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Cheese - UK - October 2011

“Many consumers appear to increasingly view cheese as a small indulgence for which health is not a major consideration. A poor perception of low-fat options is one of the main barriers to growth of the segment as 44% think that reduced-fat cheese tastes bland, with males in particular holding this view.”

– Chris Wisson, Senior Food Analyst

Some questions answered in the report include:

  • How have promotions shaped the cheese market?
  • Do consumers want reduced-fat cheeses?
  • Is the decline in use of cheese in lunchboxes reversible?
  • How can brands encourage higher usage among over-55s?

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Forecast
                • Figure 1: Forecast of UK retail sales of cheese, by value, 2006-16
              • Market factors
                • Rising costs put pressure on margins
                  • Evenings in benefit cheese
                    • Interest in healthy eating poses a challenge
                      • Demographic changes pose opportunities and challenges
                        • Companies, brands and innovation
                          • Figure 2: Brands’ retail value shares in the cheese market, 2010
                        • Cathedral City leads a fragmented market
                          • NPD growth in convenient packaging and reduced/no-fat options since 2008
                            • Figure 3: Most common claims in new product launches in the UK cheese market, 2008-11*
                          • Cathedral City dominates adspend in 2011
                            • The consumer
                              • Sandwiches remain the main use for cheese
                                • Figure 4: Usage of cheese at home, by occasion, July 2011
                              • Promotions play a key role in cheese
                                • Figure 5: Attitudes towards cheese, July 2011
                              • Purchasing considerations also driven by price
                                • Figure 6: Factors looked for when buying cheese, July 2011
                              • What we think
                              • Issues in the Market

                                  • How have promotions shaped the cheese market?
                                    • Do consumers want reduced-fat cheeses?
                                      • Is the decline in use of cheese in lunchboxes reversible?
                                        • How can brands encourage higher usage among over-55s?
                                        • Future Opportunities

                                            • Guiding Choice
                                              • FSTR & HYPR
                                              • Internal Market Environment

                                                • Key points
                                                  • Evenings in and home cooking on the rise
                                                    • Figure 7: Trends in attitudes towards home cooking, 2007-11
                                                  • Healthy eating remains important, but there is also demand for indulgence
                                                    • Figure 8: Trends in attitudes towards healthy eating, 2007-11
                                                  • Interest in provenance recovers from previous years’ decline
                                                      • Figure 9: Trends in attitudes towards provenance, 2007-11
                                                  • Broader Market Environment

                                                    • Key points
                                                      • Consumers to remain conservative with limited value market growth
                                                        • Figure 10: Consumer confidence index, monthly, January 2007-August 2011
                                                      • Growing potential for cheese in the children’s segment
                                                        • Figure 11: Projected trends in the UK population, by age group, 2011-16
                                                      • 25-34-year-olds key to growth for the cheese market
                                                        • Ageing of UK population a potential threat to the market
                                                          • Growth of ABs brings opportunities for added-value segments
                                                            • Figure 12: Projected trends in the UK population, by socio-economic group, 2011-16
                                                        • Competitive Context

                                                          • Key points
                                                            • Cheese is benefiting from the ‘make-it-yourself’ trend
                                                              • Packed lunches gained popularity in the recession
                                                                  • Figure 13: UK retail sales of selected categories competing with cheese, 2006-10
                                                                • Cheese category heavily driven by price
                                                                • Strengths and Weaknesses

                                                                  • Strengths
                                                                    • Weaknesses
                                                                    • Who’s Innovating?

