If variety truly is the spice of life, then cheesemakers certainly have set their sights on livening things up. Once a category on the verge of being branded a commodity, cheese has become one of the most unique and innovative sections of the supermarket.

And that’s exactly why consumers love it so. Faced with any eating occasion, from a casual lunch to a fancy dinner to a late-night snack, cheese offers consumers a multitude of options in flavor and form. Health-minded consumers even have their choice of fat content and, increasingly, fortification.

According to the most recent figures available from the U.S. Department of Agriculture, Americans ate an average of 31.3 pounds of cheese per person in 2004, up 20 percent from 1993. By 2014, that number is expected to rise to 34 pounds per person annually. Cheesemakers attribute increases in cheese consumption to a number of factors, including the lingering impact of the low-carb craze, which heightened consumers’ awareness of the benefits of high-protein foods like cheese.

“Even though the popularity of the low-carb diets has fallen by the wayside, we are still enjoying some of the higher levels that we did during the heyday of Atkins and South Beach,” says Barbara Gannon, vice president of corporate and marketing communications, Sargento Foods, Plymouth, Wis.

TOP 10 INDIVIDUAL NATURAL SLICED CHEESE BRANDS*
	$ Sales (In Millions)	% Change vs. Year Ago	Dollar Share	Unit Sales (In Millions)	% Change vs. Year Ago
Total Category	$649.4	7.1%	100.0%	221.8	9.7%
Private Label	187.9	10.4	28.9	76.6	13.9
Sargento	85.1	4.7	13.1	29.6	7.6
Kraft	51.7	2.3	8.0	17.9	4.2
Tillamook	39.2	5.2	6.0	8.8	4.1
Alpine Lace	26.7	7.3	4.1	6.6	1.7
Kraft Deli Deluxe	25.8	45.3	4.0	9.0	48.1
Kraft Cracker Cuts	22.8	2.5	3.5	10.0	6.3
Sargento Deli Style	21.1	19.3	3.3	7.2	20.1
Kraft Cracker Barrel Cracker Cuts	17.4	26.5	2.7	5.8	31.8
Kraft Deli Thin	16.1	6.2	2.5	5.5	8.6
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending June 18, 2006. SOURCE: Information Resources Inc.

In Cabot, Vt., Jed Davis, director of marketing, Cabot Creamery Cooperative, says the emerging low-glycemic approach to dieting, widely promoted on NutriSystem commercials, bodes well for cheese. While the concept of low-carb dieting was relatively easy for consumers to understand, however, Davis is concerned that low-glycemic dieting may just prove too difficult to many consumers to grasp.

 “One of the beauties of the low-carb craze was that any Joe or Jane Consumer could easily find out whether something was low-carb or not,” Davis says. “This is a little tougher. It requires a little more effort to decipher what’s necessary.”

As a result, Davis questions whether low-glycemic dieting will catch fire the way low-carb did. Instead, he predicts a return to good-old calorie-counting. Again, he says, cheese definitely has a place within traditional reduced-calorie dieting, a sentiment that is echoed by Rick Naczi, executive vice president of U.S. sales and marketing, Dairy Management Inc. (DMI), Rosemont, Ill. He points to his organization’s 3-A-Day of Dairy weight-loss campaign as an effective communications vehicle which has convinced consumers that not only do they not have to give up cheese to lose weight, but their weight-loss efforts will actually be more effective if they regularly consume dairy products, including cheese.

“The myth was that you had to cut cheese out completely if you wanted to lose weight,” Naczi says. “What the 3-A-Day weight loss message has done is shown consumers that cheese can be part of a calorie-restricted diet and they will still get the outcomes that they want.”

Once consumers learned that cheese was no longer taboo, they increasingly began incorporating it into eating occasions when they previously would have consumed so-called “empty calories” in the form of cookies, chips, doughnuts and other high-calorie foods with lesser nutritional value. Thus emerged the burgeoning “snack cheese” sub-category, as processors rushed to answer the demand for handy, on-the-go cheese snacks.  Among the earliest — and most successful — entrants, Sargento SunBursts and Stars and Moons, a line of bite-sized, shaped cheese snacks sold in 7-ounce resealable packages and Kraft Cracker Cuts, pre-cut cheese chunks sized to fit perfectly on a cracker.

