The great cheese snack attack

They say good things come in small packages, and the nation’s cheesemakers seem to agree. The wave of cheese snacking NPD started last year by the launch of Dairy Crest’s Chedds and First Milk’s Dairy Maniacs is showing no sign of slowing down - just last month, Adams Foods extended its Mu brand into kids Cheddar sticks, following hot on the heels of Norseland, which hit dairy aisles with Simpsons-branded cheese truckles in April.

The more established category players have also been far from idle - Kraft announced a reformulation breakthrough in June, when it relaunched Dairylea with an all-natural recipe, Kerry Foods hit TV screens with Cheestrings Spaghetti in April following a £1.5m push to highlight its calcium content, while Primula unveiled new snacking Pods last month.

This buzz of activity has resulted in the cheese snacks category growing by a healthy 7.5% year-on-year to £326m [Kantar Worldpanel 52 w/e 10 June 2012]. But with the category increasingly busy, how do suppliers ensure their kids snacks stand out? And what are they doing to develop equally successful cheese snacks for adults?

Since Dairy Crest, First Milk and - most recently Adams Foods - entered the kids cheese fray, all have sought to use the “100% real Cheddar” credentials of their products to challenge the processed cheese players, and health messages are now a key part of the kids cheese category.

This is obvious from Kraft and Kerry’s reformulation moves, but also in how Dairy Crest has adjusted its communications strategy for Chedds. Having initially launched Chedds with a surreal TV ad featuring brand mascot Monty Mouseketeer, it has changed tack in its latest campaign, focusing on a more straightforward message to promote the fact Chedds is made with real cheese.

Cathedral City marketing manager Jackie Wilson is clear - the right health messages are vital for a successful kids cheese brand. “Moving forward, if you were going to counsel any supplier then you would recommend this is what they should do in kids snacking,” she says.

Bel UK head of category management Stephen Gregory agrees health is increasingly important, but stresses established brands such as Mini Babybel and The Laughing Cow are just as capable of ticking the healthy-eating box. “Laughing Cow Extra Light has one of the lowest fat and saturated fat contents in the market and now contains 2% fat rather than 3%,” he says.

Of course, as more suppliers start promoting their health credentials, kids cheese snacks need to offer something more than just “naturalness” to stand out from the crowd - having a strong brand is key.

“If you were to counsel any supplier, the health message is what they should do” Jackie Wilson, Dairy Crest

Category stalwarts such as Bel, Dairylea and Cheestrings have an obvious advantage in this regard, and Gregory says Bel is investing heavily to ensure its brands stand out from the crowd. In the past year, the company has run “highly visual and impactful promotions”, including an on-pack offer for Mini Babybel-shaped lunchboxes, and further investment is planned for next year, he says.

But the newcomers are confident they, too, can create stand-out brands. As a sub-brand of Dairy Crest’s Cathedral City, Chedds can leverage the value and recognition of the UK’s number one Cheddar brand. And Adams believes Mu is also strong enough to pull off an extension into the competitive kids snacks category. Since launching in Tesco last October, the brand has generated £2.9m in sales, and Adams Foods insight and innovation director Katy Ryan says kids products are a natural extension. “Mums feel a warmth towards the brand that we feel we can carry across into snacks,” she adds.

Others have opted for high-profile character licences to draw children to their products. Norseland struck a deal with Fox Consumer Products earlier this year to use the Simpsons family on its new cheese truckles, while First Milk has signed a deal with Dreamworks.

The tie-up enables First Milk to refresh Dairy Maniacs on a regular basis, but tying the brand’s fortunes so closely to new releases can be a double-edged sword, admits First Milk commercial director Richard Hollingdale. The initial licence for Kung Fu Panda “did really well at launch”, he says, but when DreamWorks’ next film, Puss in Boots, put in a lacklustre performance, sales of Dairy Maniacs suffered.

However, Hollingdale is confident Dairy Maniacs’ latest tie-up - with CBeebies hit Rastamouse - will boost sales again. “It’s got a bit more ongoing exposure than a one-off movie hit,” he adds.

Adult snacks

While the kids cheese market is heaving with innovation, suppliers have been more reticent when it comes to snacks targeted specifically at adults. Dairy Crest sells a number of snack and lunch packs under its Cathedral City brand, but Wilson admits the sector has proved hard to crack. “All the launches in adult snacks - our own included - have struggled a bit and I think they struggle from being in the wrong place in store,” she says. “Often they’re anchored to brands, and they end up going on the main fixture where people aren’t necessarily in the snacking mindset.”

Despite these challenges, an increasing number of adult-focused snacks are now starting to hit shelves. Dairy Crest has just launched Cathedral City Selections - packs of individually wrapped pieces of Cathedral City Cheddar, which are specifically designed for in-home snacking. Wilson believes offering products that encourage people to snack at home is key to driving consumption of cheese snacks among adults. “Selections don’t sound a complex idea - they are just wrapped pieces of Cheddar - but our trials show consumers snack more on cheese when they have a pack in the fridge.”

Smaller adult-focused snacks are also gaining traction. Bridgehead Food Partners has been steadily acquiring listings for its The Chunky Cheese Co brand, and Long Clawson Dairy has partnered with popular condiments brands Heinz Tomato Ketchup, Tabasco and Lea & Perrins Worcestershire Sauce to develop its own adult snacks.

With the innovation pipeline beginning to look more fluid, the next task for suppliers will be to improve the merchandising of adult cheese snacks so they can compete more successfully with rival snacks such as crisps and chocolate. “That’s a challenge because there are very few snacking products that get dual sited in store,” says Hollingdale.

First Milk has its own, radical solution - it’s looking beyond retailers. The company has just secured a contract with the Emirates airline to sell Lake District Cheddar bites in all its catering outlets. “During the course of this year, over five million people will sample portions, so it’s a different route to market,” says Hollingdale. “If everyone purely focuses on retail, they’ll miss the opportunity in adult snacking.”

There’s no doubt adult cheese snacks will face an uphill battle in their quest to come out of the shadows of the cheese fixture and join kids snacks in the limelight. But with big and small suppliers now throwing their weight behind creative, adult-focused NPD, it’s clear cheesemakers are more determined than ever to make a go of it.