Cheese - UK - July 2007

Table of Contents

• Issues in the Market
• Issues in the market
• Definitions
• Market in Brief
• Market growth is floundering
• Health debate rages
• Growing competition for a slice of the market
• Added value adds margin
• Innovation for the future
• Internal Market Environment
• Key Points
• Health concerns growing
  • Figure 1: Agreement with selected lifestyle statements, 2002-06
• Media labels cheese "unhealthy"
• Fortification
• Production values grow in popularity
  • Figure 2: Agreement with selected lifestyle statements, 2002-06
• Provenance is being developed as a major point of difference...
• ... and consumers are getting more interested
• Organic cheeses are growing
• Environmental concerns growing
• Convenience and cooking at home
  • Figure 3: Agreement with selected lifestyle statements, 2002-06
• Desire to experiment grows
• TV makes chefs of us all
• Education
• Meal occasions
• Key Points
• Bread
  • Figure 4: Consumption of bread in the last 12 months, 2002-06
• Heavy bread users are heavy cheese users
• Opportunities for imaginative sandwiches
• Savoury biscuits
  • Figure 5: Consumption of savoury biscuits in the last 12 months, 2002-06
• Consumers getting bored of the board
• Salads are on the rise
  • Figure 6: Expenditure on pre-packed salads in the last week, 2004-06
• Packed lunches
• Adult snacking
• Broader Market Environment
• Key Points
• ABs influence set to increase
  • Figure 7: changes in socio-economic status, 2002-12
• ABC1s continue to increase over next 5 years
  • Figure 8: Changes in the UK demographic profile, by age, 2002-12
• Ageing population values calcium
• Other factors
• Traffic light labelling -- nutritional value of cheese ignored
• OFCOM Ban on advertising to children
• EU protects origins
• Competitive Context
• Key Points
• Salads
• Fruits
• Sandwich fillings
• Strengths and Weaknesses in the Market
• Strengths
• Weaknesses
• Market Value and Forecast
• Key Points
• Mature, slowing market
  • Figure 9: UK retail sales of cheese, by volume and value, 2002-07
• Volume weakens...
• ...but prices rise in 2007
• Downward pressure on price
• Continentals lose out to Territorials/Regional cheeses
  • Figure 10: UK retail sales of cheese, by value, 2002-06
• Educate the customer: "Cheddar plus one"
• The Forecast and Future
• Market Themes
• Promote new habits
• Convenience
• Health
• Demographic shift
• Provenance and organics
• Spreading growth
  • Figure 11: Forecast of the UK cheese market by value, by sector, 2002-12
• Mixed sector fortunes
• Factors used in the forecast
• Cheddar cheese
• Key points
  • Figure 12: UK retail sales of Cheddar, by value, 2002-07
• Growth slows due to heavy discounting
• Cheddar mix
  • Figure 13: UK retail sales of Cheddar (incl extra mature, vintage and blue), by type, 2002-06
• Strong flavours court strong sales
• Advertising keeps brands visible
• Could mild be the next big cheese?
• Flavoured -- an emerging niche
• Added value -- convenience
• Continental cheeses
  • Figure 14: UK retail sales of Continental cheeses (incl blues & excl Cheddar), by value, 2002-07
• Melting away
• Value is declining...
• ...but volume is rising
• The speciality market of today -- artisan cheese
• New-style Deli counters affect sales adversely
• Branding simplifies consumer choice
• Provenance
• Territorial (regional) cheese
  • Figure 15: UK retail sales of territorial cheeses by value, 2002-07
• Flavours drive sales upwards
• Provenance (origin) proves a powerful marketing tool
• Stilton and Christmas association remains a barrier
• Processed cheese
  • Figure 16: UK retail sales of processed cheese (incl minis and spreads), by value, 2002-07
• Sales decline as consumers opt for "healthier" options
• Natural soft cheese
  • Figure 17: UK retail sales of natural soft cheese (incl spreads), by value, 2002-07
• Market Themes across the Five Sectors
• Snacks and snacking
  • Figure 18: Snacks transcend the 5 sectors -- predominantly Cheddars, soft cheese, and processed, 2002-06
• Children drive snacks market
• Adults' snacks grow too
• Healthy cheese
  • Figure 19: UK retail sales of healthy cheese, by value, 2002-06
• The FSA' s traffic light system raises health and diet awareness
• The market responds with healthy options
• Nutritional value is powerful marketing opportunity
• Fortification (added nutrients) has potential
• Organic has its role
• Convenience
  • Figure 20: UK retail sales of convenience cheese, by value, 2002-06
• Blue Cheeses -- love it or hate it
• The speciality market -- niche by nature
• Market Share
• Key Points
  • Figure 21: Brand shares in the UK cheese market, by value, 2004 and 2006
• Own label loses to brands
• Big players have biggest share
• Kraft gains with reduced fat products
• Bel promotes health and convenience
• Companies and Products
• Key Points
  • Figure 22: Brand map of the cheese market, 2007
• Arla Foods UK plc
• Avilton Foods (Ltd)
• ULN
• Bel UK Ltd
• Castelli UK
• Dairy Crest Group plc
• Dale Farm Limited
• Eurilait
• Fayrefield Foods Ltd
• Ilchester Cheese Co Ltd
• Kavli Ltd
• The Kerrygold Company Ltd
• Kerry Foods Ltd
• Kraft Foods UK Ltd
• Lactalis Mclelland (UK) Ltd
• North Downs Dairy Company Ltd
• Triballat
• Unilever Bestfoods UK Ltd
• Wyke Farms Ltd
• Trade associations
• British Cheese Board and the FSA
• Fine Cheeses from France
• Brand Communication and Promotion
• Key Points
  • Figure 34: Main monitored media spend, 2003-06
• Advertising at its peak
  • Figure 35: Main monitored media spend, by month, April 2005-March 2007
• Advertising is not seasonally sensitive
• Who' s spending what?
