After a tough time in the nineties, cheese is bouncing back, showing healthy growth. The total cheese market is worth £1.4bn and is growing at 5.6% (ACNielsen Scantrak). Retailer brands still account for the vast majority of sales, with pre-packed varieties taking the lion's share. Manufacturers' own brands form a much smaller segment, but are showing significant growth.
Cheddar still commands the biggest slice of the market by volume, with value sales growing steadily, driven by mature Cheddar.
Dairy Crest cheese marketing director David Turner claims its Cathedral City is the top selling Cheddar brand, with 11% volume and 21% value share: "Total brand sales have doubled in the last five years. Sales in pre-pack alone have trebled. Year-on-year sales growth to May stands at 32% according to Taylor Nelson Sofres."
One key to the brand's success, says Turner, has been responding to consumer demand for convenience: "Cooked meat has grown faster than cheese as a category. Why? Because it provides more convenience.
"So Cathedral City was the first Cheddar brand to launch a sliced variant."
Turner says Dairy Crest picks up on consumer trends by keeping lines of communication open with sales outlets: "We constantly go to retailers and ask how we can segment the category."
"We are looking at the market for snacking, as well as making the packaging itself more convenient."
Aside from Cheddar, the most activity is coming from the territorial and speciality cheese sectors.
According to Glanbia, interest has been further provoked in the first half of 2002 by high milk production levels, which have put downward pressure on prices.
This has given manufacturers fresh impetus to develop added value areas  historically a sector which has not been particularly active in terms of new ideas and formats.
Chief executive of Glanbia Foods UK Colin Stump says: "Block Cheddar has seen a shift to brands and own label has lost out a bit. But we have been enjoying the benefits of the increased consumer interest in territorials.
"We have done work to extend excitement in territorials, and work to extend their ages, and that has helped."
Stump says innovation is central to growth. "We are becoming a stronger partner with our retail customers and working closely with them on what we call tiering, producing different types of cheese from low fat up to premium."
He promises a whole range of product entries, both brand and own label, in coming months, "much more aligned to the changing needs of the time-poor cash-rich consumer", with snackability and ease of use the key qualities.
"We want to produce industry leading initiatives," says Stump. "And we are also looking at improving packaging styles without any on-cost. Ease of entry and resealability are crucial but none of the current products on the market does the job very well in our opinion.
"Consumers don't see price as an obstacle with convenience products. The biggest obstacle is being seen as idle!"
The drive for added-value has also led Glanbia to increase its focus on blue cheese.This year Glanbia has brought two blues on to the scene  Tuxford 1780 and Leicester Gold. With over 60% market share, Blue Stilton dwarfs Danish Blue, Italian Dolcelatte and other popular continental varieties of blue cheese. As Stilton cheese can only be made from milk that comes from the three counties of Leicestershire, Derbyshire and Nottinghamshire, Glanbia Foods UK claims its Tuxford & Tebbutt operation in Melton Mowbray, is one of only six creameries able to produce authentic Blue Stilton Cheese.
Glanbia Foods is supporting the launch of Tuxford 1780 and Leicester Gold by working with retailer partners to maximise each product's instore exposure. This will involve a programme of instore sampling, with repeat purchases encouraged via couponing.
Arla pushes Rosenborg
Its interest in Stilton will bring Glanbia into a clash with Arla's Danish Rosenborg blue cheese. Arla, which records blue cheese as seeing 5% value growth, claims the brand's sales are enjoying 52% year-on-year growth and a value of £4.5m. Arla says the speciality cheese sector in multiples grocers is worth £17m and is growing 12% year-on-year, with shoppers experimenting with different varieties.
Not content with taking on blue cheese producers, Arla is also capitalising on the demand for speciality cheese by pushing its Discover.. range which includes feta lines.
Arla claims Discover.. is the fastest growing speciality cheese brand, with 252% growth and a value of £4.4m. It is backed by a marketing spend of £500k and listed at all major retailers. The most recent development in the range is Creme Tapenade, a soft cheese in two varieties: pesto and green olives, which was launched in April.
Arla cheese marketing manager Aaron Prout explains: "Feta is currently the largest growing variety within the speciality cheese sector, with sales growing at 20% year-on-year." Arla's feta cheeses have grown 174% over the last year according to the company.
