead cheeses*

## Farmstead/Artisan Cheeses

- Wisconsin’s Full Circle Farm – current interest in naturally-occurring fatty acid found in dairy products that may have cancer-fighting abilities
- Introduced artisan cheese produced from milk of grass-fed cows to promote these health benefits
- Takes advantage of the higher than normal level of “conjugated linoleic acid (CLA)” in the milk/cheese
- Web site (_[www.](http://www.fullcirclefarm.net/)__[fullcirclefarm](http://www.fullcirclefarm.net/)__[.net](http://www.fullcirclefarm.net/)_) provides detailed description of farm including quietness, humane treatment of animals, fresh grass and clove, farm’s family history

## Special “niche” markets

- (with “sub-niches”) for
- Specialty Cheeses

- Supermarket chain “Whole Foods Market” of United States and Canada provides an interesting and opportunistic example/possibility for Uruguay’s dairy industry in the “niche” and “sub-niche” markets
- Uruguay’s cheese sector (industry and artisan) can provide value-added cheese varieties to the Whole Foods Market chain for the chain’s local, regional, and national markets

## Summary

- Cheese consumption in U.S. increased during past 30 years
- Specialty cheese market helping to drive the per capita consumption
- Specialty cheese retail sales – U$S 2.4 billion in 2000
- Four P’s (Product, Promotion, Place, Price) of marketing used to describe the specialty cheese market
- Need to uncover a niche product

## Summary

- Most rapidly growing niche market is ethnic cheese market
- Hispanic style cheese is fastest growing sector
- “Farmstead” cheese market rapidly growing in specific geographic areas
- Opportunities exist for international manufacturers of specialty cheeses in the U.S. market