Hamish Renton Associates managing director, Hamish Renton told DairyReporter.com that retailer demand for easier-to-merchandise and stack products has limited the development of new, innovative cheese packaging.
This retail pressure has even led to a reduction in the traditional cheese block size, as part of an effort by retailers to fit more units on shelves.
Renton added that while many cheese manufacturers would love to “put bells and whistles” on their packaging, the on-going promotional pricing trend in the cheese sector means that this lack of packaging innovation is likely to continue.
Innovation “squeezed out”
“A lot of the romance has been squeezed out by cheese promotions. Consumers have been trained not to be loyal to a certain brand of cheese, meaning that the consumer is less interested what is actually in the packs,” said Renton.
“They’re coming into the store just looking for the promotion, meaning that cheese is going to sell fast. The shelves need to be packed full of stock to meet this demand.”
As a result, traditional 400g packs of cheese have, in many cases, been shrunk down to 350g at the request of the retailer, said Renton.
“The worst thing that a retailer can do is have an empty shelf,” he said.
This type of retailer control also means that any attempt for innovation in the cheese segment by manufacturers would be a long process.
“If there was all of a sudden demand for 400g packs of cheese, the industry could probably do it in three to four months,” said Renton. “But to deliver a genuinely new packaging format would take manufacturers two to three years.”
Promotion pricing essential
Renton added that while many manufacturers would love to develop new, innovative packaging to house their products, it is essential that they adhere to the demands of the retailer to remain competitive.
“All manufacturers want to put bells and whistles on their packaging. But overall, they just want to protect the cheese itself,” said Renton.
“It is important that manufacturers stay close to retailers to stay on top. The main issue is that manufacturers cannot afford not to use promotions. It is very difficult,” he concluded.