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    Dairy Market Trends: Cheese Riding High

    August 9, 2004
    The news has been pretty good lately if you're a cheesemaker. Commodity prices are high again, and the sales slump which materialized a little over a year ago disappeared even more quickly. Some credit the late Dr. Atkins and the sudden popularity of low-carb diets.

    Whatever the reason, quarterly sales figures for natural cheese have been impressive.

    By pound volume, natural cheese was up an average of 7.2% in the most recent three quarters shown here. The entire cheese category was up 3.4% by volume for the 52 weeks ended March 28. The growth is driven

    by natural cheese and processed cheese actually lost

    a bit of ground during the same period with volume down 2.6%.

    These numbers, from Information Resources Inc., represent grocery, drug store and mass merchant sales, but do not include Wal-Mart.

    The vast majority of the top brands of natural cheese experienced good sales growth in 2003 and the first month of this year. Private label was up a whopping 14% through Jan. 25.

    Natural cheese has the largest market share and continues to grow at a brisk pace, while processed cheese is losing a bit of ground. Imitation represents just a small share.

    Supermarket sales of sliced natural cheese experienced the most growth of any natural cheese form in 2002, growing at a rate of 21%. Chunk/loaf and shredded forms together, however, account for almost 75% of all the natural cheese sold in supermarkets. And they continue to grow.

    Hispanic cheeses are poised for strong continued growth as the U.S. Latin population increases, and as more non-Hispanics in the U.S. become accustomed to the styles.

    While it is not shown in the graphics, a look at specialty cheese by type shows that many specialty cheese styles are growing by leaps and bounds. Some are unusual cheeses appealing to high-end restaurants and specialty shops, but others are styles that many U.S. consumers have been enjoying for years.

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