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The Specialty Cheese Market in the United States. presented by Paul Savello, Ph.D. Ministerio de Ganader í a, Agricultura y Pesca. ¡ Gracias a los expertos en l ácteos visitantes por su tiempo e inter és en ayudar el sector l ácteo del Uruguay!. Summary.

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Presentation Transcript
slide1

The Specialty Cheese Market

in the United States

presented by

Paul Savello, Ph.D.

Ministerio de Ganadería, Agricultura y Pesca

slide2
¡Gracias a los expertos en lácteos visitantespor su tiempo e interés en ayudarel sector lácteo del Uruguay!
slide3

Summary

  • Cheese consumption in U.S. increased during past 30 years
  • Specialty cheese market helping to drive the per capita consumption
  • Specialty cheese retail sales – U$S 2.4 billion in 2000 with growth to U$S 2.9 billion in 2005
  • Four P’s (Product, Promotion, Place, Price) of marketing used to describe the specialty cheese market
  • Need to uncover a niche product
slide4

Summary

  • Most rapidly growing niche market is ethnic cheese market
  • Hispanic style cheese is fastest growing sector
  • “Farmstead”/”artisan” cheese market rapidly growing in specific geographic areas
  • Opportunities exist for international manufacturers of specialty cheeses in the U.S. market
slide8

Cheese Consumption Increase

  • Consumer desire for new cheese varieties in convenient forms and packages
  • Consumers willing to try new varieties of cheese
  • Consumer willing to pay premium for the new varieties
  • Dairy Management Inc. (Rosemont, Illinois): 74% of consumers “love the taste of cheese” and 78% want to try “new and different varieties”
slide9

Cheese Consumption Increase

  • Health conscious consumer – calcium and protein in cheese
  • New cheese varieties (imported or manufactured by artisan cheesemakers) turn non-cheese consumers into users or occasional cheese users
  • Farmstead/artisan cheeses represent small portion of total cheese market, but these cheeses show significant opportunity for market growth
slide10

Cheese Consumption Increase

  • Jim Path (University of Wisconsin Center for Dairy Research) defines “specialty cheese” as
  • “cheese that is low in production volume –
  • less than 40 million pounds annually…labor
  • intensive…perception of value added product…
  • may have ethnic background…special
  • manufacturing process or packaging”
slide11

Specialty Cheese – Market Overview

  • Nature of specialty cheese derived from one or more unique qualities:
    • Exotic origin
    • Particular processing
    • Design
    • Limited supply
    • Unusual application or use
    • Extraordinary packaging or channel of sale
slide12

Specialty Cheese – Market Overview

  • Why is specialty cheese market increasing?
      • Subtle variations in textures, flavors
      • Ethnic heritages
      • Perfect match for today’s adventurous and flavor-seeking consumer
      • Quality and variety of specialty cheeses advances due to:
      • innovation, research, global migrations of cheesemakers, craftsmanship programs
slide13

Specialty Cheese – Market Overview

  • Artisan cheeses have great reception in market
  • Goat cheese one of the most popular specialty cheeses
  • Retailers can carry as many as 50 varieties of goat cheese
slide14

Specialty Cheeses – Retail Growth

  • Fastest growing at retail – Asiago cheese
  • Next – Gorgonzola, Provolone, Muenster, Colby Jack, Brie, Goat, Blue, Havarti, Swiss
  • Ten years ago, consumers not even aware of cheeses such as Asiago, Gorgonzola, or Havarti
slide16

Specialty Cheeses – Retail Growth

  • Specialty cheeses sold in “deli” departments of supermarkets
  • Commodity cheeses sold in pre-packaged, set weight varieties in the dairy case
  • Research of Fromartharie (New Jersey):
    • “most shoppers purchase commodity cheese for cooking and baking, while they shop the deli case for entertaining”
slide17

Specialty Cheeses – Retail Growth

  • Packaged Facts report “U.S. Gourmet Specialty Foods Market:”
    • Supermarkets – 55% of specialty cheese sales
    • Specialty cheese stores – 30% of sales
    • Health/natural food stores – 5% of sales
    • Warehouse clubs – 4% of sales
    • Other retail outlets – 6% of sales
slide18

Specialty Cheeses – Retail Growth

  • Supermarket Business 2000 Expenditure Survey
    • Cheese category at 35.5% gross profit margin compared to 29.8% gross profit margin for entire dairy department
  • International Dairy-Deli-Bakery Association (IDDBA) 2001annual foodservice trend report
    • “Cheese has highest gross profit margin of any product sold in dairy department of grocery stores”
slide19

