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Cheese - UK - October 2014

“The ending of milk quotas post-2015 should bring challenges and opportunities for the market, particularly for British brands. Meanwhile, openness to new formats and trading consumers into territorials should help build category value.”
– Richard Ford, Senior Food and Drink Analyst

This report looks at the following areas:

  • Leading brands look to grow usage of territorial cheese through snacking
  • Marked openness to new formats of cheese
  • Ending of EU milk quotas in 2015 does not bode well for British cheddar makers

Purchased by 95% of consumers, cheese remains a staple item in the nation’s shopping basket. The retail cheese market is expected to see value growth accelerate in 2014, taking sales to over £2 billion. Volume is anticipated to continue to decline, falling faster than in 2013. While rising prices have propped up value growth, they have dampened volumes.

The nation’s preference for cheddar continues, although the segment’s market share is expected to fall in 2014, whilst the processed and recipe cheese segments grow.

Whilst advertising spend fell by a third in 2013, key operators continue to innovate, with Cathedral City launching into spreadable cheddar (January 2014) and Mondel?z launching a new format of cheese, Duo Cremoso (summer 2014). Recent price rises have, however, benefited own-label cheese, with brands losing share in the market in 2013/14.

This report examines the UK retail market for cheese. Mintel’s definition includes products sold through the grocery retail channel and direct to consumers including:

  • Fresh cheese and cream cheese
  • Hard cheese and semi-hard cheese
  • Processed cheese
  • Soft cheese and semi-soft cheese

The market size includes sales of cottage cheese, however, this is excluded from all other parts of the report, as it falls under the curd and quark category. Sales via catering or foodservice establishments are excluded, although references and comparisons to these sectors may be made where relevant.

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: UK retail value sales of cheese, by type, 2012-14
            • Forecast
              • Figure 2: Retail value sales of the UK cheese market*, 2009-19
            • Market factors
              • Phasing out of EU milk quotas is expected to see a rise in imports
                • One in five interested in lower-salt cheese
                  • Differing trends in mild and mature wholesale prices
                    • Companies, brands and innovation
                      • Own-label accounts for over half of the UK retail cheese market
                        • Figure 3: Leading manufacturers’ shares in the UK cheese market, by value, 2013/14*
                      • Brands gain share of new launches in 2013
                        • Total adspend falls by a third
                          • The consumer
                            • Cheese enjoys almost universal purchase
                              • Figure 4: Purchase of cheese, by type, July 2012 and July 2014
                            • Usage of cheese on toast falls since 2012
                              • Figure 5: Usage of cheese, by occasion, July 2012 and July 2014
                            • Two thirds would switch, buy less or stop buying if the price of their favourite cheddar rose
                              • Figure 6: Consumer reactions to a 10% rise in the price of their favourite branded cheddar, July 2014
                            • Just one in five cheese users think non-processed cheese is made from all-natural ingredients
                              • Figure 7: Attitudes towards cheese, July 2014
                            • Coated, marinated and non-European cheeses all spark consumers’ interest
                              • Figure 8: Interest in cheese product concepts, July 2014
                            • What we think
                            • Issues and Insights

                                • Leading brands look to grow usage of territorial cheese through snacking
                                  • The facts
                                    • The implications
                                      • Marked openness to new formats of cheese
                                        • The facts
                                          • The implications
                                            • Ending of EU milk quotas in 2015 does not bode well for British cheddar makers
                                              • The facts
                                                • The implications
                                                • Trend Application

                                                    • Trend: Extend My Brand
                                                      • Trend: Fauxthenticity
                                                        • Trend: Sense of the Intense
                                                        • Market Drivers

                                                          • Key points
                                                            • Abolition of EU milk quotas set to bring opportunities and threats
                                                              • Mild cheddar wholesale prices down 13% year on year
                                                                • Figure 9: UK wholesale prices of mature and mild cheddar January 2012-August 2014
                                                              • Cheese criticised for being high in salt
                                                                • Changes to school lunches represent a threat to kids’ cheese brands’ sales
                                                                  • Slower growth in 15-34s and 0-4s may affect usage of cheese
                                                                  • Strengths and Weaknesses

                                                                    • Strengths
                                                                      • Weaknesses
                                                                      • Who’s Innovating?