Greece set to capitalise
Importer EuriLait is being well placed to benefit from Brussels' ruling on the term feta being restricted to Greek product, an edict highly unpopular with producers outside Greece. EuriLait is the largest importer of Greek feta into the UK in alliance with Mevgal.
Chief executive John Spencer expects the Greeks to capitalise vigorously on the Protected Designation of Origin ruling. "I would be very surprised if there were not a major advertising effort," he says. "A good example of the influence of travel is the enormous expansion in feta sales in the UK. Over the past few years growth has been nothing short of dynamic but the market has been fragmented by the sale of cheese marketed as feta which is neither Greek nor made from the traditional blend of ewes and goats milk. However, with the recent award of PDO to Greek feta the consumer will be sure that the product they buy here will be the same as that experienced in Greece."
Arla, meanwhile, with some of its feta production from Danish sources, says it is currently "discussing options" at the moment.
Despite all this abundant activity at the premium end of the market, British Cheese Board president Nigel White believes retailers are missing out by focusing on price promotions Demand for cheese is price inelastic and reducing prices is a very ineffective way of tempting consumers to buy more.
"Every retailer wants to give best value for money to its customers but price is not the be all and end all. The opportunity is to enthuse consumers about the versatility and range of cheese available. Even simple issues like staff training, minimising out of stock positions, better sign-posting at point of sale and more informative/consumer friendly labelling will generate increased sales. Why not put the money spent on BOGOFs into these types of activities rather than squeeze margins?"
He thinks labelling could highlight the nutritional benefits of cheese and more accurately communicate its over-exaggerated fat content.
The Milk Development Council's Say Cheese Campaign, running since January, has attempted to convey this message to children and adults alike. Labelling could also be used to attract shoppers to the character of individual cheeses, says White. "Compared to wine there is virtually no information given on cheese packs about its origin, taste and texture, ways in which it can be used or drinks that go well with it."
He also sees considerable scope for retailers and manufacturers to boost cheese sales by using it as an ingredient in upmarket retail brand meal ranges: "In the last 15 years, the proportion of cheese sold through supermarkets has risen from around half to about 85-90%.
"But they haven't grown the market. Most of this growth has come through the manufacturers using cheese on pizzas and in ready meals."
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Cheddar still commands the biggest slice of the market by volume, with value sales growing steadily, driven by mature Cheddar.
Dairy Crest cheese marketing director David Turner claims its Cathedral City is the top selling Cheddar brand, with 11% volume and 21% value share: "Total brand sales have doubled in the last five years. Sales in pre-pack alone have trebled. Year-on-year sales growth to May stands at 32% according to Taylor Nelson Sofres."
One key to the brand's success, says Turner, has been responding to consumer demand for convenience: "Cooked meat has grown faster than cheese as a category. Why? Because it provides more convenience.
"So Cathedral City was the first Cheddar brand to launch a sliced variant."
Turner says Dairy Crest picks up on consumer trends by keeping lines of communication open with sales outlets: "We constantly go to retailers and ask how we can segment the category."
"We are looking at the market for snacking, as well as making the packaging itself more convenient."
Aside from Cheddar, the most activity is coming from the territorial and speciality cheese sectors.
According to Glanbia, interest has been further provoked in the first half of 2002 by high milk production levels, which have put downward pressure on prices.
This has given manufacturers fresh impetus to develop added value areas  historically a sector which has not been particularly active in terms of new ideas and formats.
Chief executive of Glanbia Foods UK Colin Stump says: "Block Cheddar has seen a shift to brands and own label has lost out a bit. But we have been enjoying the benefits of the increased consumer interest in territorials.
"We have done work to extend excitement in territorials, and work to extend their ages, and that has helped."
Stump says innovation is central to growth. "We are becoming a stronger partner with our retail customers and working closely with them on what we call tiering, producing different types of cheese from low fat up to premium."
He promises a whole range of product entries, both brand and own label, in coming months, "much more aligned to the changing needs of the time-poor cash-rich consumer", with snackability and ease of use the key qualities.
"We want to produce industry leading initiatives," says Stump. "And we are also looking at improving packaging styles without any on-cost. Ease of entry and resealability are crucial but none of the current products on the market does the job very well in our opinion.
