For the Health of It
By Julie Cook Ramirez
Reveling in its newfound recognition as a healthy snack, cheese responds to changing consumer preferences.  
Cheese has never carried a reputation as a diet food — or even a particularly healthy food for that matter. Due to its relatively high fat content, cheese has been branded as a food that should be eaten in moderation.
In fact, many consumers have come to believe they should feel guilty when indulging in a cheese-laden meal, like treating themselves to a plateful of pizza — even sprinkling their favorite shreds onto a green leafy salad should result in, at the very least, a penance of “being good” for a couple of days — dietarily speaking, that is.
In recent years, however, cheese lovers have found a reason to rejoice, as scientific evidence has emerged that dairy products, including cheese, offer a wealth of health benefits far beyond their high protein content. In fact, it’s been shown that consuming calcium-rich dairy products boosts metabolism, actually helping consumers lose weight and burn fat. Finally, cheesemakers realized they were in a position to have the last laugh, as the time had come to say goodbye to the notion that eating cheese automatically led to tight waistbands, oversized thighs and double chins.
  $ Sales (In Millions) % Change vs. Year Ago Dollar Share Unit Sales (In Millions) % Change vs. Year Ago
Total Category $5,974.2 7.4% 100.0% 2,173.8 1.6%
Private Label Shredded 872.6 7.9 14.6 365.5 6.1
Private Label Chunks 834.1 2.4 13.9 294.2 -2.2
Kraft Shredded 567.7 10.2 9.5 221.9 3.1
Kraft Chunks 232.2 4.2 3.9 99.2 -4.4
Sargento Shredded 224.2 0.5 3.8 85.6 -3.3
Private Label Slices 169.2 14.6 2.8 67.3 7.2
Tillamook Chunks 153.2 8.6 2.6 32.1 1.9
Kraft SS Grated Cheese 136.5 0.3 2.3 43.8 -0.2
Kraft Cracker Barrel 102.8 2.4 1.7 34.6 0.6
Private Label String 99.1 4.9 1.7 87.2 -9.6
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart,for the 52-week period ending July 10, 2005.
SOURCE: Information Resources Inc.
The realization that cheese could be part of a healthy eating plan was reinforced by the emergence of the Atkins and South Beach diets, which actually gave cheese the thumbs-up for consumers looking to lose weight via a high-protein, reduced-carbohydrate diet. “The Atkins and other low-carb diets had a very positive impact on the cheese category, as cheese was identified as one of the primary foods that you should be eating in the context of those diets,” says Grant Prentice, executive vice president of marketing and business development, Dairy Management Inc. (DMI), Rosemont, Ill.
Although the low-carb craze has proven itself to be — as many people predicted — a passing fad, its positive effects on the cheese category appear to be long-lasting. While the craze was running its course, droves of Atkins and South Beach devotees turned to cheese as a low-carb alternative to traditional carb-laden snacks, such as doughnuts, chips and cookies, that were suddenly deemed no-no’s. Once consumers opened their minds to snacking on cheese, they weren’t about to go back, even if they had chosen largely to chuck the overall low-carb way of life.
“[The low-carb craze] has left behind a pretty important residue in the way people eat in that they are now more favorably predisposed towards foods that have a higher level of protein,” Prentice says. “There is a lingering, positive effect in the way that they eat and the way that they think about cheese.”
Not surprisingly, snacking cheeses — cubes, shapes, string cheese and the like — fared particularly well in light of the low-carb craze. In recent months, Specialty Cheese Co., Lowell, Wis., introduced Popped Cheese, a bite-sized snack that tastes like popcorn, but without corn or carbohydrates. The product is manufactured by putting kernels of the company’s natural cheese through a special baking process, which causes them to “pop.” The result is a snack that first crunches, then melts in the mouth. To make it more closely resemble popcorn, consumers are encouraged to microwave the product.
In Plymouth, Wis., Sargento Foods reports strong response to its growing line of snacking cheeses, including Sargento SunBursts and Stars and Moons — bite-sized, shaped cheese snacks sold in 7-ounce resealable packages. These offerings of about two years ago have since been joined by Cracker Snacks, portion-controlled cheese slices designed to fit atop a cracker.
While these “finger-friendly” cheese snacks are geared toward adults, products like the Sargento shapes as well as the ever-popular string cheese continue to garner favor with kids and grown-ups alike. According to Mike Stammer, DMI’s director of information services, string cheese sales rose nearly 12 percent over the past year.
That comes as no surprise to Steve Josen, vice president of marketing for Lincolnshire, Ill.-based Saputo Cheese USA Inc., maker of the popular Frigo Cheese Heads line. This past year, Saputo expanded its already impressive string cheese offerings with the introduction of Frigo Cheese Heads Juniors, bite-sized cheese snacks that combine string cheese bites with Mild Cheddar and Colby Jack cubes. Measuring approximately 5/8-inch square, Juniors offer “fun, pop-in-your-mouth snacking appeal,” Josen says.
