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Cheese - UK - October 2015

“On the whole, the cheese category is expected to see only slight volume growth in 2015, largely due to the largest segment, cheddar’s, lacklustre performance. In contrast, strong volume performance from recipe and territorial cheeses suggests consumers may be seeking greater variety in their cheese purchases.”

-  Richard Ford, Senior Food and Drink Analyst

This report looks at the following areas:

  • Cheddar sales are in value decline
  • Greater scope for brands to capitalise on the use of cheese in cooking
  • Under-35s are less likely to buy cheddar

The UK retail cheese market is expected to see a lacklustre sales performance in 2015, with flat value sales and marginal volume growth as falling raw material prices for dairy in the UK filter through to retail.

Cheddar, which accounts for almost half of the market by value sales, is set to register a value sales decline and only marginal volume growth. Other cheeses are faring better, with recipe and territorial cheeses in particular registering volume growth of more than 5%.

Increasing real wages offer opportunities for trading consumers up to more premium cheeses but operators can’t be complacent, and must also seek to boost volume sales by encouraging greater use of cheese in cooking and increased purchase by the young.

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

 

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this report
      • Executive Summary

          • The market
            • Cheese volumes expected to grow 1% in 2015
              • Cheese prices forecast to rise more slowly in 2015-20
                • Figure 1: Retail value sales of the UK cheese market, 2010-20
              • Cheddar’s value share of the cheese market is expected to shrink
                • Recipe cheese generates the fastest volume growth
                  • Territorial cheeses gain greater visibility
                    • UK wholesale price of mild cheddar falls 25% in a year
                      • Rising real incomes may fuel value sales of cheese
                        • Accelerating growth of the over-55s age group should benefit cheese
                          • Companies and brands
                            • Sales of own-label cheese buck the downward trend
                              • Cathedral City is the only top five brand to post marked volume growth
                                • Anchor becomes a £30 million cheese brand in just over two years
                                  • 13% of new launches in 2014 had a seasonal positioning
                                    • Cheesemakers and retailers tap into burger mania
                                      • The consumer
                                        • Cheese is bought by nine in 10 consumers
                                          • Cheddar is purchased by four fifths of Brits
                                            • Figure 2: Purchase of cheese, by type, 2012-15
                                          • Discounters are a substantial threat to brands’ cheese sales
                                            • Figure 3: Channels used to buy cheese, July 2015
                                          • One in six cheese buyers are buying less block cheese
                                            • Figure 4: Cheese buying behaviours, July 2015
                                          • Cheddar is seen as good for special occasions by only a minority
                                            • Half of consumers interested in recipes using cheese in unusual ways
                                              • Figure 5: Attitudes towards cheese, July 2015
                                            • Strong interest in healthy cheese snacks
                                              • Figure 6: Consumer preferences for cheese snacks, July 2015
                                            • What we think
                                            • Issues and Insights

                                              • Cheddar sales are in value decline
                                                • The facts
                                                  • The implications
                                                    • Greater scope for brands to capitalise on the use of cheese in cooking
                                                      • The facts
                                                        • The implications
                                                          • Under-35s are less likely to buy cheddar
                                                            • The facts
                                                              • The implications
                                                              • The Market – What You Need to Know

                                                                • Cheese volumes expected to rise ahead of value in 2015
                                                                  • Cheddar’s share of cheese is expected to shrink
                                                                    • Recipe cheese generates the fastest volume growth
                                                                      • Territorial cheeses gain greater visibility
                                                                        • Cheese prices forecast to rise more slowly in 2015-20
                                                                          • UK wholesale price of mild cheddar falls 25% in a year
                                                                            • Accelerating growth of the over-55s age group should benefit cheese
                                                                            • Market Size and Forecast

                                                                              • Increase in cheese volumes and marginal rise in value expected in 2015
                                                                                • Slower value growth but faster volume growth expected in 2015-20
                                                                                  • Figure 7: Retail value and volume sales of the UK cheese market, 2010-20
                                                                                  • Figure 8: Retail value sales of the UK cheese market, 2010-20
                                                                                  • Figure 9: Retail volume sales of the UK cheese market, 2010-20
                                                                              • Segment Performance

                                                                                • Cheddar’s share of cheese is expected to shrink
                                                                                  • Recipe cheese generates the fastest volume growth
                                                                                    • Territorial cheeses gain greater visibility
                                                                                      • Figure 10: UK retail sales of cheese, by type, 2013-15
                                                                                    • Full-flavoured and farmhouse cheddars struggle
                                                                                      • Figure 11: UK retail sales of cheddar, by type, 2013-15
                                                                                  • Market Drivers

