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

The good news continues on the cheese front. According to Portland, Ore.-based Allied Market Research, the U.S. cheese market was valued at $32.3 billion in 2017, and is projected to reach $40.5 billion by 2025, growing at a compound annual growth rate of 2.8%.

Cheese has the advantage, you might say, as U.S consumers' love affair with it continues to flourish.

For decades, the story surrounding the cheese segment has been one of very strong growth, both at retail and foodservice. The category's versatility and abundance of varieties have worked in its favor, even as other dairy categories have weathered ups and downs.

Tasty and versatile, cheese has long been a favorite food and ingredient of U.S. consumers. But recent sales data suggest the cheese segment has been struggling a bit, at least at retail. Dollar sales within the retail processed cheese category fell 3.7% to $2.8 billion during the 52 weeks ending Jan. 27, 2019, according to data from Chicago-based market research firm IRI. Unit sales declined by 4.1%.

It's no secret that milk consumption in the United States has been on the decline for decades. In fact, per capita milk consumption decreased by a whopping 98 pounds between 1975 and 2017, according to USDA data.

With processed cheese sales continuing to dive and natural cheese staying stagnant, there are few bright spots in the retail cheese category.

Although its growth at retail has slowed down in recent years, the natural cheese category is still gaining yardage. Dollar sales in the total category rose 1% to $12.9 billion during the 52 weeks ending Aug. 12, 2018, data from Chicago-based market research firm IRI show. Unit sales increased 1.5%.

Natural cheese sales have been steady for subcategories such as slices and shreds, but others (crumbles, chunks) are struggling. Meanwhile, cheese spreads/balls saw a sales boost in the processed cheese category.