The trend toward snacking cheeses also led to an incredible surge in the popularity of string cheese, a perennial kid-favorite now increasingly embraced by adults. Lincolnshire, Ill.-based Saputo Cheese USA Inc., maker of the popular Frigo Cheese Heads line, found itself fighting to defend its turf as Kraft, Borden and other major players began rolling out their own string cheese products.

In recent months, Heluva Good LLC, a Sodus, N.Y.-based subsidiary of Chelsea, Mass.-based HP Hood LLC, rolled out Heluva Good Real Cheese Snacks, a line of naturally aged cheese snacks geared toward kids and adults. Sold in reclosable bags of 10 individually wrapped pieces, Heluva Good Real Cheese Snacks are available in Sharp Cheddar, Monterey Jack with Jalapeno Peppers and Mozzarella String Cheese varieties.

Sargento has focused many of its cheese snack efforts on the so-called “alternate channels” class of trade, rolling out “convenience-pack” versions of some of their popular snacking cheeses, like 2-ounce bags of Stars and Moons and SunBursts, 2-ounce packs of mini mozzarella string cheese and 2-ounce packs of mini-cheddar bars.

Another Sargento innovation, Cheese Dips!, was initially introduced in convenience stores, dollar stores, and military installations, but is currently in the process of being rolled out in retail groceries. The product is available in three varieties: Cheese Dip & Buttery Pretzel, Cheese Dip & Tortilla Chip and Cheese Dip & Zesty Ranch Bagel Chip. Gannon notes that the shelf-stable nature of the product allows for it to be merchandised near other popular snacks.

Responding to growing requests for portion control products, Cabot Creamery Cooperative rolled out Cabot Snack Packs in late 2005. Each Snack Pack contains eight pre-packaged 3¼4-ounce bars of naturally aged cheese. Davis says health-conscious consumers have responded well to the convenience-oriented product, which is currently available in two varieties — Sharp Cheddar and 50% Light Cheddar.

“It delivers a lot of flavor in just a few bites,” Davis says. “Yet, with the calorie counts being low, it’s the type of thing that’s going to make any mom happy to put in a lunch pack, whether it’s for Dad heading out the door to work, for the kids heading off to school, or the entire family heading out to a picnic this summer.”

Land O’Lakes Inc., Arden Hills, Minn., also unveiled a line of portable cheese products designed for on-the-go snacking. Land O’Lakes Snack ‘N Cheese To-Go features individually-wrapped cheese in a variety of flavors: Chedarella, Co-Jack, Medium Cheddar, Mild Cheddar, Monterey Jack, Reduced-Fat Mild Cheddar, Reduced-Fat Co-Jack, and Reduced-Fat Hot Pepper American.

Northfield, Ill.-based Kraft Foods Inc. has also embraced the snacking phenomenon, introducing Kraft To Go! Crackers and Cheese, featuring Kraft Natural cheese paired with mini Nabisco crackers in a portable container. Unlike Sargento’s Cheese Dips, Kraft To Go requires refrigeration. They are currently available in two varieties: Natural Cheddar with Mini Ritz and Natural Colby & Monterey Jack with Mini Triscuits. Each package contains two individual 1.5-ounce single-serve packs.

In recent months, Kraft also rolled out Crumbles, a line of natural cheese “crumbled right off the block.” Originally introduced in four varieties — Sharp Cheddar, Mozzarella, 2% Colby & Monterey Jack and Three Cheese (Monterey Jack, Colby, and Cheddar) — Crumbles are also now available in Italian and Mediterranean flavor blends “to give your dishes a special authentic touch.”

Home cooks are also the primary market for Kraft’s Grate-It-Fresh, an innovative new product featuring restaurant-quality parmesan cheese that can easily be grated at home. Retailing for $4.99, Grate-It-Fresh consists of a 7-ounce block of cheese in a glass jar with a built-in grater. Consumers simply twist the bottom of the jar to produce freshly grated parmesan.