                                                                                    • UK wholesale price of mild cheddar falls 25% in a year
                                                                                      • Figure 12: UK wholesale prices of mild cheddar, January 2010-September 2015
                                                                                      • Figure 13: Consumer Price Index of cheese, January 2010-August 2015
                                                                                    • Smaller cheddar brands struggle to compete
                                                                                      • Rising real incomes may fuel value sales of cheese
                                                                                        • Accelerating growth of the over-55s age group should benefit cheese
                                                                                          • Changing bread eating habits could hamper purchases of cheese
                                                                                          • Key Players – What You Need to Know

                                                                                            • Own-label cheese sales buck the downward trend
                                                                                              • Cathedral City is the only top five brand to post marked volume growth
                                                                                                • Anchor becomes a £30 million cheese brand in just over two years
                                                                                                  • 13% of new launches in 2014 had a seasonal positioning
                                                                                                    • Cheesemakers and retailers tap into burger mania
                                                                                                      • Slight increase in 2014 adspend
                                                                                                      • Market Share

                                                                                                        • Own-label bucks the downward trend
                                                                                                          • Cathedral City is the only top five brand to post marked volume growth
                                                                                                            • Lidl campaign highlights price difference between Cathedral City and Lidl private-label cheddar
                                                                                                              • Anchor becomes a £30 million cheese brand in just over two years
                                                                                                                • A new cheddar brand enters the fray
                                                                                                                  • Seriously Strong aligns its portfolio more closely with rivals
                                                                                                                    • Dairylea sales decline as price hikes bite
                                                                                                                      • Figure 14: Leading brands in the UK cheese market, by value and volume, 2012/13-2014/15
                                                                                                                      • Figure 15: Leading manufacturers in the UK cheese market, by value and volume, 2012/13-2014/15
                                                                                                                  • Launch Activity and Innovation

                                                                                                                    • Brands gain highest share of new launches in four years
                                                                                                                      • Figure 16: New product launches in the cheese market, by private label and brands, 2011-15
                                                                                                                    • Retailers make up four in five top companies by cheese launches in 2014
                                                                                                                      • Figure 17: New product launches in the UK cheese market, by top 10 companies, 2011-15
                                                                                                                    • 13% of new launches in 2014 had a seasonal positioning
                                                                                                                      • Bel offers a point of difference through seasonal packaging
                                                                                                                        • Primula drives increase in charity claims in 2014
                                                                                                                          • Figure 18: New product launches in the UK cheese market, by top 10 claims, 2011-15
                                                                                                                        • Operators target kids with cheese shapes
                                                                                                                          • Cheesemakers and retailers tap into burger mania
                                                                                                                            • 2015 sees a flurry of whipped cream cheese launches
                                                                                                                              • Could cheese curds go mainstream in the UK market?
                                                                                                                              • Brand Communication and Promotion

                                                                                                                                • Slight increase in 2014 adspend
                                                                                                                                  • Figure 19: Recorded above-the-line, online display and direct mail total advertising expenditure on cheese, 2011-15
                                                                                                                                • Cheddar sees 50% increase in adspend as Anchor enters the fray
                                                                                                                                  • Cheddar’s adspend-to-sales ratio is low
                                                                                                                                    • Figure 20: Recorded above-the-line, online display and direct mail total advertising expenditure on cheese, by product type, 2011-15
                                                                                                                                  • Cathedral City links up with McCain for jacket potato cross-promo
                                                                                                                                    • Wyke Farms and Seriously Strong campaigns play on their provenance
                                                                                                                                      • Mondelēz spends big on pushing the taste credentials of Philadelphia
                                                                                                                                        • Cheestrings launches on-pack Star Wars promotion
                                                                                                                                          • British Cheeseboard launches kids’ lunchbox generic campaign
                                                                                                                                            • Figure 21: Recorded above-the-line, online display and direct mail total advertising expenditure on cheese, by top five advertisers, 2011-15
                                                                                                                                            • Figure 22: Recorded above-the-line, online display and direct mail total advertising expenditure on cheese, by top five brands, 2011-15
                                                                                                                                        • Brand Research

                                                                                                                                            • What you need to know
                                                                                                                                              • Brand map
                                                                                                                                                • Figure 23: Attitudes towards and usage of selected cheese brands, August 2015
                                                                                                                                              • Key brand metrics
                                                                                                                                                • Figure 24: Key metrics for selected cheese brands, August 2015
                                                                                                                                              • Brand attitudes: Cathedral City and Philadelphia seen most widely as having a good reputation
                                                                                                                                                • Figure 25: Attitudes, by cheese brand, August 2015
                                                                                                                                              • Brand personality: Pilgrims Choice falls down on engagement and vibrancy
                                                                                                                                                • Figure 26: Brand personality – Macro image, August 2015
                                                                                                                                              • Dairylea and The Laughing Cow are strong on family but weak on indulgence
                                                                                                                                                • Figure 27: Brand personality – Micro image, August 2015
                                                                                                                                              • Brand analysis
                                                                                                                                                • Cathedral City
                                                                                                                                                    • Figure 28: User profile of Cathedral City, August 2015
                                                                                                                                                  • Seriously Strong
                                                                                                                                                      • Figure 29: User profile of Seriously Strong, August 2015
                                                                                                                                                    • Philadelphia
                                                                                                                                                        • Figure 30: User profile of Philadelphia, August 2015
                                                                                                                                                      • Pilgrims Choice
                                                                                                                                                          • Figure 31: User profile of Pilgrims Choice, August 2015
                                                                                                                                                        • The Laughing Cow
                                                                                                                                                            • Figure 32: User profile of The Laughing Cow, August 2015
                                                                                                                                                          • Dairylea
                                                                                                                                                              • Figure 33: User profile of Dairylea, August 2015
                                                                                                                                                          • The Consumer – What You Need to Know