                                                                      • Key points
                                                                        • Own-label innovation closes the gap on brands
                                                                          • Figure 14: New product launches in the UK cheese market: own-label vs brands, 2008-11*
                                                                          • Figure 15: NPD, by company, 2010
                                                                          • Figure 16: NPD in the UK cheese market by ultimate company, top ten and others, 2008-11*
                                                                        • Health and convenience remain top claims in product launches
                                                                          • Figure 17: New product launches in the UK cheese market, by ten most common claims, 2008-11*
                                                                        • Key themes in new launches
                                                                          • Lower-fat cheeses continue to thrive in NPD
                                                                            • Convenience attracts a sizeable minority of consumers
                                                                              • New launches with no additives/preservatives target the kids’ segment
                                                                              • Market Size and Forecast

                                                                                • Key points
                                                                                  • Strong promotional activity boosts volume sales
                                                                                    • Figure 18: UK retail volume and value sales of cheese, at current and constant prices, 2006-11
                                                                                    • Figure 19: UK retail sales of cheese: value and annual change, 2006-10
                                                                                  • Volume sales jump as promotions dominate the market
                                                                                    • Value sales continue to grow
                                                                                      • Price continues to grow in importance
                                                                                        • Forecast
                                                                                          • Figure 20: Forecast of UK retail sales of cheese, by value, 2006-16
                                                                                          • Figure 21: Forecast of UK retail sales of cheese, by volume, 2006-16
                                                                                          • Figure 22: Forecast of UK retail sales of cheese, by value, 2006-16
                                                                                          • Figure 23: Forecast of UK retail sales of cheese, by volume, 2006-16
                                                                                        • Forecast methodology
                                                                                        • Segment Performance

                                                                                          • Key points
                                                                                            • Cheddar tightens its grip on the market
                                                                                              • Figure 24: UK Retail value and volume sales of cheese, by type, 2009 and 2010
                                                                                              • Figure 25: UK Retail value and volume sales of cheddar, by type, 2009/10 and 2010/11
                                                                                            • Continental and blue cheeses show promising growth
                                                                                              • Recipe cheeses surge as they tap into consumer trends
                                                                                                • Sales of territorial cheeses slow as customers focus on value
                                                                                                  • Sales of processed cheese stagnate as focus on health grows
                                                                                                  • Market Share

                                                                                                    • Key points
                                                                                                      • Brands grow as consumers continue to seek value and health
                                                                                                        • Figure 26: Brands’ retail value shares in cheese, 2008-10
                                                                                                    • Companies and Products

                                                                                                      • Bel UK
                                                                                                        • Dairy Crest
                                                                                                          • Kraft Foods
                                                                                                            • Lactalis McLelland
                                                                                                              • Adams Foods
                                                                                                                • Wyke Farms
                                                                                                                • Brand Research

                                                                                                                  • Brand map
                                                                                                                      • Figure 27: Attitudes towards and usage of cheese brands, August 2011
                                                                                                                    • Brand attitudes
                                                                                                                      • Figure 28: Attitudes, by cheese brand, August 2011
                                                                                                                    • Brand personality
                                                                                                                      • Figure 29: Cheese brand personality – macro image, August 2011
                                                                                                                      • Figure 30: Cheese brand personality – micro image, August 2011
                                                                                                                    • Correspondence analysis
                                                                                                                      • Brand experience
                                                                                                                        • Figure 31: Cheese brand usage, August 2011
                                                                                                                        • Figure 32: Satisfaction with various cheese brands, August 2011
                                                                                                                        • Figure 33: Consideration of cheese brands, August 2011
                                                                                                                        • Figure 34: Consumer perceptions of current cheese brand performance, August 2011
                                                                                                                        • Figure 35: Cheese brand recommendation – Net Promoter Score, August 2011
                                                                                                                      • Brand index
                                                                                                                        • Figure 36: Cheese brand index, August 2011
                                                                                                                        • Figure 37: Cheese brand index vs. recommendation, August 2011
                                                                                                                      • Target group analysis
                                                                                                                        • Figure 38: Target groups, August 2011
                                                                                                                        • Figure 39: Cheese brand usage, by target groups, August 2011
                                                                                                                      • Group One – Conformists
                                                                                                                        • Group Two – Simply the Best
                                                                                                                          • Group Three – Shelf Stalkers
                                                                                                                            • Group Four – Habitual Shoppers
                                                                                                                              • Group Five – Individualists
                                                                                                                              • Brand Communication and Promotion

