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UK Cheese market report

"The cheese market is expected to see a value decline in 2016, largely due to heavy retail discounting. Continued decline in the dominant cheddar segment has been responsible for the overall fall in cheese volume sales, while bolstered recipe cheese performance suggests consumers' interest in scratch cooking continues. Pressure from consumers and the fallout from Brexit could finally put an end to dwindling average cheese prices."
- Alyson Parkes, Research Analyst

This report examines the following issues:

  • Fair pay for dairy farmers could build value for British cheese
  • Cheese needs new usage occasions as sliced bread sales fall
  • Scope for cheese to capitalise on protein trend

Cheddar's share of the market by value is expected to continue falling, to less than half. Its key usage with bread looks to hamper growth as sliced bread sales struggle, underlining the ongoing need to expand other occasions. Processed and recipe cheese are expected to fare better with projected value and volume sales growth in 2016.

Pressure from consumers and increased global demand for dairy have halted the fall in farmgate milk prices, also starting to put upward pressure on cheese prices. With the Sterling weakening amidst the UK Brexit vote fallout, import prices look set for a sharp rise with export demand also bolstered. Cheese makers may see increased competition for milk resources.

With the PHE (Public Health England) cutting the dairy intake recommendation level in 2016, the protein content of cheese could offer a platform for operators to keep cheese on the menu for health-aware shoppers by tapping into the ongoing interest here. These can also appeal to the younger generation, who are particularly likely to look for protein-rich foods.

This Report examines the UK retail market for cheese. For the purposes of this Report, 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
            • Deflation holds back 2016 value growth
              • Slow growth in cheese sales expected
                • Figure 1: Best- and worst-case forecast of UK retail value sales of cheese, 2012-22
              • Cheddar’s share of market declining
                • Declining bread sales bad news for cheese
                  • Cheese has strong association with snacking
                    • Companies and brands
                      • Own-label making gains in cheese
                        • Cathedral City maintains big lead
                          • Brands in continental cheese growing
                            • Dairylea and Cheestrings see growth
                              • Majority of major manufacturers see fall in cheese sales
                                • Figure 2: Leading companies in the UK cheese market, % by value of retail sales, 2016/17*
                              • Number of different key focuses for NPD
                                • The consumer
                                  • More than nine in 10 people buy cheese
                                    • Figure 3: Types of cheese bought in the last three months, August 2017
                                  • More convenient formats help cheese sales
                                    • Figure 4: Formats of cheese bought in the last three months, August 2017
                                  • Cheese is most commonly eaten with bread, but bread sales declining
                                    • Figure 5: Frequency of eating cheese in different ways, August 2017
                                  • Brands could make more of health associations
                                    • Strong appeal as a snack option but room for more indulgence
                                      • Figure 6: Associations for cheese, August 2017
                                    • A third would like more re-sealable packaging
                                      • Focus on provenance and flavours important
                                        • Figure 7: Interest in product features for cheese, August 2017
                                      • Samplings, ideas and advice good ways to encourage buying
                                        • Figure 8: Attitudes towards buying and eating cheese, August 2017
                                      • What we think
                                      • Issues and Insights

                                        • Mealtimes offer scope for promoting many uses for cheese
                                          • The facts
                                            • The implications
                                              • Focus on indulgence can add value in price-focused market
                                                • The facts
                                                  • The implications
                                                    • Positives of cheese as a snack important for targeting younger people
                                                      • The facts
                                                        • The implications
                                                        • The Market – What You Need to Know

                                                          • Deflation holds back 2016 value growth
                                                            • Uncertainty surrounding Brexit outcome
                                                              • Slow growth in cheese sales expected
                                                                • Cheddar’s share of market declining
                                                                  • Growing continental cheese sales despite fall in the Pound
                                                                    • Declining bread sales bad news for cheese
                                                                      • Consumer snacking important for cheese market
                                                                        • Cooking at home also important for cheese
                                                                          • Catering for eating habits of younger people
                                                                          • Market Size and Forecast