                                                                                                                                                            • Cheese is bought by nine in 10 consumers
                                                                                                                                                              • Cheddar purchased by four fifths of Brits
                                                                                                                                                                • Discounters are a substantial threat to brands’ cheese sales
                                                                                                                                                                  • Changes in cheese formats purchased
                                                                                                                                                                    • Half of consumers interested in recipes using cheese in unusual ways
                                                                                                                                                                      • Cheddar is seen as good for special occasions by only a minority
                                                                                                                                                                        • Strong interest in healthy cheese snacks
                                                                                                                                                                        • Cheese Purchase Habits

                                                                                                                                                                          • Cheese is bought by nine in 10 consumers
                                                                                                                                                                            • Cheddar purchased by four fifths of Brits
                                                                                                                                                                                • Figure 34: Purchase of cheese, by type, 2012-15
                                                                                                                                                                              • Supermarkets are top channel for buying cheddar and continental cheeses
                                                                                                                                                                                • Discounters are a substantial threat to brands’ cheese sales
                                                                                                                                                                                    • Figure 35: Channels used to buy cheese, July 2015
                                                                                                                                                                                • Cheese Buying Behaviours

                                                                                                                                                                                  • Offers sway two in five cheese buyers
                                                                                                                                                                                    • One in six are buying more lighter cheeses than a year ago
                                                                                                                                                                                      • One in six cheese buyers are buying less block cheese
                                                                                                                                                                                        • Figure 36: Cheese buying behaviours, July 2015
                                                                                                                                                                                    • Attitudes towards Cheese

                                                                                                                                                                                      • Cheddar is widely seen as suited for cooking
                                                                                                                                                                                        • Half of consumers interested in recipes using cheese in unusual ways
                                                                                                                                                                                          • One in four interested in cheese-flavoured mayonnaise
                                                                                                                                                                                            • Premium flavoured block cheddars
                                                                                                                                                                                              • Figure 37: Attitudes towards cheese, July 2015
                                                                                                                                                                                          • Qualities Associated with Cheese

                                                                                                                                                                                            • Few see any cheese type as boring
                                                                                                                                                                                              • Cheddar is seen as good for special occasions by only a minority
                                                                                                                                                                                                • Few see cream cheese as good for special occasions
                                                                                                                                                                                                  • Cream cheese could provide a positive halo effect for spreadable cheese
                                                                                                                                                                                                    • Cheeses other than cheddar are losing out when it comes to cooking
                                                                                                                                                                                                      • Figure 38: Qualities associated with selected cheese types, July 2015
                                                                                                                                                                                                  • Consumer Preferences for Cheese Snacks

                                                                                                                                                                                                    • Brands continue to innovate in snacking products
                                                                                                                                                                                                      • Strong interest in healthy cheese snacks
                                                                                                                                                                                                        • A gap in the market for flavoured cheese snacks
                                                                                                                                                                                                          • Cheddar is king
                                                                                                                                                                                                            • International markets provide inspiration for cheese snack packaging
                                                                                                                                                                                                              • The cost of cheese snack packs could be prohibitive to many
                                                                                                                                                                                                                  • Figure 39: Consumer preferences for cheese snacks, July 2015
                                                                                                                                                                                                              • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                                  • Abbreviations
                                                                                                                                                                                                                    • Consumer research methodology
                                                                                                                                                                                                                    • Appendix – Market Size and Forecast

                                                                                                                                                                                                                      • Forecast methodology
                                                                                                                                                                                                                          • Figure 40: Best- and worst-case forecasts for the UK cheese market, by value
                                                                                                                                                                                                                          • Figure 41: Best- and worst-case forecasts for the UK cheese market, by volume
                                                                                                                                                                                                                      • Appendix – Market Drivers

                                                                                                                                                                                                                          • Figure 42: Trends in the age structure of the UK population, 2010-20
                                                                                                                                                                                                                          • Figure 43: Trends in the age structure of the UK population, 2010-15 and 2015-20

                                                                                                                                                                                                                      Companies Covered

                                                                                                                                                                                                                      To learn more about the companies covered in this report please contact us.

                                                                                                                                                                                                                      Cheese - UK - October 2015

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