                                                                                                                                • Key points
                                                                                                                                  • Cheese advertising drops again after 2010 recovery
                                                                                                                                    • Figure 40: Topline advertising spend for cheese, 2008-11
                                                                                                                                    • Figure 41: Topline advertising spend for cheese, by quarter, 2008-10
                                                                                                                                  • Advertising budgets increasingly focused upon cheddar
                                                                                                                                    • Figure 42: Advertising expenditure on cheese, by product category, 2008-11
                                                                                                                                  • TV dominates advertising budgets with an increasing focus on radio
                                                                                                                                    • Figure 43: Advertising expenditure in the UK, by media type, 2008-11
                                                                                                                                  • Dairy Crest grows spend to become the largest advertiser
                                                                                                                                      • Figure 44: Advertising expenditure, by top ten companies, 2008-11
                                                                                                                                    • Cathedral City and Philadelphia dominate as the top brands by adspend
                                                                                                                                        • Figure 45: Advertising expenditure, by top ten brands, 2008-10
                                                                                                                                    • Channels to Market

                                                                                                                                      • Key point
                                                                                                                                        • Multiple grocers dominate cheese market
                                                                                                                                          • Figure 46: UK retail sales of cheese by outlet type, 2008-10
                                                                                                                                      • Consumer – Trends in Usage

                                                                                                                                        • Key points
                                                                                                                                          • Use in sandwiches remains the dominant eating occasion
                                                                                                                                              • Figure 47: Usage of cheese at home, by occasion, July 2011
                                                                                                                                            • Use of cheese in lunchboxes declines
                                                                                                                                              • Cheese as a multipurpose and flexible product
                                                                                                                                                • Figure 48: Repertoire of usage of cheese, by occasion, July 2011
                                                                                                                                              • Block cheese in decline with packets and spreads growing
                                                                                                                                                  • Figure 49: Trends in frequency of eating block cheese, 2006-11
                                                                                                                                                  • Figure 50: Ten most popularly eaten varieties of cheese in blocks, 2011
                                                                                                                                                  • Figure 51: Trends in frequency of eating packeted cheese, spreads and speciality cheeses, 2007-11
                                                                                                                                                  • Figure 52: Types of packeted cheese, cheese spread and speciality cheese eaten, 2011
                                                                                                                                              • Consumer – Attitudes towards Cheese

                                                                                                                                                • Key points
                                                                                                                                                  • Price remains the overriding consideration
                                                                                                                                                    • Figure 53: Attitudes towards price and promotion in cheese, July 2011
                                                                                                                                                  • Strong interest in newness
                                                                                                                                                    • Figure 54: Attitudes towards new products and brands in cheese, July 2011
                                                                                                                                                  • Provenance is only a theoretical desire for many consumers
                                                                                                                                                    • Figure 55: Attitudes towards provenance in cheese, July 2011
                                                                                                                                                    • Figure 56: Attitudes towards nutrition in cheese, July 2011
                                                                                                                                                • Consumer – Choice Factors

                                                                                                                                                  • Key points
                                                                                                                                                    • Special offers are most common purchase consideration
                                                                                                                                                        • Figure 57: Most important factors looked for when purchasing cheese, July 2011
                                                                                                                                                      • Consumer tastes becoming more mature
                                                                                                                                                        • Convenience seen as an added benefit rather than a purchase driver
                                                                                                                                                          • Consumers reluctant to embrace lower-fat cheeses
                                                                                                                                                            • Interest in provenance on the slide
                                                                                                                                                            • Consumer – Target Groups

                                                                                                                                                              • Key points
                                                                                                                                                                • Four target groups
                                                                                                                                                                  • Figure 58: Target groups, July 2011
                                                                                                                                                                • Loyalists (31%)
                                                                                                                                                                  • Bargain Hunters (27%)
                                                                                                                                                                    • Curious (21%)
                                                                                                                                                                      • Disengaged (21%)
                                                                                                                                                                      • Appendix – Internal Market Environment

