REPORT

By: Kathleen Furore

Remember when a grilled cheese sandwich meant American cheese layered between two slices of buttered white bread, then grilled until brown?

 

Not anymore! Today, cheese aficionados can savor varieties that were unthought of just a few years ago.

Consider the $9 grilled cheese sandwich loaded with layers of havarti and Muenster, slow-roasted kalua pork, and signature BBQ sauce at Porky's Kauai in Waimea, Hawaii—a sandwich that took the top spot on MONEY

It’s all a sign that cheese remains a customer favorite, even in the face of a downturn in dairy, industry data show.

 

“Although there is an increasing trend in the U.S. toward reducing dairy consumption, it has not affected the cheese market, as overall cheese sales have continued to experience stable growth, increasing 10.7 percent in value at a CAGR of 2.6 percent over the last five years, and 3.7 percent in volume at a CAGR of 0.9 percent during the same period,” says the August 2018 “Sector Trend Analysis—Cheese Trends in the United States and Canada,” prepared by the Government of Canada/Agriculture and Agri-Food Canada (agr.gc.ca).

 

Savvy manufacturers are taking note and have stepped up to capture market share: 697 cheese products were launched in the U.S. in 2017 alone, more than half of which were hard cheeses and semi-hard cheeses, the report reveals.

Porky's Kauai sandwich. Courtesy of Porky's

An Update on Trends Impacting the Category

magazine’s recent list Top 10 grilled cheese sandwiches, compiled in partnership with Yelp.

 

There’s also the $10.41 Grilled Cheese at Waffle Love in Northridge, California—a savory combination of muenster and provolone cheese sandwiched between two crispy croissant waffles spread with garlic butter and served with a side of tomato bisque.

 

And don’t forget the $70 (that’s right, $70!) white truffle grilled cheese at The Water Tower nightclub in Brooklyn New York’s Williamsburg Hotel that’s made with fontina, comte, smoked gouda, and white alba truffles—all on Brooklyn Bread Lab brioche.

Data from the “2018 State of the Industry Report” from Dairy Foods magazine (dairyfoods.com) echoes those findings. While processed cheese “continued to fumble at retail …the natural cheese category is still gaining yardage," that report says.

And there’s good news for cheese manufacturers on the horizon, too.

Instead, they are fine-tuning their tastes, and turning toward unprocessed, natural cheese—particularly packaged and premium varieties, “Cheese Trends in the United States and Canada” reports.

“The unprocessed cheese category is mainly dominated by cheddar, with 31 percent value market share in 2017, and mozzarella, with 19 percent value market share,” the report notes.

“Cheese’s future—on both the retail side and the even larger foodservice side—remains bright,” Dairy Foods predicts. “According to a June 2018 report from Allied Market Research, Portland, Ore., the overall U.S. cheese market was valued at $32.3 billion in 2017 and is projected to reach $40.5 billion by 2025.”

A Preference for Unprocessed

While it is true that some cheese is falling out of favor (American Cheese, the darling of the Baby Boom generation, is one example), today’s culinary crowd isn’t losing interest in the category altogether.

For cheese manufacturers interested in developing products to appeal to today’s food-savvy consumers, understanding trends is key.

 

When it comes to cheese, the Dairy Foods’ report sums it up this way: “Convenient offerings, adventurous flavors and natural positioning should keep cheese on top of its game.”

 

°Convenience. This trend goes hand-in-hand with consumers’ newfound penchant for snacking throughout the day. According to the 2018 "Snacking Survey" from Information Resources, Inc. (IRI), the Rfg Meat/Cheese/Cracker/Dessert Snack category was up 45 percent for the week ending 12/31/17.

 

°Flavors. Dairi Concepts (dairiconcepts.com), an international provider of innovative dairy-based ingredient solutions, says ‘hot’ is hot in the cheese category. “The craving for hot and spicy cheese is moving beyond jalapeño…and cheesemakers aren’t stopping at habanero,” the company reports. Think cheddar cheese spiced with cayenne and chile, or cheeses enriched with Bhut jolokia, commonly known as ghost pepper. “For food producers, the challenge will be blending fire with flavor. Ingredient partners will truly be forging new profiles,” the company predicts.

The popularity of ethnic cuisines is impacting the flavor scene, too. “New international herb notes are also adding zest to cheese, including Middle Eastern spice mixes like za’atar,” information from Dairi Concepts says. “For ingredient producers, the adventure of international flavors expands the opportunity for unique cheese flavored products."

In fact, Cary Frye, senior vice president of regulatory affairs for the Washington, D.C.-based International Dairy Foods Association, told Dairy Foods that she’s been “fielding a lot more compliance-related questions from processors in reference to flavored cheeses and cheeses with spices or herbs.”

Staying Atop Trends

°Natural. According to Dairy Foods, natural cheese continues to dominate in the cheese category, with natural cheese slices enjoying a 2.1 percent dollar sales increase to $2.2 billion, and a unit sales increase of 1.8 percent to $692.9 million.

 

Jim Dimataris, director of processor relations for the Tracy, Calif.-based California Milk Advisory Board, told Dairy Foods that retailers are looking for cheeses that communicate the position of “great taste and nutrition” on the natural cheese side.

The Sandwich Connection

When it comes to cheese consumption, sandwiches, of course, play a pivotal role.

 

According to the “2018 Sandwich Consumer Trend Report” from Chicago-based Technomic, Inc., sandwiches remain a staple in consumer diets, with 61 percent saying they eat them at least once a week.

 

Considering 60 percent of those sandwiches are prepared at home, and 40 percent are purchased away from home, there is ample opportunity to use cheese in both the retail and foodservice segments.

 

Among cheese trends to watch for, according to Technomic: smoked gouda and manchego on breakfast sandwiches, and for lunch and dinner sandwiches, gruyere (in the growth stage), muenster and ricotta (at the introductory stage, with expected growth ahead).

Creativity is in full swing on the cheese front these days, as evidenced by the winning entries in two contests presented by Wisconsin Cheese (wisconsincheese.com).

*The Grilled Cheese Academy’s Grilled Cheese Recipe Showdown (grilledcheeseacademy.com).

The Green Lobster, which features a blend of Wisconsin butterkäse and fontina cheese, rich lobster and vibrant chimichurri sauce, took home top honors.

 

Other winning recipes included the The Captain's Classic made with aged cheddar on Texas toast that’s been coated with crushed Peanut Butter Cap’n Crunch cereal, and The Nduja Melt made with and Muenster cheeses plus the spicy, spreadable pork salumi called nduja, all on a French baguette.

*The Burger Society’s Gridiron Grill Down Tailgating Sweepstakes (cheeseandburger.com).

The top three burgers, in order of appearance, were The Casanova Burger, a beef patty piled high with Wisconsin Swiss cheese, ham, sautéed mushrooms, Dijon mustard and mayonnaise on a potato roll; The Rhinelander, a beef patty layered with Wisconsin Butterkäse, beer mustard, smoked ham, sautéed onions and frisée lettuce on a pretzel bun; and the Uncle Sam, two beef patties plus Wisconsin cheddar, iceberg lettuce, tomatoes, bacon, mayonnaise, ketchup and sliced red onions on a burger bun.

Contests Showcase Creative Cheese Recipes

The Green Lobster

The Captain's Classic

The Nduja

The Casanova Burger

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