TOP 10 INDIVIDUAL NATURAL SHREDDED CHEESE BRANDS*
	$ Sales (In Millions)	% Change vs. Year Ago	Dollar Share	Unit Sales (In Millions)	% Change vs. Year Ago
Total Category	$1,997.2	-2.7%	100.0%	826.4	1.9%
Private Label	884.2	0.1	44.3	385.3	5.6
Kraft	562.5	-2.3	28.2	227.1	1.7
Sargento	201.6	-11.1	10.1	80.0	-6.5
Crystal Farms	80.8	-1.1	4.0	32.5	4.9
Borden	53.2	-7.4	2.7	25.2	-5.2
Kraft Free	29.8	-4.4	1.5	11.3	0.9
DiGiorno	28.7	5.5	1.4	7.9	2.6
Kraft Classic Melts	22.7	-24.1	1.1	9.7	-20.7
Stella	14.0	7.7	0.7	4.2	5.5
Sargento Bistro Blends	13.8	50.0	0.7	6.1	51.8
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending June 18, 2006. SOURCE: Information Resources Inc.

“In the minds of consumers, adding cheese to a meal adds quality,” Naczi says. “When you use those crumbles or those shreds to enhance a meal that you prepare quickly at home, that’s a real plus for whoever’s making the meal that night.”

Sargento continues promoting its Bistro Blends line for use in home cooking. The line of shredded cheeses coupled with various seasonings has performed exceptionally well, up 50 percent in dollars and 51.8 percent in units. Bistro Blends are currently available in three varieties: Mozzarella & Asiago with Roasted Garlic, Mozzarella with Sun-Dried Tomatoes & Basil and Cheddar & Monterey Jack with Tomatoes & Jalapeno Peppers. The latter flavor is actually a reformulated version of one of the line’s flagship varieties, Cheddar Salsa. According to Gannon, Sargento added Monterey jack to the mix and modified the seasoning levels in response to consumer feedback. All in all, however, Gannon says Bistro Blends have proven very popular, particularly with consumers seeking to cook gourmet meals at home.

“We saw that cheeses were being used with herbs and spices in restaurants, but consumers cooking at home are often too time-pressed,” she says. “If we can give them more flavor without them needing to take the time to chop herbs or sun-dried tomatoes or garlic, that’s considered very positive.”

TOP 10 INDIVIDUAL PROCESSED CHEESE SLICE BRANDS*
	$ Sales (In Millions)	% Change vs. Year Ago	Dollar Share	Unit Sales (In Millions)	% Change vs. Year Ago
Total Category	$1,294.8	-8.6%	100.0%	514.6	-7.2%
Kraft Singles	501.3	-6.4	38.7	194.9	-5.6
Private Label	316.8	-9.5	24.5	148.6	-3.9
Kraft Deli Deluxe	121.1	-5.6	9.4	29.1	-5.3
Borden	97.0	-14.2	7.5	44.7	-12.0
Kraft Velveeta	64.3	-7.2	5.0	18.4	-4.4
Kraft Free	31.3	-12.6	2.4	8.1	-11.2
Land O’Lakes	30.6	-11.4	2.4	9.7	-16.1
Crystal Farms	21.7	-12.4	1.7	9.9	-10.8
Galaxy Nutritional Foods Veggie Slices	11.6	12.1	0.9	3.8	7.5
Kraft Deluxe	9.9	-18.0	0.8	3.4	-17.9
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending June 18, 2006. SOURCE: Information Resources Inc.

To encourage consumers to incorporate Bistro Blends into their home meal occasions, Sargento provides a wealth of recipes via its Web site, as well as on a promotional DVD, “Entertaining At Home,” starring Emmy Award-winning chef and television host Michael Chiarello. Consumers can receive the DVD in exchange for sending in one Bistro Blends UPC label and a nominal shipping and handling charge.

Kansas City, Mo.-based American Dairy Brands (ADB), a division of Dairy Farmers of America, has recently followed Sargento’s lead, rolling out Borden Shred Medley, a line of shredded cheese blends in Garden Blend, Southwest Style, Pesta Parmesan and Tuscan Herb varieties. Unlike Sargento’s Bistro Blends, which features the seasonings mixed right in with the cheese, Borden’s Shred Medley contains a seasoning packet, which allows the consumer to determine their own level of seasoning, should they decide to use the seasoning at all.  

Among the vast majority of new product introductions, one underlying trend is clear: the shift toward natural cheese. As consumers seek to eat healthier, they are increasingly interested in what’s inside the products they purchase. Unsure exactly what goes into making pasteurized, processed cheese, a growing number of consumers have begun gravitating toward natural cheese, explains Jay Allison, national sales manager for Tillamook County Creamery Association, Tillamook, Ore. Simply put, natural cheese is a product they can trust. That sentiment is echoed by Mark Korsmeyer, president of American Dairy Brands: “Natural cheese has the connotation of a quality wholesome product versus something that comes right out of the shoot labeled processed.”