                                                                        • Key points
                                                                          • Brands and own-label hold equal share of new launches in 2013
                                                                            • Figure 10: New product launches in the UK cheese market, by private label and brands, 2010-14
                                                                          • Sliced cheese sees ‘better value’ and ‘value-added’ launches
                                                                            • Aldi sees fastest growth in new launches in 2013
                                                                              • Figure 11: New product launches in the UK cheese market, by top 10 companies, 2010-14
                                                                            • The mature segment garners interest across the board
                                                                              • Figure 12: New product launches in the UK cheese market, by top 10 flavour components, 2010-14
                                                                            • Brands turn to blue cheese to add a point of difference
                                                                              • ‘Premium’ cheeses account for one in 10 new launches in 2013
                                                                                • Figure 13: New product launches in the UK cheese market, by top 12 claims in 2013, 2009-14
                                                                            • Market Size and Forecast

                                                                              • Key points
                                                                                • 2014 sees volume sales decline and value growth accelerate
                                                                                  • Figure 14: Retail value and volume sales of the UK cheese market, 2009-19
                                                                                • Forecast
                                                                                  • Figure 15: Retail value sales of the UK cheese market, 2009-19
                                                                                  • Figure 16: Retail volume sales of the UK cheese market, 2009-19
                                                                                • Forecast methodology
                                                                                • Segment Performance

                                                                                  • Key points
                                                                                    • Despite losing market share, cheddar clings on to 50% of the market
                                                                                      • Figure 17: UK retail value and volume sales of cheese, by type, 2012-14
                                                                                    • Mild is the only cheddar type to see volume growth in 2014
                                                                                      • Figure 18: UK retail value and volume sales of cheddar, by type, 2012-14
                                                                                  • Market Share

                                                                                    • Key points
                                                                                      • Own-label outperforms the market in sales growth in 2013/14
                                                                                        • Figure 19: Leading manufacturers’ shares in the UK cheese market, by value, 2013/14*
                                                                                      • Cathedral City smashes through the £300 million mark
                                                                                        • Figure 20: Leading brands in the UK cheese market, by value and volume, 2011/12-2013/14
                                                                                      • Other major cheddar brands struggle
                                                                                        • Philadelphia suffers sales drop ahead of revamp
                                                                                        • Companies and Products

                                                                                            • Adams Foods
                                                                                              • Background
                                                                                                • Product range and innovation
                                                                                                  • Recent activity and promotion
                                                                                                    • Bel UK
                                                                                                      • Background
                                                                                                        • Product range and innovation
                                                                                                          • Recent activity and promotion
                                                                                                            • Dairy Crest Group
                                                                                                              • Background
                                                                                                                • Product range and innovation
                                                                                                                  • Recent activity
                                                                                                                    • Mondelēz UK
                                                                                                                      • Background
                                                                                                                        • Product range and innovation
                                                                                                                          • Recent activity and promotion
                                                                                                                            • Lactalis McLelland
                                                                                                                              • Background
                                                                                                                                • Product range and innovation
                                                                                                                                  • Recent activity and promotion
                                                                                                                                    • Wyke Farms
                                                                                                                                      • Background
                                                                                                                                        • Product range and innovation
                                                                                                                                          • Recent activity and promotion
                                                                                                                                          • Brand Advertising, Perceptions and Social Media