                                                                            • Deflation holds back value growth of cheese market
                                                                              • Figure 9: UK retail value and volume sales of cheese, 2012-22
                                                                            • Slow growth in cheese sales expected
                                                                              • Figure 10: Best- and worst-case forecast of UK retail value sales of cheese, 2012-22
                                                                              • Figure 11: Best- and worst-case forecast of UK retail volume sales of cheese, 2012-22
                                                                            • Forecast methodology
                                                                            • Market Segmentation

                                                                              • Cheddar’s share of market declining
                                                                                • Growing continental cheese sales despite fall in the Pound
                                                                                  • Snack packs help boost other cheese sales
                                                                                    • Figure 12: UK retail sales of cheese, by type, 2015-17
                                                                                  • Extra mature cheddar becoming more popular
                                                                                    • Figure 13: UK retail sales of cheddar, by type, 2015-17
                                                                                • Market Drivers

                                                                                  • Declining bread sales bad news for sales of cheese
                                                                                    • Consumer snacking important for cheese market
                                                                                      • Cooking at home also important for growth of cheese
                                                                                        • Fall in value of Pound means upward piece pressures
                                                                                          • Figure 14: Average retail price for cheddar cheese, Q1 2016-August 2017
                                                                                        • Brexit uncertainty over future trade tariffs
                                                                                          • Catering for the eating habits of younger people
                                                                                            • Figure 15: Trends in age structure of the UK population, 2012-22
                                                                                        • Companies and Brands – What You Need to Know

                                                                                          • Own-label share of cheese market growing
                                                                                            • Cathedral City maintains big lead
                                                                                              • Continental brands, Dairylea and Cheestrings see growth
                                                                                                • Own-label also taking bigger share of new launches
                                                                                                  • More cooking cheeses for grilling or baking
                                                                                                    • More snacking options launched
                                                                                                      • Strong focus on provenance in own-label
                                                                                                        • Increase in 2016 cheese advertising
                                                                                                          • Cathedral City most traditional and delicious brand
                                                                                                            • Philadelphia seen as innovative
                                                                                                            • Market Share

                                                                                                              • Own-label share of cheese market growing
                                                                                                                • Cathedral City maintains big lead
                                                                                                                  • Figure 16: Leading brands in the UK cheese market, by value and volume, 2015/16 and 2016/17
                                                                                                                • Lunchables and Dunkers boost Dairylea
                                                                                                                  • Cheestrings boosted by NPD
                                                                                                                    • Cheddar brands suffering…
                                                                                                                      • …but continental brands increase sales
                                                                                                                        • Majority of major manufacturers see fall in cheese sales
                                                                                                                          • Figure 17: Leading manufacturers in the UK cheese market, by value and volume, 2015/16 and 2016/17
                                                                                                                      • Launch Activity and Innovation

                                                                                                                        • Own-label taking bigger share of new launches
                                                                                                                          • Figure 18: New product launches in the cheese market, by own-label and brands, 2013-17
                                                                                                                        • Major supermarkets dominate new launch activity
                                                                                                                          • Figure 19: New product launches in the cheese market, by top 10 companies (sorted by 2016), 2013-17
                                                                                                                        • More cheeses for grilling or baking
                                                                                                                          • “Posh Cheese on Toast” goes for maximum convenience
                                                                                                                            • More flavours another focus of NPD
                                                                                                                              • More snacking options launched
                                                                                                                                • Snack bars and mini portions
                                                                                                                                  • Combination snack products
                                                                                                                                    • Range development for convenient formats
                                                                                                                                      • Strong focus on provenance in premium own-label
                                                                                                                                        • Regions of different countries
                                                                                                                                          • British regional products
                                                                                                                                            • More free-from products in cheese in 2017
                                                                                                                                              • New launches in goat’s and cow’s cheese
                                                                                                                                              • Advertising and Marketing Activity