Saputo also recently rolled out Frigo Cheese Heads Cheesy Nacho Swirls, a 100 percent natural string cheese with a mild creamy nacho cheese flavor. The company spent two years developing the product, which Josen says is designed to appeal not only to kids, but to the whole family.  
Known for its co-branding efforts with such hot kid properties as Game Boy, Pokemon and Looney Tunes, Saputo recently wrapped up a promotion that leveraged the immense popularity of the hit family movie, “The Incredibles.” Consumers were eligible for a $5 rebate if they submitted the required proofs of purchase from three packages of Frigo Cheese Heads string cheese and the DVD or video tape of the popular film. Looking to repeat the success of last year’s back-to-school promotion, which featured TV’s No. 1 animated family, “The Simpsons,” Saputo partnered with game-maker Hasbro to offer consumers the opportunity to win $500 in toys and games this fall.  
Such initiatives helped Saputo successfully fend off growing competition for the string cheese consumer’s dollar. In recent years, two major cheese players — Borden and Kraft — entered the string cheese category, seeking to give Saputo a run for its money. American Dairy Brands (ADB), a Kansas City-based division of Dairy Farmers of America Inc., rolled out Borden String Cheese in select Wal-Mart Supercenter locations. Meanwhile, Northfield, Ill.-based Kraft Foods Inc. began selling Kraft 2% Natural Cheese Sticks. Available in Cheddar and Extra Sharp Cheddar, Kraft’s one-ounce cheese sticks are touted as both an excellent source of calcium and recommended by the best-selling South Beach Diet.
Despite such competition from two deep-pocket cheese makers, Josen proudly points out that Saputo’s Frigo Cheese Heads retained their crown as the No. 1 string cheese brand in food, drug and mass merchandisers.  
So just what exactly is driving the trend toward snacking cheeses? According to Jed Davis, director of marketing, Cabot Creamery Cooperative, Cabot, Vt., it’s all about ease of use. “Consumers are looking for convenience in terms of form, like cubes or slices that are just the right size to fit on a burger,” he explains. “It’s that rip-and-pour mentality. Tear open the bag; throw it on a platter and you’ve got yourself a cheese tray for the football game or whatever.”
Taste Sensation
While dairy representatives generally agree that fewer consumers are cooking meals at home anymore, those amateur chefs who do still take the time to whip up a tasty meal for their family or friends are actively seeking out products that will make the process easier. Thus, the continued growth of shredded cheese blends.
Earlier this year, Tillamook County Creamery Association, Tillamook, Ore., added Tuscan Blend to its shredded cheese line. The combination of sharp cheddar, parmesan and mozzarella cheeses is sold in 8-ounce packages at select retailers. This new offering joins a family of shredded cheese blends that includes Mexican Blend, a combination of pepper jack and cheddar; Queso Blend, a mix of Monterey jack and cheddar; and Italian Blend, an intermingling of mozzarella and cheddar.
Around the same time, Sargento unveiled Bistro Blends, a line of shredded cheese blends featuring herbs and spices consumers commonly use when cooking with cheese. Current varieties include Cheddar Salsa with Tomato & Jalapeno Peppers; Mozzarella with Sun-Dried Tomatoes & Basil; and Mozzarella & Asiago with Roasted Garlic. Rather than using “fine, powdery particulates,” Sargento included large pieces of spice in its Bistro Blends offerings, in order to give consumers “a big flavor hit on [their] tongue,” according to Barbara Gannon, vice president of corporate and marketing communications.
  $ Sales (In Millions) % Change vs. Year Ago Dollar Share Unit Sales (In Millions) % Change vs. Year Ago
Total Category $2,026.9 7.0% 100.0% 809.5 3.0%
Private Label 872.6 7.9 43.0 365.6 6.1
Kraft 567.7 10.2 28.0 221.9 3.1
Sargento 224.2 0.5 11.1 85.6 -3.3
Crystal Farms 81.2 11.4 4.0 31.0 7.9
Borden 57.4 -6.3 2.8 26.8 -15.4
Kraft Free 31.2 8.3 1.5 11.2 3.8
Kraft Classic Melts 29.3 -12.6 1.4 12.1 -16.0
DiGiorno 23.2 -8.1 1.1 6.5 -12.3
Stella 12.9 7.7 0.6 4.0 1.7
Sorrento 11.0 -31.5 0.5 4.5 -29.3
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending July 10, 2005.
SOURCE: Information Resources Inc.
The trend toward big, bold flavors extends far beyond shreds, of course, into chunk cheese and even reduced-fat varieties. Introduced in the first quarter of 2005, Cabot 50% Light Garlic & Herb Cheddar combines fragrant herbs and a touch of roasted garlic, giving consumers a cheese aimed at punching up the flavor in sandwiches, casseroles and snacks. Cabot has received numerous accolades for the product, which has been cited for its flavor, texture and melting properties. In addition to being recognized as the top-scoring reduced-fat cheddar at the 2004 World Cheese Championships, Cabot 50% Light Garlic & Herb Cheddar also received a Best Cheese award from Health magazine.