                                                                                                                                            • Key points
                                                                                                                                              • Brand Advertising
                                                                                                                                                • Total adspend falls by a third in 2013
                                                                                                                                                  • Figure 21: Total advertising spend in the UK cheese market, 2010-14
                                                                                                                                                • Bel UK overtakes Mondelēz to become biggest advertiser in 2013
                                                                                                                                                  • Figure 22: Advertising expenditure in the UK cheese market, by top five advertisers, 2010-14
                                                                                                                                                • Less spend on other kids’ brands and mature cheddar
                                                                                                                                                    • Figure 23: Advertising expenditure in the UK cheese market, by top five brands, 2010-14
                                                                                                                                                    • Figure 24: Advertising expenditure in the UK cheese market, by top five media types, 2010-14
                                                                                                                                                  • Continental enjoys highest ad support
                                                                                                                                                    • Figure 25: Advertising expenditure in the UK cheese market, by product type, 2010-14
                                                                                                                                                  • Brand perceptions
                                                                                                                                                    • Key brand metrics
                                                                                                                                                      • Figure 26: Key brand metrics, August 2014
                                                                                                                                                    • Brand map
                                                                                                                                                        • Figure 27: Attitudes towards and usage of brands in the cheese sector, August 2014
                                                                                                                                                      • Correspondence analysis
                                                                                                                                                        • Brand attitudes
                                                                                                                                                          • Figure 28: Attitudes, by cheese brand, August 2014
                                                                                                                                                        • Brand personality
                                                                                                                                                          • Figure 29: Cheese brand personality – macro image, August 2014
                                                                                                                                                          • Figure 30: Cheese brand personality – micro image, August 2014
                                                                                                                                                        • Brand usage
                                                                                                                                                          • Figure 31: Cheese brand usage, August 2014
                                                                                                                                                        • Brand experience
                                                                                                                                                          • Figure 32: Cheese brand experience, August 2014
                                                                                                                                                        • Social Media and Online Buzz
                                                                                                                                                          • Social Media Metrics
                                                                                                                                                            • Figure 33: Social media metrics of selected cheese brands, September 2014
                                                                                                                                                          • Online mentions
                                                                                                                                                            • Figure 34: Brand share of conversation around cheese brands, 1 September 2013-30 August 2014
                                                                                                                                                          • Topics of discussion
                                                                                                                                                            • Figure 35: Topics of discussion around selected cheese brands, 1 September 2013-30 August 2014
                                                                                                                                                          • Where discussion occurs
                                                                                                                                                            • Figure 36: Online conversation of cheese brands, by page type, 1 September 2013-30 August 2014
                                                                                                                                                          • Analysis by brand
                                                                                                                                                            • Figure 37: Topic cloud around mentions of Wyke Farms, 1 September 2013-30 August 2014
                                                                                                                                                            • Figure 38: Topic cloud around mentions of Philadelphia, 1 September 2013-30 August 2014
                                                                                                                                                            • Figure 39: Topic cloud around mentions of Dairylea, 1 September 2013-30 August 2014
                                                                                                                                                            • Figure 40: Topic cloud around mentions of Babybel, 1 September 2013-30 August 2014
                                                                                                                                                            • Figure 41: Topic cloud around mentions of Cathedral City, 1 September 2013-30 August 2014
                                                                                                                                                            • Figure 42: Topic cloud around mentions of Anchor Cheddar, 1 September 2013-30 August 2014
                                                                                                                                                        • The Consumer – Purchase Habits

                                                                                                                                                          • Key points
                                                                                                                                                            • Cheese purchasing is near-universal
                                                                                                                                                                • Figure 43: Purchase of cheese, by type, July 2012 and July 2014
                                                                                                                                                              • Spreadable gets big brand support in 2013/14
                                                                                                                                                                • Over-55s less likely to buy processed, spreadable or snacking cheese
                                                                                                                                                                  • Figure 44: Purchase of processed, Spreadable and Mini portions/Snack pack cheese, by age, July 2014
                                                                                                                                                                • Younger consumers less likely to buy regional cheeses
                                                                                                                                                                  • Two thirds would switch, buy less or stop if the price of their favourite cheddar rose
                                                                                                                                                                      • Figure 45: Consumer reactions to a 10% rise in the price of their favourite branded cheddar, July 2014
                                                                                                                                                                    • The market suffers from low brand loyalty
                                                                                                                                                                      • Own-brand benefits from switching
                                                                                                                                                                      • The Consumer – Cheese Usage by Occasion