Specialty Cheeses – Retail Growth

  • Supermarket consumers choosing more farmstead/artisan and ethnic cheeses – due to rebirth of “cheese course” at restaurants
  • Greek feta cheese (including flavored feta cheeses) increased 30% in retail sales last year
  • “Other” Italian cheeses and Hispanic varieties significantly increasing in retail sales
slide20

Specialty Cheeses – Retail Growth

  • Consumer data important in specialty cheese market
    • Consumers with household income >$250,000 more than 4x likely to purchase Brie cheese over other cheeses
    • Professionals and consumers with incomes >$100,000 more likely to choose Camembert cheese
    • Havarti cheese has high appeal to middle income consumers earning $50,000 to $59,000
slide21

Specialty Cheeses – Retail Promotion

  • Gourmet Retailer report
    • 60% of retailers offer full-service cheese counter
    • 1/3 of supermarkets offer up to 300 individual specialty cheeses
    • 60% said that artisan cheese makes up more than 50% of the cheese case
    • Most effective ways to promote specialty cheese are sampling/demonstrations and staff recommendations
slide22

Specialty Cheeses – Retail Promotion

  • Gourmet Retailer report
    • Educational “signage” important
    • Type, age, taste profile, country of origin, serving suggestions, care instructions
    • A cheese-wine pairing guide helps promote cheese sales
slide23

Specialty Cheeses – Education

  • University of Wisconsin Center for Dairy Research
    • Dutch Cheese Artisan Course
    • Wisconsin Cheese Grading Short Course
    • Applied Dairy Chemistry Short Course
    • Quality Assurance Short Course
    • Wisconsin Cheese Technology Short Course
    • Wisconsin Master Cheesemaker® Program
slide24

Specialty Cheeses – Education

  • American Cheese Society
    • Special attention to specialty and farmstead cheeses from cow’s, goat’s, sheep milk
    • “Farmstead” cheese – handmade in small quantities produced on the farm using only milk from the herd located on that farm
    • Farmstead producer can direct cheesemaking process from determining the animal’s feed through the final aging of the cheese
slide25

Ethnic/Niche Markets

  • By 2010 ethnic food sales in U.S. will reach U$S75 billion per year
  • Fastest growing ethnic market is Hispanic community
    • U$S 421 billion spending power
    • Hispanic food sales to grow 5.5% per year over the next 50 years
    • U.S. is world’s fifth largest Hispanic marketplace
slide29

Ethnic/Niche Markets

  • Other ethnic/niche cheese markets
    • Greek feta cheese
    • Kosher cheeses
    • English style cheeses
    • Farmstead cheeses
slide30

Farmstead/Artisan Cheeses

  • Wisconsin’s Full Circle Farm – current interest in naturally-occurring fatty acid found in dairy products that may have cancer-fighting abilities
  • Introduced artisan cheese produced from milk of grass-fed cows to promote these health benefits
  • Takes advantage of the higher than normal level of “conjugated linoleic acid (CLA)” in the milk/cheese
  • Web site (www.fullcirclefarm.net) provides detailed description of farm including quietness, humane treatment of animals, fresh grass and clove, farm’s family history
slide31

Special “niche” markets

(with “sub-niches”) for

Specialty Cheeses

  • Supermarket chain “Whole Foods Market” of United States and Canada provides an interesting and opportunistic example/possibility for Uruguay’s dairy industry in the “niche” and “sub-niche” markets
  • Uruguay’s cheese sector (industry and artisan) can provide value-added cheese varieties to the Whole Foods Market chain for the chain’s local, regional, and national markets
slide32

Summary

  • Cheese consumption in U.S. increased during past 30 years
  • Specialty cheese market helping to drive the per capita consumption
  • Specialty cheese retail sales – U$S 2.4 billion in 2000
  • Four P’s (Product, Promotion, Place, Price) of marketing used to describe the specialty cheese market
  • Need to uncover a niche product
slide33

Summary

  • Most rapidly growing niche market is ethnic cheese market
  • Hispanic style cheese is fastest growing sector
  • “Farmstead” cheese market rapidly growing in specific geographic areas
  • Opportunities exist for international manufacturers of specialty cheeses in the U.S. market