KANSAS CITY - The circumstances of 2020 created explosive growth for most grocery retail categories. Year-end numbers from Chicago-based IRI show that total edible sales in 2020 were 12.5% above total sales in 2019.
Cheese quickly emerged as a category-growth star over the last 12 months, IRI’s Chris Costagli, principal of client insights and Kelly Krumholz, consultant of client insights, shared in an April webinar hosted by the Madison, Wis.-based International Dairy Deli Bakery Association. As more individuals and families began shaking up their routines from working at home to cooking at home, to having small, intimate gatherings with immediate family, cheese sales skyrocketed.
Overall, category sales grew 18.1% in 2020 with cheese sales in the dairy case accelerating by 18.9% and deli cheese sales jumping up 16.8%. Total cheese sales totaled $3.4 billion. To put that growth into perspective, that is 517 times the amount of cheese sales in 2018 and 13 times the amount of cheese sales in 2019.
“COVID changed a lot for many of us,” said Costagli. “2020 was truly a huge year for the category and many brands saw tremendous growth as a result. During the height of the pandemic 45% of cheese buyers reported buying more cheese than normal to stockpile and again to support that need for in-home cooking.”
How consumer attitudes shifted in 2020
The consumer shift to spending more time in the home is having a huge impact on the cheese category and changing the way consumers approach buying cheese.
With more consumers spending increased time at home, shoppers have started seeking out larger packaging sizes due to increased shopping at club stores, a desire to stock up on cheese, better value, not having the need to eat on-the-go, and shopping less for single-serve items.
Cooking- and eating- from-home trends were easily reflected in IRI’s cheese segment data for 2020. Overall, 50.9% of shoppers reported buying more cheese in 2020. Shredded cheese, which is easy to melt into a dish or sprinkle on top of a meal, emerged as a top player with sales that grew by 24.8%.
Sliced cheese, which saw a rise along with at-home sandwich preparation, also saw notable sales, growing by 16.4% across the board. Among top sliced cheese varieties in 2020 were provolone, Colby jack, Monterey jack, muenster, gouda and American cheeses.
Meanwhile, snacking cheeses only saw slight growth of 4.7% above 2019 sales in 2020. While snacking cheeses have seen significant growth over the last few years, the need for on-the-go and portable snacks has not been as prevalent during the pandemic.
Between staying at home for work and school, a pattern of buying larger sizes, price increases, reevaluating spending preferences and out-of-stocks, cheese snacks had many forces working against the category.
“When all of sudden now everything’s at home, you can make your own snacks at home, and make them the exact way you want them rather than having to choose from options that are already prepared by manufacturers,” noted Costagli. “You can buy a chunk of cheese, a box of crackers, a cucumber and a bag of grapes and snack that for a week for yourself and for the kids and do it at a lower price point than buying pre-made snacks for the whole household.”
Experimenting with flavors
While spending more time than ever before at home, consumers have been focusing on indulgence and experimenting with new flavors and cuisine at home.
“Customers are likely going to continue to give themselves little indulgences,” said Krumholz. “This has been a stressful time and that premium and indulgence is part of self-care — I earned it, I deserve it, I need it for my mental sanity.”
In the 26 weeks leading up to Oct. 4, 2020, premium and super premium cheese gained 10.7% and 17%, respectively, in dollar sales.
Michelle Trowbridge, channel marketing manager for Madison-based Dairy Farmers of Wisconsin, has noticed that in the absence of being able to try new restaurants or even travel to try new cuisines, consumers have been more interested in experimenting with new cheeses in the last year.
Trowbridge reported that the pandemic has helped people explore new varieties and flavors of cheese which has helped specialty cheese become more accessible. Consumers are also purchasing cheese that they may have never tried before. Oftentimes they purchase it for a special recipe they’re cooking at home and then they want to know what else they can do with it, she noted.