                                                                                                                                                                          • Figure 59: Agreement with selected lifestyle statements, 2007-11
                                                                                                                                                                          • Figure 60: Agreement with selected lifestyle statements, by demographics, 2011
                                                                                                                                                                          • Figure 61: Agreement with selected lifestyle statements, by demographics, 2011
                                                                                                                                                                          • Figure 62: Agreement with selected lifestyle statements, by demographics, 2011
                                                                                                                                                                      • Appendix – Market Size and Forecast

                                                                                                                                                                          • Figure 63: Forecast of UK retail sales of cheese, by value, 2006-16
                                                                                                                                                                          • Figure 64: Forecast of UK retail sales of cheese, by value, best and worst case forecast, 2011-16
                                                                                                                                                                          • Figure 65: Forecast of UK retail sales of cheese, by volume, 2006-16
                                                                                                                                                                          • Figure 66: Forecast of UK retail sales of cheese, by volume, best and worst case forecast, 2011-16
                                                                                                                                                                          • Figure 67: UK Retail value and volume sales of cheese, by hardness, 2009 and 2010
                                                                                                                                                                      • Appendix – Brand Research

                                                                                                                                                                          • Figure 68: Brand usage, August 2011
                                                                                                                                                                          • Figure 69: Brand commitment, August 2011
                                                                                                                                                                          • Figure 70: Brand momentum, August 2011
                                                                                                                                                                          • Figure 71: Brand diversity, August 2011
                                                                                                                                                                          • Figure 72: Brand satisfaction, August 2011
                                                                                                                                                                          • Figure 73: Brand recommendation, August 2011
                                                                                                                                                                          • Figure 74: Brand attitude, August 2011
                                                                                                                                                                          • Figure 75: Brand image – macro image, August 2011
                                                                                                                                                                          • Figure 76: Brand image – micro image, August 2011
                                                                                                                                                                          • Figure 77: Profile of target groups, by demographic, August 2011
                                                                                                                                                                          • Figure 78: Psychographic segmentation, by target group, August 2011
                                                                                                                                                                          • Figure 79: Brand usage, by target groups, August 2011
                                                                                                                                                                        • Brand index
                                                                                                                                                                          • Figure 80: Brand index, August 2011
                                                                                                                                                                      • Appendix – Consumer – Trends in Usage

                                                                                                                                                                          • Figure 81: Frequency of using cheese in blocks, 2007-11
                                                                                                                                                                          • Figure 82: Frequency of using cheese in blocks, by demographics, 2011
                                                                                                                                                                          • Figure 83: Varieties of cheese in blocks eaten, 2007-11
                                                                                                                                                                          • Figure 84: Repertoire of varieties of cheese in blocks, 2011
                                                                                                                                                                          • Figure 85: Frequency of using packeted cheese, cheese spread & speciality cheese, 2007-11
                                                                                                                                                                          • Figure 86: Frequency of using Packeted cheese, cheese spread and speciality cheese, by demographics, 2011
                                                                                                                                                                          • Figure 87: Types of packeted cheese, cheese spread & speciality cheese eaten, 2007-11
                                                                                                                                                                      • Appendix – Consumer – Usage of Cheese by Occasion

                                                                                                                                                                          • Figure 88: Usage of cheese at home, July 2011
                                                                                                                                                                          • Figure 89: Usage of cheese at home, by demographics, July 2011
                                                                                                                                                                          • Figure 90: Usage of cheese at home, by demographics, July 2011 (continued)
                                                                                                                                                                          • Figure 91: Repertoire of ways of using cheese at home, July 2011
                                                                                                                                                                          • Figure 92: Repertoire of ways of using of cheese at home, by demographics, July 2011
                                                                                                                                                                      • Appendix – Consumer – Attitudes towards Cheese

