Dairy Product Trends - Cheese

Bucking the trend of declining fluid milk consumption, cheese consumption in the United States continues to increase.  As of 2018, on a per capita basis, people in the U.S. were eating a little more than 38 pounds of cheese per person – more than double the amount eaten in 2008 (Figure 1).

Figure 1. Per Capita Consumption, Total Natural Cheese

Cheese can be categorized as either natural or processed.  It is the natural cheese category experiencing the growth.  Breaking down the category of natural cheese by cheese variety (Figure 2) shows growth in consumption in almost all varieties.  American (other than cheddar), Muenster, and Hispanic cheese varieties have all seen growth exceed 40% from 2008 to 2018.  Only Swiss cheese consumption has experienced a decline in consumption, and a minor one at that at one percent.

Figure 2. Per Capita Consumption, by Cheese Variety

As expected, with increases in consumption, there is also a corresponding increase in cheese production.  At the national level (Figure 3), cheese production has increased by more than 4.7 billion pounds from 2000 to 2018, an increase of 57.7%.  The three Northeast states with the most cheese production, Pennsylvania, New York, and Vermont, also all experienced growth in cheese production over the past 18 years.  Figure 4 shows Pennsylvania cheese production growth in greater detail.

Figure 3. Cheese Production, U.S. Total and Select States

Figure 4. Pennsylvania Cheese Production

Raw milk cheese manufacture, a subset of all cheese manufacture which includes cheese made from pasteurized milk, appears to be fairly steady in Pennsylvania – as of 2019 – based on the number of permitted operations (Table 1).

Data: PA Dept. of Agriculture

Cheese, of some variety and form, is consumed by almost everyone in the U.S. (Mintel, 2019). Consumers view cheese as a natural source of calcium and protein that is a perfect fit with the continuing growth of the so-called snacking lifestyle.  Seventy percent of consumers snack at least twice a day, with 17% being categorized as "super-snackers," those who snack more than four times daily (Mintel, Snacking Motivations and Attitudes – US, 2019).   While any format that cheese is sold in (slices, blocks, wedges, etc.) can have snack sized portions taken from, 20-37% of consumers are eating cheese in a more snack-like format such as string, cubes, snack portions, and in snack combo packs (e.g. Meat and/or nuts and cheese).  

Cheese is commonly thought of as being made from cow's milk, however the milk from many animals can be used to make cheese.  Consumer surveys from 2018 and 2019 indicate that consumers have increased the frequency of consumption for goat and sheep's milk cheese.   Of those who ate these types of cheese in the 3 months prior to the survey, in 2018 18% ate goat/sheep's milk cheese multiple times per week.  This increased to 24% in 2019 (Mintel).   As consumers are becoming more familiar with dairy products from other dairy animals, or are looking for new eating experiences, we see consumption is increasing.  Marketing tactics, such as sampling, can assist with growth the purchase and consumption of non-cow's milk cheeses.  70% of consumers surveyed in 2016 wanted to sample cheese before purchasing and 77% of consumers surveyed in 2011 said they were more tempted to try a new variety of cheese when offered a sample (Mintel).

Farmstead and artisan cheese are segments of the overall natural cheese category with which there is great interest, specifically as a diversification option for dairy farms.  For small-scale cheese processors, understanding consumer trends and preferences for cheese attributes is valuable information for the development of a versatile and responsive business.

A study from Vermont by Wang, Thompson, and Parsons looked at consumer preferences for cheese attributes among consumers in the northeast.   Study participants were able to be grouped in one of two groups – a price sensitive group or a quality seeking group.  Characteristics of the quality seekers included being female, younger, having a smaller household size.  Quality seeking group consumers were also more likely to purchase cheese at Co-ops, specialty cheese shops, farmers' markets, through CSA shares, internet, and at restaurants.  Education and income did not predict which group individuals belonged to.

A study by Colonna, Durham, Meunier-Goddik from Oregon State asked consumers to rank cheese attributes.  Figure 5 illustrates the results.  Consumers ranked local the highest, followed by organic, artisan, sustainable, and farmstead.  The terms organic and artisan were not significantly different from each other, but they were significantly higher ranked than sustainable and farmstead (also not different from each other).  Attributes ranked more highly indicate marketing terminology that small-scale processors may find to be more effective at drawing in consumers.  As for the lower ranking of farmstead than artisan, it could be that consumers either don't understand the term "farmstead" as the researchers propose, how it differs from "artisan," or believe that "artisan" is more an indicator of higher quality than "farmstead."