“There’s no traveling right now, so you’re traveling to Italy through a beautiful Wisconsin Parmesan, you’re traveling down South with a beautiful, spicy, flavorful cheddar,” Trowbridge said. “So, we’re giving them the experience through food where they would traditionally fly somewhere to find it. That’s where we’re seeing a lot of interest. It’s about beauty and what you do with your food. And you have the time to do it, to make a restaurant quality cheese board or meal at home. People long for that.”
Hispanic spices, smoked herbs and fruit flavors are among the top varieties where Dairy Farmers of Wisconsin is seeing growth.
Plant-based cheese takes off
While 2020 was a success for the entire cheese category, plant-based cheese more than doubled the growth of dairy cheese, expanding by 48.1% in 2020 and adding 33% more buyers than the category had in 2019.
“We are seeing consumers really get into plant-based cheese and become more interested,” said Krumholz. “Where this growth is coming from is basically leaning into adoption areas that are fairly common and popular and aligned with mainstream dairy consumption. We’re seeing formats like shreds and slices that are very familiar with consumers used a lot in applications.”
In fact, plant-based cheese shreds make up 45.5% of plant-based cheese sales, slices make up 42.2%, and all other forms of plant-based cheese make up 12.4%. Consumers are most interested in cheddar (32.7%) plant-based varieties, followed by mozzarella (22.3%) and American (8%).
Over the last 12 months, Fairfield, NJ-based Schuman Cheese has seen significant growth in the plant-based category. Schuman’s plant-based cheese brand Vevan has been growing in popularity over the last year.
“Plant-based continues to see significant growth as more flexitarian interests arise,” said Neil Cox, Schuman’s chief customer officer. “As the plant-based arena gets larger, we’ve seen consumers who aren’t necessarily vegan but like to take a break every now and again. And as plant-based products have improved, the category continues to grow.”
As more consumers begin to adapt flexitarian lifestyles driven by health and wellness benefits and sustainability goals, the plant-based cheese category is expected to continue growing.
What’s next for cheese trends?
By the beginning of April, 15% of the US population was fully vaccinated against COVID-19. That number will continue rising after President Joe Biden requested that states open vaccine appointments up to all US adults by April 19.
As more adults get vaccinated against the virus, hope for a return to pre-pandemic normalcy grows. But that may take a little longer than what many hope for. Surveys conducted by IRI suggest consumers will continue to take COVID-19 precautions and continue newly adopted habits until herd immunity takes hold, which is achieved when 70-85% of people are immune to COVID-19.
About 30% of US adults indicated to Pew Research in February 2021 that they will not be getting the vaccine at all, and currently, no vaccines have been approved to be given to those under the age of 16.
According to surveys conducted by IRI, 41% of consumers won’t feel comfortable returning to pre-pandemic habits until the infection rate is close to zero, while 35% say they don’t plan on adjusting their newly formed habits until over 70% of the population is vaccinated.
“Key habits that we expect to stick around is the interest in self-care. Consumers want to take care of their health, how they deal with stress, ensure they get their vitamins and minerals,” said Krumholz. “The home has rapidly become an all-in-one remote work office, restaurant, movie theater, and we’re expecting that to stick around too.”
Krumholz predicted that even as workers begin to return to the office, it won’t look like it used to, and consumers will embrace the flexibility of the work-life balance the last year has introduced. She suggested that retailers and manufacturers focus on ways cheeses can be used to help meet the new areas consumers will continue to focus on:
- Self-care – focus on cheeses that include vitamins and minerals, support immunity, support sleep, help with anti-anxiety, and include CBD cheese products in store selection.
- At-Home Entertainment – feature cheeses that support staycations, backyard fun, subscriptions, DIY and kits.
- Ecommerce – feature cheeses that can be purchased through click and collect, home delivery and DTC.
- Sustainability – focus on cheeses that are sourced responsibly involving animal care, methane, packaging, waste and water.
- Remote Work – feature cheeses that can be used in easy lunches and meal kits.
- Indulgence and Premium - offer charcuterie kits.
- At-Home Cooking – offer cheeses in larger quantities, greater varieties, meal kits, meal prep, and provide inspiration.