Dairy – cheese 2021: UK’s cheese lovers spend extra £49m

The nation’s love of cheese is still going strong. The category has added £49.4m in the past year, as an extra 4.6 million kilos went through grocery tills.

Sure, it’s not quite last year’s lockdown-driven gain of £257.6m. But it’s still a powerful indication of cheese’s ongoing revival – first recognised in the Top Products Survey 2019, after a few years of uncertainty.

Of the top 20 brands, 15 are in growth. Own label has put in an even better performance. It’s up 2.1% in value (£31.3m), while brands have grown 1.5% (£18.1m).

“Private label continues to see growth ahead of brands as retailers increasingly focus on their own ranges,” says Matthew Fleming, NielsenIQ client manager.

At the same time, own label is appealing to the growing number of shoppers “seeking value options”, says one industry source. Indeed, own label’s average price per kilo stands at £6.78 – 20.8% lower than the £8.57 of branded cheeses.

This trend plays to the strengths of the discounters (not included in this data), who “significantly under-index in relation to branded cheeses, and have seen a strong turnaround in own label cheese sales”.

It also helps that the fastest-growing segments of cheddar are convenience-led formats such as grated and sliced cheese, the source adds. “Brands have less representation in these segments and this has helped further support the growth in own label.”

Plus, own label’s sales were boosted by fewer branded promotions and the retailer emphasis on everyday low prices, the industry source suggests.

Although most brands have still gained sales in the face of these pressures, five have declined. The biggest loser is Ornua Foods’ Pilgrims Choice. The UK’s number two in cheddar, and fourth biggest cheese brand overall, has lost £17.3m (20.5%) on volumes down 16.2%.

 

Ornua brands director Kerry Alexander points to a return to regular spending patterns as the key driver of this fall. Last year, Pilgrims Choice “undoubtedly benefited from a Covid-driven change in consumer behaviour as they shifted to cooking and entertaining at home, cooking from scratch, baking and treating themselves” she says.

These extraordinary “one-off factors” have now unwound, Alexander says. But she insists the brand is still in a strong position and has this year “maintained a stable share” in the market.

Ornua has “exciting plans to strengthen our proposition and distinctiveness” adds Alexander. These include a marketing push next year that will play up Pilgrims Choice’s taste and sustainability credentials (following autumn 2020’s switch to packaging that uses 40% less plastic than standard cheese blocks).

Market leader Cathedral City is taking the same tack, with plans to move to 100% recyclable packaging next year. Similarly to Pilgrims Choice, it’s suffered a slump in the wake of the Covid boom. The brand has seen volumes fall by 1.7%, having “struggled as a combination of reduced ranges and promotions pulls performance back” notes NielsenIQ’s Fleming.

But owner Saputo Dairy UK insists the brand is still tracking ahead of 2019 figures, and “has held volume ahead of the category in the brand’s heartland block sector as well as in sliced and the adult snacking sectors”.

Cathedral City continues to resonate with consumers, Saputo adds, pointing to the ‘Reasons for Cathedral City’ TV campaign last winter, which reached more than 10 million of its target family demographic.

Innovation is another key focus for the brand. In September, it partnered with Iceland to move into frozen with a four-strong range of Cauliflower Cheese, Mac ‘n’ Cheese, Extra Mature Cheddar Cheesy Mash and Cheesy Flatbread. This is part of its ongoing bid to “maintain relevance in shoppers’ lives and to support our retailers” says Saputo marketing controller Neil Stewart.

Plus, Cathedral City has another advantage: price. Selling an at average of £7.57 per kilo, it’s cheaper than many of its rivals. And markedly cheaper than faster-falling cheddar rival Seriously at £8.70. Heloise Le Norcy-Trott, group marketing director at owner Lactalis, admits price impacted sales, pushing down volumes by 15.9%.

But she stresses the brand’s heartland is extra mature, which is a pricier variety – and Lactalis is working with retailers to “unlock the potential of higher maturities of cheddar”.

Premium brand Davidstow appears to have already unlocked that potential. The brand, which ages its cheddars for 12 to 36 months and sells at an average of £9.10 per kilo, has grown value by 20.1% – albeit from a much smaller base than Seriously.

Davidstow marketing controller Jonathan Westlake says performance was a down to a combination of distribution gains in the mults “underpinned by an intelligent promotional plan”, alongside new listings in farm shops, artisan delis and foodservice.

The brand further boosted its profile via the launch of a DTC proposition last December, which “continues to recruit new custom and grow repeat business” he adds.

Continental growth

This desire for something a little fancier is also showing in the growth of continental brands. Take Lactalis’ Galbani and Président, which have posted value increases of 24.4% and 11.6% respectively. That’s an extra £8.2m between them.

Their growth was driven in part by the “ongoing trend for consumers choosing premium options” Le Norcy-Trott says.

The same trend benefited Bel UK’s Boursin brand, which saw sales climb 17.1% on volumes up 21.4%. It’s aiming to add further value with the addition of a plant-based variant this month, following the autumn launch of Hot Cheese Bites.

Boursin’s performance is poles apart from that of less premium stablemate The Laughing Cow. Having lost £4.8m, the brand hopes the April launch of the “category first” Laughing Cow Blends – a mix of cheese, chickpeas and herbs – will return value in 2022. Bel puts the brand’s decline this year down to lower demand for portioned cheese.

Spreadable cheese, by contrast, seems to have fared better. Dairylea and Philadelphia, for instance, delivered a combined £14m gain for owner Mondelez, which credits a resurgence in on-the go consumption and demand for snacking variants.

All of which shows the British love of cheese can take many forms.