                                                                                                                                                • Increase in 2016 cheese advertising
                                                                                                                                                  • Figure 20: Total above-the-line, online display and direct mail advertising expenditure on cheese, 2013-17
                                                                                                                                                • Continental, cheddar and spreadable dominate spending
                                                                                                                                                  • Figure 21: Total above-the-line, online display and direct mail advertising expenditure on cheese, by product type, 2013-17
                                                                                                                                                • Bel UK was the biggest advertiser in 2016
                                                                                                                                                  • Figure 22: Total above-the-line, online display and direct mail advertising expenditure on cheese, by top 10 advertisers (sorted by 2016), 2013-17
                                                                                                                                                  • Figure 23: Total above-the-line, online display and direct mail advertising expenditure on cheese, by top 20 brands (sorted by 2016), 2013-17
                                                                                                                                                • Recent campaign activity
                                                                                                                                                  • Large-scale media campaign for Seriously Cheddar
                                                                                                                                                    • Boursin announces brand’s sponsorship with 9pm film on Film4
                                                                                                                                                      • Philadelphia teams up with the Telegraph and celebrity chef Lorraine Pascale
                                                                                                                                                        • Brands focus on snacking occasions
                                                                                                                                                          • Galbani unveils Mozzarella Grill to be supported by £2.5 million campaign
                                                                                                                                                            • Pilgrims Choice enlists pop icon Sinitta to promote Lighter Mature Cheese range
                                                                                                                                                              • Mini Babybel runs ‘Belboard’ giveaway for Comic Relief
                                                                                                                                                                • New Castella ‘Sensations’ campaign
                                                                                                                                                                  • Nielsen Ad Intel coverage
                                                                                                                                                                  • Brand Research

                                                                                                                                                                      • Brand map
                                                                                                                                                                        • Figure 24: Attitudes towards and usage of selected cheese brands, September 2017
                                                                                                                                                                      • Key brand metrics
                                                                                                                                                                        • Figure 25: Key metrics for selected cheese brands, September 2017
                                                                                                                                                                      • Brand attitudes: Cathedral City the most trusted brand
                                                                                                                                                                        • Figure 26: Attitudes, by brand, September 2017
                                                                                                                                                                      • Brand personality: Cheestrings and The Laughing Cow seen as fun brands
                                                                                                                                                                        • Figure 27: Brand personality – Macro image, September 2017
                                                                                                                                                                      • Boursin has strong association with being indulgent
                                                                                                                                                                        • Figure 28: Brand personality – Micro image, September 2017
                                                                                                                                                                      • Brand analysis
                                                                                                                                                                        • Cathedral City most traditional and delicious brand
                                                                                                                                                                          • Figure 29: User profile of Cathedral City, September 2017
                                                                                                                                                                        • Pilgrims Choice has strong association with high quality
                                                                                                                                                                          • Figure 30: User profile of Pilgrims Choice, September 2017
                                                                                                                                                                        • Boursin the most indulgent and special brand
                                                                                                                                                                          • Figure 31: User profile of Boursin, September 2017
                                                                                                                                                                        • Philadelphia seen as most innovative brand
                                                                                                                                                                          • Figure 32: User profile of Philadelphia, September 2017
                                                                                                                                                                        • The Laughing Cow seen as vibrant and family brand
                                                                                                                                                                          • Figure 33: User profile of The Laughing Cow, September 2017
                                                                                                                                                                        • Cheestrings has strong association with being fun
                                                                                                                                                                          • Figure 34: User profile of Cheestrings, September 2017
                                                                                                                                                                      • The Consumer – What You Need to Know

                                                                                                                                                                        • More than nine in 10 people buy cheese
                                                                                                                                                                          • Even split between branded and own-label purchasing
                                                                                                                                                                            • More convenient formats help cheese sales
                                                                                                                                                                              • Cheese most commonly eaten with bread but bread sales declining
                                                                                                                                                                                • Mealtimes offer many different uses for cheese
                                                                                                                                                                                  • Brands could make more of health associations
                                                                                                                                                                                    • Strong appeal as a snack option but room for more indulgence
                                                                                                                                                                                      • A third would like more re-sealable packaging
                                                                                                                                                                                        • Focus on provenance and flavours important
                                                                                                                                                                                          • Samplings, ideas and advice good ways to encourage buying
                                                                                                                                                                                          • Purchasing of Cheese by Type

