Once the stalwart of dairy, the cheese category has hit some more trying times. If it isn't shredded it just is not doing much.

The growth in natural cheese is still there, but the pace has slowed considerably. A look at quarterly sales in the food, drug and mass merchandiser channels indicates that the 9.8% growth of the first quarter of 2002 dropped to 1.9% by the last quarter before rebounding a bit at the beginning of 2003. That's dollar sales, but units show a lot more uniformity. Retail prices may be coming down, as the commodity prices have stayed low for more than a year.

Sales of processed cheese have actually lost ground in the last five quarters whether measured by dollars or unit sales. Most recently, unit sales of processed cheese have stabilized a bit. All these figures are from Information Resources Inc., and do not include Wal-Mart.

With consumers always seeking convenience, shredded cheese is the form that has performed well, even while the overall category slows. But even it's not immune to some slowdown. After peaking in the spring of 2002, dollar sales growth have lost some momentum. Again, things look better in the unit column, with most quarters sowing at least _2-3% growth.

Overall cheese sales between January 1 and Oct. 6 of 2002 were down by .5%, according to IRI and the International Dairy Foods Assn. And looking at it by form, only shredded cheese gained share, elbowing out all other forms during the period. Shredded cheese now accounts for nearly a quarter of all the cheese sold in the United States.

These figures only represent retail sales, and foodservice may be getting hit worse as sales of cheeseburgers and pizzas have dropped during the economic slump that began at the end of 2000.

So what's a cheesemaker to do? Well one logical step has already been taken-production is down. Maybe some of the raw milk that was headed for the vat is now going to the yogurt plants. Perhaps this is one part of the food industry that's not recession proof. And if consumers aren't eating as much cheese now they may come back as once the economy turns around.