Research and Markets: Higher Per Capita Consumption and Higher Prices

cream cheese, raw milk, cottage cheese

Research and Markets: Higher Per Capita Consumption and Higher Prices for Raw Milk Leading to Increasing Prices in US Cheese Market

This report reviews the U.S. cheese market, including natural and imitation cheeses sold in FDM channels and natural food channels. Cheese sales in the U.S. climbed to $11.9 billion in 2004, a 10.2% increase compared to 2002 figures of $10.8 billion. This represents a steady growth as overall sales are up 24% in current prices since 1999, and 9% in constant prices. Main reasons for the increase are two-fold: higher per capita consumption, and more recently, higher prices for raw milk, which manufacturers often pass to consumers.

USDA data reveals that over 30% of the world's cheese is made in the United States. Total U.S. cheese volume consumption in 2004 (excluding cottage cheese) reached 8.8 billion pounds, a 6.0% increase compared with 8.3 billion pounds in 2001 and a 47% increase compared to 6 billion pounds in 1990. About 39% of all cheese is sold at the retail level, while 18% of cheese sales are for food processing. Foodservice accounts for about 43% of total cheese sales.

The three key factors influencing cheese consumption patterns are convenience, health and flavor. In order to save time, convenience-driven products like precut cheeses-sliced, cubed, diced, shredded, string--reign in popularity across all segments of the population. The low carb diets that enamoured millions of consumers redefined cheese as a healthful, high-protein snack and meal base, which also fueled sales in the past two years

. As evidence, the Laughing Cow brand of cheese, which was mentioned by name in the South Beach plan, sold 50% more product in 2003 than in 2002, and 93.5% more between 2003 and 2004.

The American palate is increasingly sophisticated and previously rare cheeses are becoming more mainstream. Fast food outlets like Subway are offering consumers Asiago cheese, while Wendy's includes feta on the menu. Future growth in the cheese market will be recognized by companies who know what consumers demand in terms of flavor and convenience.

This report covers the main categories of cheese, including whole and shredded natural cheese; American and other processed cheese; cream cheese; ricotta cheese; cottage cheese; aerosol or squeezeable cheese; and refrigerated and shelf-stable grated cheese. The topics covered are mostly dairy cheese, but include, where possible, other types such as goat cheese. Imitation cheese is also included as part of the processed cheese segment.