The shift toward natural cheeses is evident in data from Chicago-based Information Resources Inc. (IRI), which shows an apparent trade-off taking place. During the 52-week period ending June 18, 2006, natural cheese slice sales in supermarkets, drug stores, and mass merchandisers, excluding Wal-Mart, rose 7.1 percent in dollars and 9.7 percent in units, while processed slice sales fell 8.6 percent and 7.2 percent, respectively.

Answering the demand for more natural cheese slices, Sargento rolled out Duo Packs, combining two different types of sliced natural cheese in one package. Varieties include Medium Cheddar & Colby-Jack, Swiss & Baby Swiss and Provolone & Medium Cheddar. Gannon reports that consumers have responded well to the line, which is designed to provide variety, while reducing waste, particularly in smaller households.

“People like having two different kinds of cheese in one pack because they know they can use it up before there would be any questions of spoilage,” she explains. “If they bought separate packages, they might not be able to use it all up in a week.”

Responding to the growing demand for natural cheese slices, Cabot has also expanded its slices line, although Davis believes the industry has its work cut out for it in explaining to mainstream consumers why natural slices carry a higher price point.

“There’s a little bit of education involved because a lot of people tend to look at it and say, ‘Why should I pay more for the natural slices when I can get this pasteurized processed stuff for quite a bit cheaper?’” Davis says. “But for those consumers who are really interested in the foods they are eating, the natural slices are definitely hitting a chord.”

Also hitting a chord with so-called “foodies” are artisinal cheeses, defined as “cheese that has been hand-crafted in small batches according to time-honored techniques, recipes, and traditions.” While Naczi says such specialty cheeses remain a small part of the category, he stresses they “add that cache to cheese that is really wonderful.”

To that end, Cabot introduced Cabot Cloth-Bound Cheddar, a single-breed, small batch cheddar which is cave-aged to produce a “buttery flavor with caramel undertones.” According to Davis, the cheese is produced using the traditional, old-world style which uses the exterior mold to create a rind that allows the cheese to interact with its aging environment. Because Cabot Cloth-Bound Cheddar is aged underground, Davis says, it “comes up with some real interesting flavors.” Increasingly, he says, that’s what consumers are looking for.

“There’s always going to be some demand for the supermarket cheeses,” Davis says, “but it’s important to have the real gourmet specialty cheeses that just add another element of interest to what cheese has to offer.”

While the majority of artisinal cheeses are produced in small “micro-cheeseries,” the overall popularity of cheese has led several of the major players to expand their facilities, oftentimes into areas not traditionally considered to be in cheese-making country. According to Naczi, the reason is simple: cheesemakers are merely going where the milk supply is. Fueled by the growing demand for natural Swiss cheese, Logan, Utah-based Gossner Foods Inc. opened a 155,000-square-foot plant in Heyburn, Idaho, last fall. According to president and chief executive officer Dolores Gossner Wheeler, the company chose Heyburn in part because of an abundant local milk supply.

Meanwhile, Denver-based Leprino Foods has made major upgrades at several of its plants and embarked on an $83 million expansion of its cheese production plant in Michigan’s Allendale Township. Hilmar Cheese recently broke ground in the Texas panhandle, while Tillamook nears completion of a $50 million expansion of its Boardman, Ore., plant. Once completed, Tillamook’s annual cheese production is projected to reach 190 million pounds.

At a cost of $200 million, Southwest Cheese — a joint venture of Glanbia Foods, Dairy Farmers of America, and Select Milk Producers — is expected to produce more than 250 million pounds of cheese and 16.5 million pounds of whey each year, making the 280,000-square-foot plant in Clovis, N.M., one of the largest cheesemaking facilities in the world. According to Korsmeyer, the plant is ramping up to nearly full capacity.

Such extensive expansions, coupled with constantly evolving consumer needs have Cabot’s Davis convinced that the cheese category is nowhere near mature, despite 98 percent household penetration and per capita consumption greater than 31 pounds per person.

“You might be able to convince me that it was mature and maxed out if I could honestly tell you that we, as dairy manufacturers, have met all consumer needs,” Davis says. “The beauty about consumer needs is they evolve all the time. Even if we are doing a good job of meeting them now, they may evolve in a way that creates opportunities for us to meet in the future.”