It used to be that a grilled cheese sandwich called for American cheese. And a party demanded a processed cheese ball.

But these days, that grilled cheese sandwich increasingly is based on fontina or another fast-melting natural cheese. And that party more often begs for a cheese plate of assorted natural cheeses.

It’s no wonder, then, that U.S. retail sales of processed cheese continue to decline, while those of natural cheese remain in growth mode. According to data from Chicago-based market research firm IRI, the retail processed cheese category saw dollar sales slip 1.5% to $2,803.6 million during the 52 weeks ending Jan. 26, 2020. Unit sales fell 3.0% to 717.0 million.

Natural cheese dollar sales, meanwhile, rose 2.1% to $13,294.9 million. Unit sales climbed 1.1% to 3,990.7 million.

Aerosol/squeezable spreads a bright spot

One processed cheese subcategory defying the downward trend was aerosol/squeezable cheese spreads. The segment posted a 1.8% increase in dollar sales (to $96.1 million) and a 3.9% gain in unit sales (to 26.4 million).

But other segments didn’t fare as well. For example, processed/imitation cheese slices — the largest processed cheese subcategory — saw dollar sales decline by 2.5% to $1,573.9 million and unit sales drop by 3.6% to 455.1 million.

All but four of the top 10 brands lost ground here, with Land O Lakes (Land O’Lakes Inc.) taking the biggest fall. Dollar sales for the brand declined 20.1%, while unit sales took a 16.2% dive.

On the flip side, Daiya (Daiya Foods Inc.), a plant-based brand, saw dollar sales jump 36.5% and unit sales skyrocket 38.6%.

The second-largest processed cheese subcategory, cheese balls/spreads, also realized sales declines. Dollar and unit sales tumbled 2.1% (to $492.0 million) and 4.1% (to 116.2 million), respectively.

The biggest loser here was private label, posting dollar and unit sales decreases of 25.2% and 17.1%, respectively. The biggest winner, meanwhile, was Président Pub (Groupe Lactalis), which saw dollar sales rise 5.0% and unit sales increase 4.9%.

Cheese cubes take off

On the natural cheese front, one of the smallest natural cheese subcategories, natural cheese cubes, experienced the most growth. Dollar sales rose 18.7% to $148.1 million, while unit sales grew 30.2% to 40.9 million.

The smallish Wisconsin Cheese Company brand (by the company with the same name) was the growth leader among the top 10 brands. Its dollar sales shot up 117.4%, while its unit sales jumped 111.6%. Three other brands among the top 10 — private label, Ellsworth (Ellsworth Cooperative Creamery) and all Laack Brothers Cheese Co. brands — posted double-digit dollar sales growth.

The largest natural cheese subcategory, natural shredded cheese, fared very well, too. Its dollar sales climbed 3.7% to $4,964.9 million, while its unit sales rose 2.7% to 1,622.0 million.

Leading the top 10 brands in growth was Tillamook (Tillamook County Creamery Association), which posted a 32.6% dollar sales gain and 35.1% unit sales increase. Cabot (Cabot Creamery Cooperative) also realized impressive growth — 14.5% and 12.5% dollar and unit sales gains, respectively.

But a few natural shredded cheese brands struggled. Sargento (Sargento Foods Inc.) saw dollar and unit sales slip by 8.8% and 8.9%, respectively. And Kraft’s dollar and unit sales were down 7.3% and 9.3%, respectively.