"Consumers don't see price as an obstacle with convenience products. The biggest obstacle is being seen as idle!"
The drive for added-value has also led Glanbia to increase its focus on blue cheese.This year Glanbia has brought two blues on to the scene  Tuxford 1780 and Leicester Gold. With over 60% market share, Blue Stilton dwarfs Danish Blue, Italian Dolcelatte and other popular continental varieties of blue cheese. As Stilton cheese can only be made from milk that comes from the three counties of Leicestershire, Derbyshire and Nottinghamshire, Glanbia Foods UK claims its Tuxford & Tebbutt operation in Melton Mowbray, is one of only six creameries able to produce authentic Blue Stilton Cheese.
Glanbia Foods is supporting the launch of Tuxford 1780 and Leicester Gold by working with retailer partners to maximise each product's instore exposure. This will involve a programme of instore sampling, with repeat purchases encouraged via couponing.
Arla pushes Rosenborg
Its interest in Stilton will bring Glanbia into a clash with Arla's Danish Rosenborg blue cheese. Arla, which records blue cheese as seeing 5% value growth, claims the brand's sales are enjoying 52% year-on-year growth and a value of £4.5m. Arla says the speciality cheese sector in multiples grocers is worth £17m and is growing 12% year-on-year, with shoppers experimenting with different varieties.
Not content with taking on blue cheese producers, Arla is also capitalising on the demand for speciality cheese by pushing its Discover.. range which includes feta lines.
Arla claims Discover.. is the fastest growing speciality cheese brand, with 252% growth and a value of £4.4m. It is backed by a marketing spend of £500k and listed at all major retailers. The most recent development in the range is Creme Tapenade, a soft cheese in two varieties: pesto and green olives, which was launched in April.
Arla cheese marketing manager Aaron Prout explains: "Feta is currently the largest growing variety within the speciality cheese sector, with sales growing at 20% year-on-year." Arla's feta cheeses have grown 174% over the last year according to the company.
Greece set to capitalise
Importer EuriLait is being well placed to benefit from Brussels' ruling on the term feta being restricted to Greek product, an edict highly unpopular with producers outside Greece. EuriLait is the largest importer of Greek feta into the UK in alliance with Mevgal.
Chief executive John Spencer expects the Greeks to capitalise vigorously on the Protected Designation of Origin ruling. "I would be very surprised if there were not a major advertising effort," he says. "A good example of the influence of travel is the enormous expansion in feta sales in the UK. Over the past few years growth has been nothing short of dynamic but the market has been fragmented by the sale of cheese marketed as feta which is neither Greek nor made from the traditional blend of ewes and goats milk. However, with the recent award of PDO to Greek feta the consumer will be sure that the product they buy here will be the same as that experienced in Greece."
Arla, meanwhile, with some of its feta production from Danish sources, says it is currently "discussing options" at the moment.
Despite all this abundant activity at the premium end of the market, British Cheese Board president Nigel White believes retailers are missing out by focusing on price promotions Demand for cheese is price inelastic and reducing prices is a very ineffective way of tempting consumers to buy more.
"Every retailer wants to give best value for money to its customers but price is not the be all and end all. The opportunity is to enthuse consumers about the versatility and range of cheese available. Even simple issues like staff training, minimising out of stock positions, better sign-posting at point of sale and more informative/consumer friendly labelling will generate increased sales. Why not put the money spent on BOGOFs into these types of activities rather than squeeze margins?"
He thinks labelling could highlight the nutritional benefits of cheese and more accurately communicate its over-exaggerated fat content.
The Milk Development Council's Say Cheese Campaign, running since January, has attempted to convey this message to children and adults alike. Labelling could also be used to attract shoppers to the character of individual cheeses, says White. "Compared to wine there is virtually no information given on cheese packs about its origin, taste and texture, ways in which it can be used or drinks that go well with it."
He also sees considerable scope for retailers and manufacturers to boost cheese sales by using it as an ingredient in upmarket retail brand meal ranges: "In the last 15 years, the proportion of cheese sold through supermarkets has risen from around half to about 85-90%.
"But they haven't grown the market. Most of this growth has come through the manufacturers using cheese on pizzas and in ready meals."
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