 Considering the difficulties inherent in developing a great-tasting reduced-fat product, such recognition was highly prized by Cabot. “Reduced-fat cheeses present some of the biggest challenges for cheese makers because, at the end of the day, fat equals flavor,” Davis says. “When you’re starting out with half as much fat as a regular cheese, you’ve really got the deck stacked against you, and it takes a combination of artistry and chemistry to get it all to come together in something that actually tastes good.”
When it came to developing their newest full-fat flavored cheese offerings, Cabot reached out to the public to give them a hand. From February through April, consumers were encouraged to visit the Cabot Web site and participate in Flavor Vote 2005. There, they were asked to cast their vote for one of three potential new flavored cheddars: Three Mushroom Cheddar, Pesto Cheddar or Caraway Cheddar. The winner — Pesto Cheddar — was introduced at the International Fancy Food Show in New York City this summer. According to Davis, the promotion was all about giving consumers what they want.
“Throughout the cheese industry, manufacturers are listening more closely to consumers in terms of what cheese products they would like to see,” Davis says. “Increasingly, that means involving them more in the early product development stage and incorporating their input into actual product offerings.”
Choice Considerations
Both Davis and Gannon cite an increased interest in natural, rather than processed, cheese slices. “Processed cheese has always been a huge category, but there’s been a steady, significant growth in sliced natural cheeses,” Gannon says. That trend is echoed by Jim Montel, DMI’s vice president of retail channel development. He reports that the overall sliced-cheese business is going strong, but consumers are increasingly choosing natural cheese over processed.
Recognizing this trend, Tillamook bolstered its sliced offerings with the addition of Monterey jack and colby jack. According to Jay Allison, Tillamook national sales manager, the company is actively working with retailers to get 12-ounce packages of natural slices placed alongside processed cheese slices, so consumers will see that they have an option. Given the choice, Allison believes the majority of consumers will opt for natural cheese slices because they don’t contain all the unknowns of processed alternatives. “Consumers wonder just what it is they are really buying when they pick up a processed cheese,” Allison says. “With a natural cheese, it’s just milk and enzymes. That’s all it is, so why not have that?”  
Interestingly, long-time processed cheese maker ADB has rolled out several natural cheese products, including Borden Natural Slices in three varieties: Mild Cheddar, Colby & Monterey Jack and Swiss. Of course, processed singles will always retain their niche, particularly with the younger set. To that end, ADB recently debuted Borden® Kid Builder American Singles. Each individually-wrapped slice is fortified with calcium, as well as six essential vitamins and minerals.
Seeking to give processed cheese makers a greater ability to develop products with the exact characteristics consumers say they want, DMI partnered with the Midwest Dairy Association to sponsor research into a new technique for processed cheese testing.  The resulting process uses a toaster-oven-sized piece of equipment dubbed the rapid visco analyzer (RVA) to test the meltability, sliceability and texture of small batches of processed cheese.
“With processed cheese, manufacturers are trying to make a product with the same functionality each day,” says Lloyd Metzger, Ph.D., director of the DMI-sponsored Minnesota-South Dakota Dairy Foods Research Center, assistant professor in the Department of Food Science and Nutrition at the University of Minnesota and inventor of the technique. “The RVA allows cheese makers to look at a lot of variables and formulation changes in a very short time,” eliminating guesswork and waste.
DMI also continues to focus its efforts on the foodservice industry. The organization leveraged its partnership with Pizza Hut this past year, creating two new menu items — Dippin’ Strips, small cheesy pizza slices designed to be dipped into a variety of sauces; and 3 Cheese Stuffed Pizza, a stuffed-crust pizza that uses a blend of parmesan, mozzarella and cheddar cheeses in the crust edge.
While pizza continues to be very good to the cheese industry, those cheese makers seeking new foodservice sales opportunities for their products better start “thinking outside the pizza box,” says Chris Moore, vice president of foodservice channel development. Speaking at DMI’s Dairy Innovation Forum 2005, held this past February in New Orleans, Moore told attendees that consumer preferences have swung toward healthier food choices and new, bolder flavors.
As a result, some of the demand for traditional pizza has shifted to other segments, such as submarine sandwich shops and quick-casual chains, like Panera and Chipotle. These trends result in increased demand for new types of cheese, cheese blends, or cheese-based foods, presenting opportunities to cheese makers who are willing to innovate, Moore says.
“While pizza sales in food­service continue to hold their own and sustain at modest growth levels, this should be the time for cheese makers to diversify and target other business segments and/or product applications to increase cheese sales,” he explains. “I’m not suggesting we should turn our back on pizza. I’m just saying that dairy needs to look at the new needs of customers and respond with quality and quantity.”  
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