Figure 5. Ranking of cheese marketing descriptors. Lowest number reflects preference (n = 890). Columns with different letters are significantly different (P < 0.05).

In the previously mentioned study by Wang, Thompson, and Parsons the six cheese attributes studied were artisan, farmstead, local, USDA certified organic, and renewable energy use (for cheese manufacture), and price. In a willingness to pay aspect of the research, the price-sensitive consumer group was determined to be willing to pay 18.2% more for a cheese that was designated artisan, farmstead, locally produced, USDA-certified organic, and produced using renewable energy than for cheese with no additional attributes.  This translated to paying $9.46/lb vs. $8/lb.  On the other hand, it was determined that the quality seeking consumer group was willing to pay 97.3% more for a cheese with all the attributes, translating to $15.78/lb vs. $8/lb. 

Figure 6 shows the estimated willingness to pay premium for each individual attribute for both consumer groups.  Similar to the Oregon State study, preference for the local attribute was highest for both groups, as determined through their willingness to pay a price premium.  Additionally, while each of the attributes significantly influenced the preferences of the quality seeking group, "localness" and price were the only attributes that significantly influenced preferences across both consumer groups, highlighting the value consumers place on local food.

Figure 6. Estimated premium of WTP for selected cheese attributes

One decision made when starting a small-scale cheese processing business is whether to manufacture from raw milk or pasteurized milk.  Beyond the product options and characteristics associated with this decision, there should be an understanding of consumer preferences for raw and pasteurized cheese products.  The study by Colonna, Durham, and Meunier-Goddik found that a higher percentage of consumers preferred raw milk cheese when it was labeled as such, perhaps indicating a bias toward this attribute. 

Researchers also asked consumers to choose phrases from a provided list to indicate characteristics and perceptions they had of both raw and pasteurized cheese.  Table 2 lists the top five characteristics stated for pasteurized and raw milk cheese.

Table 2. Top Five Characteristics of Raw and Pasteurized Cheese

Pasteurized

• More safe
• Large industrial production
• Less complex flavor profile
• Positive health attributes
• Lower price per pound

Raw

• Small production/farmstead/artisan
• More complex flavor profile
• Less safe
• Higher price per pound
• Higher quality product

While grocery stores dominate as the location where most consumers purchase cheese, less traditional outlets such as farmers' markets and online stores have slowly become more regular purchase locations for consumers.  The percentage of consumers regularly purchasing cheese at farmers' markets increased from three percent (3%) to seven percent (7%) from 2009 to 2018.  Additionally, four percent (4%) of consumers are purchasing from online supermarkets such as Peapod and Amazon Fresh (Mintel, 2018).  From a dollar perspective, it has been reported that ecommerce sales have increased 54% over the past four years (Newhart).  However, the long-term sustainability of these markets as a desired purchase location has yet to be determined as evidenced by the decline from 2014 to 2018 in regular purchasing taking place at farmers' markets (Figure 7) and greater efforts by grocery stores to expand their specialty cheese cases with local cheeses.  

Figure 7. Percentage of consumers regularly purchasing cheese at farmers' markets

The data and trends described above are valuable for small-scale dairy processor strategic business and marketing planning and decision-making.  While differences at the local and regional level may be observed in consumer trends in cheese consumption and preferences for cheese attributes, the trends and preferences outlined above can serve as a starting point for an individual cheesemaker's marketing research.

Resources

Colonna, A., C. Durham, and L. Meunier-Goddik. 2011. J. Dairy Sci. Factors affecting consumers' preferences for and purchasing decisions regarding pasteurized and raw milk specialty cheeses. 94 :5217–5226.

Mintel. 2011. U.S. Cheese. Mintel, Cheese – US, October 2011.

Mintel. 2016. U.S. Cheese. Mintel, Cheese – US, October 2016.

Mintel. 2018. U.S. Cheese. Mintel, Cheese – US, September 2018.

Mintel. 2019. U.S. Cheese. Mintel, Cheese – US, October 2019.

Mintel. 2019.  Snacking Motivations and Attitudes – US, January 2019.

Newhart, Beth. Cheese capacity surges in Europe while online sales grow in the US. DairyReporter.com. Accessed 12/6/2019.

Wang, Q., E. Thompson, and R. Parsons. 2015. Preferences for Farmstead, Artisan, and Other Cheese Attributes: Evidence from a Conjoint Study in the Northeast United States. International Food and Agribusiness Management Review. Volume 18 Issue 2.