                                                                                                                                                                        • Key points
                                                                                                                                                                          • Sandwiches remain the preferred way to eat cheese
                                                                                                                                                                              • Figure 46: Usage of cheese, by occasion, July 2012 and July 2014
                                                                                                                                                                            • Usage of cheese on toast falls between 2012 and 2014
                                                                                                                                                                              • Scope to grow cheese as a dessert ingredient amongst over-55s
                                                                                                                                                                                • Cheese brands look to boost use in cooking
                                                                                                                                                                                • The Consumer – Attitudes towards Cheese

                                                                                                                                                                                  • Key points
                                                                                                                                                                                    • No preference between British and Irish cheddar say half of cheese users
                                                                                                                                                                                        • Figure 47: Attitudes towards cheese, July 2014
                                                                                                                                                                                      • Few see non-processed cheese as having all-natural ingredients
                                                                                                                                                                                        • Scope for cheddar brands to extend further into savoury snacking
                                                                                                                                                                                          • One in five interested in lower-salt version of their favourite cheese
                                                                                                                                                                                            • Cheese is seen as a good source of protein by 45% of eaters/buyers
                                                                                                                                                                                            • The Consumer – Interest in Cheese Product Concepts

                                                                                                                                                                                              • Key points
                                                                                                                                                                                                • Two in five interested in coated cheeses
                                                                                                                                                                                                    • Figure 48: Interest in cheese product concepts, July 2014
                                                                                                                                                                                                  • Cheeses from non-European countries would add interest to the fixture
                                                                                                                                                                                                    • Marinated cheese appeals to more than one in four
                                                                                                                                                                                                      • Scope for cheddar brands to extend into bread products
                                                                                                                                                                                                      • Appendix – Market Drivers

                                                                                                                                                                                                          • Figure 49: Trends in the age structure of the UK population, 2009-19
                                                                                                                                                                                                      • Appendix – Who’s Innovating?

                                                                                                                                                                                                          • Figure 50: New product development in the UK cheese market, by product format, 2010-14
                                                                                                                                                                                                      • Appendix – Market Size and Forecast

                                                                                                                                                                                                          • Figure 51: Best- and worst-case forecasts for the UK cheese market, by value, 2014-19
                                                                                                                                                                                                          • Figure 52: Best- and worst-case forecasts for the UK cheese market, by value, 2014-19

                                                                                                                                                                                                      Companies Covered

                                                                                                                                                                                                      • Adam's Foods
                                                                                                                                                                                                      • Asda Group Ltd
                                                                                                                                                                                                      • Bel UK
                                                                                                                                                                                                      • British Bakeries Ltd
                                                                                                                                                                                                      • Channel 4
                                                                                                                                                                                                      • Comic Relief UK
                                                                                                                                                                                                      • Dairy Crest Group plc
                                                                                                                                                                                                      • Diageo UK
                                                                                                                                                                                                      • Facebook, Inc.
                                                                                                                                                                                                      • Fonterra Co-operative Group Ltd
                                                                                                                                                                                                      • Greencore Grocery
                                                                                                                                                                                                      • Groupe Lactalis
                                                                                                                                                                                                      • ITV plc
                                                                                                                                                                                                      • J. Sainsbury
                                                                                                                                                                                                      • JP Chenet
                                                                                                                                                                                                      • Kraft Foods Inc.
                                                                                                                                                                                                      • Kraft Foods UK
                                                                                                                                                                                                      • Lactalis McLelland
                                                                                                                                                                                                      • Nectar
                                                                                                                                                                                                      • Tesco (UK)
                                                                                                                                                                                                      • The Kerrygold Company Ltd
                                                                                                                                                                                                      • Waitrose
                                                                                                                                                                                                      • Wyke Farms Limited
                                                                                                                                                                                                      • YouTube, Inc.

                                                                                                                                                                                                      Cheese - UK - October 2014

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