                                                                                                                                                                          • Figure 93: Attitudes towards cheese, July 2011
                                                                                                                                                                          • Figure 94: Agreement with the statements ‘I limit how much cheese I eat because it's high in fat’ and ‘Cheese is a good source of nutrients (eg calcium)’, by demographics, July 2011
                                                                                                                                                                          • Figure 95: Agreement with the statements ‘Reduced fat cheese tastes bland’ and ‘Cheese is a good source of calcium for kids’, by demographics, July 2011
                                                                                                                                                                          • Figure 96: Agreement with the statements ‘I usually check the country of origin of cheese I buy’ and ‘I expect supermarket own-label cheddar to be British’, by demographics, July 2011
                                                                                                                                                                          • Figure 97: Agreement with the statements ‘I would like to see more cheese from smaller producers at the supermarket’ and ‘Mature cheese is worth paying more for’, by demographics, July 2011
                                                                                                                                                                          • Figure 98: Further attitudes towards cheese, July 2011
                                                                                                                                                                          • Figure 99: Agreement with the statements ‘I often buy whichever cheese is on offer’ and ‘I stock up on my favourite cheese when it’s on offer’, by demographics, July 2011
                                                                                                                                                                          • Figure 100: Agreement with the statements ‘I tend to stick to my favourite brand/ own-brand because I like the taste’ and ‘I like to try new varieties and types of cheese’, by demographics, July 2011
                                                                                                                                                                          • Figure 101: Agreement with the statements ‘I would like to see more flavour variants in cream cheese (eg with sundried tomato, or with smoked salmon)’ and ‘For the same price, I prefer branded cheese to supermarket own-label’, by demographics, July 2011
                                                                                                                                                                          • Figure 102: Agreement with the statements ‘When I want really high quality cheese, I shop at a specialist store (eg deli, cheesemonger)’ and ‘I am more likely to try a new cheese if it's from a familiar brand’, by demographics, July 2011
                                                                                                                                                                      • Appendix – Consumer – Choice Factors

                                                                                                                                                                          • Figure 103: Choice factors when buying cheese, July 2011
                                                                                                                                                                          • Figure 104: Most popular choice factors when buying cheese, by demographics, July 2011
                                                                                                                                                                          • Figure 105: Next most popular choice factors when buying cheese, by demographics, July 2011
                                                                                                                                                                          • Figure 106: Other popular choice factors when buying cheese, by demographics, July 2011
                                                                                                                                                                      • Appendix – Consumer – Target Groups

                                                                                                                                                                          • Figure 107: Target groups, by demographics, July 2011
                                                                                                                                                                          • Figure 108: Usage of cheese at home, by target groups, July 2011
                                                                                                                                                                          • Figure 109: Attitudes to Cheese, by target groups, July 2011
                                                                                                                                                                          • Figure 110: Further attitudes towards cheese, by target groups, July 2011
                                                                                                                                                                          • Figure 111: Choice factors, by target groups, July 2011
                                                                                                                                                                          • Figure 112: Changes in grocery shopping habits, by target groups, July 2011

                                                                                                                                                                      Companies Covered

                                                                                                                                                                      • Asda Group Ltd
                                                                                                                                                                      • Bank of England
                                                                                                                                                                      • British Broadcasting Corporation (BBC)
                                                                                                                                                                      • Dairy Crest Group plc
                                                                                                                                                                      • Food Standards Agency
                                                                                                                                                                      • J. Sainsbury
                                                                                                                                                                      • Kraft Foods UK
                                                                                                                                                                      • Lactalis McLelland
                                                                                                                                                                      • Lidl (UK)
                                                                                                                                                                      • The Kerrygold Company Ltd
                                                                                                                                                                      • Waitrose
                                                                                                                                                                      • Wm Morrison Supermarkets
                                                                                                                                                                      • Wyke Farms Limited

                                                                                                                                                                      Cheese - UK - October 2011

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