  • Figure 36: Main monitored media spend, by company, 2003-06
• Kraft looking to maintain market leadership
• Bel leads on convenient processed
• Driven by impending legislation
• Channels to Market
• Key Points
  • Figure 37: UK retail sales of cheese, by outlet type, 2002-06
• Supermarkets dominate and Tesco leads
• Specialist outlets for specialist cheese
• New format deli counters lose sales
• Not giving the customer what they want
• Supermarkets may re-think strategy
• Consumer 1 -- Who -- Usage and Frequency
• Key Points
• Consumption is variable
  • Figure 38: Consumption of cheese in blocks in the last 12 months, 2002-06
  • Figure 39: Consumption of packeted cheese, cheese spread and speciality cheeses in the last 12 months, 2002-06
• A tale of two sectors
• More people eating cheese in blocks
• Versatility is key for cheese
• Gender divide
• Consumption is lower in London
• Polarisation of under 35s
• "Chav" cheese
  • Figure 40: Propensity to eat packeted cheese, cheese spread and speciality cheese, by age, socio-economic status, and household size, 2006
• Market Segmentation
• Cheese in blocks
  • Figure 41: Consumption of cheese in blocks -- varieties eaten, 2002-06
• Type of cheese eaten -- packeted cheese, cheese spread and speciality cheeses by types
• Soft Cheese Jewel in the Crown
• Products with a processed element
  • Figure 42: Consumption of packeted cheese, cheese spread and speciality cheeses by types, 2002-06
• Children' s eating habits
• Childhood obesity
  • Figure 43: Consumption of cheese, youths aged 7-10, 2002-06
• Mums encourage healthy cheese snacks with 7-10-year-olds
  • Figure 44: Consumption of cheese, youths aged 11-14, 2002-06
• More snacks and nibbles please, say 11-14-year-olds
• Consumer 2 -- When -- Usage Occasions?
• Key Points
  • Figure 45: Ways in which consumers eat or serve cheese, April 2007
• Repertoire analysis
• Women are the key targets
• ABC1 retirees have limited repertoire
• Men less adventurous than women
  • Figure 46: Propensity to eat/serve cheese, in six or more different ways, by gender, by age and socio-economic status, February 2007
• The most popular uses for cheese are declining
• Can' t cook/won' t cook
• Older have traditional habits, but not tastes
• Is cheese with breakfast a step too far?
• Appendix
• Consumer research
• ACORN
• Advertising data
• Abbreviations
• Internal Market Environment
  • Figure 52: Consumption of cheese in blocks in the last 12 months, by consumption of bread and savoury biscuits, 2006
  • Figure 53: Consumption of packeted cheese, cheese spread and speciality cheeses in the last 12 months, by consumption of bread and savoury biscuits, 2006
  • Figure 54: Agreement with selected lifestyle statements, by demographic sub-group, 2006
  • Figure 55: Agreement with selected lifestyle statements, by demographic sub-group, 2006
  • Figure 56: Agreement with selected lifestyle statements, by demographic sub-group, 2006
  • Figure 57: Agreement with selected lifestyle statements, by demographic sub-group, 2006
• Brand communication and promotion
  • Figure 58: Main monitored media spend, 2003-06
• Consumer 1 -- Consumption
• Cheese in blocks
  • Figure 59: Agreement with selected lifestyle statements, by demographic sub-group, 2006
  • Figure 60: Consumption of cheese in blocks in the last 12 months, by demographic sub-group, 2006
• Packeted cheese, cheese spread and speciality cheeses
  • Figure 61: Consumption of packeted cheese, cheese spread and speciality cheeses in the last 12 months, by demographic sub-group, 2006
• Consumer 2 -- Detailed Demographics
  • Figure 62: Occasions at which consumers eat cheese, April 2007
  • Figure 64: Occasions at which consumers eat cheese, April 2007
• The Consumer 4 -- Repertoire analysis
  • Figure 65: Repertoire of cheese uses by demographics, April 2007
• Consumer 3 -- Detailed Demographics
  • Figure 67: Attitudes to cheese, by detailed demograpihics, April 2007
  • Figure 68: Attitudes to cheese, by detailed demographics, April 2007