                                                                                                                                                                                            • More than nine in 10 people buy cheese
                                                                                                                                                                                              • Figure 35: Types of cheese bought in the last three months, August 2017
                                                                                                                                                                                            • Cream/soft cheese bought more by women
                                                                                                                                                                                              • Continental cheese lags British cheese
                                                                                                                                                                                                • Even split between branded and own-label in cheddar purchasing
                                                                                                                                                                                                  • Figure 36: Branded and own-label cheddar bought in the last three months, August 2017
                                                                                                                                                                                              • Purchasing of Cheese by Format

                                                                                                                                                                                                • More convenient formats give a boost to cheese sales
                                                                                                                                                                                                  • Figure 37: Formats of cheese bought in the last three months, August 2017
                                                                                                                                                                                                • Cheese also targeting more convenient snacking
                                                                                                                                                                                                • Frequency of Eating Cheese in Different Ways

                                                                                                                                                                                                  • Cheese most likely to be eaten with bread but bread declining
                                                                                                                                                                                                    • Figure 38: Frequency of eating cheese in different ways, August 2017
                                                                                                                                                                                                  • Scope for encouraging more frequent eating as part of cheeseboard
                                                                                                                                                                                                    • Mealtimes offer many different uses for cheese
                                                                                                                                                                                                    • Associations for Cheese

                                                                                                                                                                                                      • Positive nutritional associations for cheese…
                                                                                                                                                                                                        • …but brands could be missing an opportunity to drive home these associations
                                                                                                                                                                                                          • Figure 39: Associations for cheese, August 2017
                                                                                                                                                                                                        • Protein content could be the key to attracting younger buyers
                                                                                                                                                                                                          • Being high in saturated fat the biggest negative
                                                                                                                                                                                                            • Does “indulgent” clash with “healthy”?
                                                                                                                                                                                                              • Concerns over cholesterol content among over-45s
                                                                                                                                                                                                                • Cheese has strong appeal as a snack option
                                                                                                                                                                                                                  • Room for making cheese more of an indulgent treat
                                                                                                                                                                                                                      • Figure 40: What people would give up if they had to give up chocolate or cheese, August 2017
                                                                                                                                                                                                                  • Interest in Product Features

                                                                                                                                                                                                                    • A third would like to see more re-sealable packaging
                                                                                                                                                                                                                      • Figure 41: Interest in product features for cheese, August 2017
                                                                                                                                                                                                                    • Room for retailers to encourage trading up to smaller brands
                                                                                                                                                                                                                      • Room for more cheese with added flavours or ingredients
                                                                                                                                                                                                                      • Attitudes towards Buying and Eating Cheese

                                                                                                                                                                                                                        • Samplings, ideas and advice good ways to encourage buying
                                                                                                                                                                                                                          • Figure 42: Attitudes towards buying and eating cheese, August 2017
                                                                                                                                                                                                                        • Core group of cheese connoisseurs to target
                                                                                                                                                                                                                          • Convenience and quality issues in sliced/grated cheese
                                                                                                                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

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

                                                                                                                                                                                                                                  • Forecast methodology
                                                                                                                                                                                                                                      • Figure 43: Best- and worst-case forecast of total UK retail value sales of cheese, 2017-22
                                                                                                                                                                                                                                      • Figure 44: Best- and worst-case forecast of total UK retail volume sales of cheese, 2017-22
                                                                                                                                                                                                                                  • Appendix – Launch Activity and Innovation

                                                                                                                                                                                                                                      • Figure 45: New product launches in the cheese market, by top 10 claims (sorted by 2016), 2013-17
                                                                                                                                                                                                                                      • Figure 46: New product launches in the cheese market, by format type, 2013-17