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US specialty and natural cheese market booming, hitting $17.4bn in 2015

Mary Ellen Shoup

By Mary Ellen Shoup+

19-May-2016
Last updated on 19-May-2016 at 17:46 GMT2016-05-19T17:46:09Z

Consumers are demanding bold-flavored cheeses made from organic milk from grass-fed cows.
Consumers are demanding bold-flavored cheeses made from organic milk from grass-fed cows.

A report by Packaged Facts estimates the total US retail sales of the natural and specialty cheese market at $17.4bn, growing at CAGR of 4.1% since 2011, largely driven by lower prices and the consumer snacking trend. 

The report predicts that the specialty cheese market will grow by a CAGR of 3.5% to reach $20.7bn in 2020.

Addressing consumer health concerns

Cheese and dairy companies have continued to market cheese as a nutritious food while also addressing consumer health and diet concerns with organic cheeses, and cheese made from higher quality milk from grass-fed cows free from artificial growth hormones.

More and more Americans are also ditching processed cheese for natural or imported cheese products. According to the report, 77% of US households ate processed cheese in 2005, which declined to 73% in 2015.

Cheese as snacks

Cheese manufacturers are capitalizing on snacking and on-the-go eating trends with string and stick cheeses, and other chunk-sized packaging.

“Natural cheese is well positioned to further take advantage of the increasing snacking trend, convincing consumers not only that natural cheese is healthier than processed versions, but a much better snacking option than cookies or chips,” the author of the report Tom Pastre told DairyReporter.

Broadening flavor horizons

“Above all else taste drives food and cheese consumption,”  Pastre said. “Boldness is in demand and is coming from spices, peppers, smokiness, and heat.” 

Cheese is still considered an indulgence by many Americans who are expanding beyond traditional flavors like cheddar and mozzarella to higher-priced specialty and ethnic cheese.

“Hispanic varieties, aged and artisanal products continue to flourish with robust flavor profiles and textures. Mass brands and private label store brands have jumped on the bandwagon to meet consumer desire for bolder, more robust flavors and gourmet-quality cheeses,” Pastre said. 

Private label companies dominate market share

The specialty and natural cheese market is highly fragmented with hundreds of small manufacturers comprising less than 1% of the market share, and only a few large companies. Kraft had a 17% share of total sales and Sargento was a distant second with a 9% share of sales, the report stated.

However, private label products are significant, accounting for over 40% of sales in 2015.

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