Cheese - Global Annual Review - 2016
Overview
 
●	In 2015, value sales in three out of four top cheese markets grew 
●	Cheese innovation focuses on delivering convenient formats to be incorporated into consumers’ daily routine
●	Private label’s share of innovation continues to grow 

Cheese volume retail sales across major global markets reached 9 million tonnes in 2015, an increase of 0.5% over 2014. Performances at a country level are very mixed. Across the top four cheese markets, volume sales were flat, while China, India and South Korea posted volume growth of 27%, 14% and 9%, respectively. 

Across the top four cheese markets - the US, Germany, Italy and France, which cumulatively account for more than half (52%) of the value sales across the major global markets – challenges remain. Household penetration gains are virtually impossible and consumption per capita is plateauing. 

FIGURE 1: Value and volume sales in top four cheese markets, 2015
  
Source: The Nielsen Company, CNIEL, Ismea, Economist Intelligence Unit, Information Resources, Inc., U. S. Department of Agriculture, International Dairy-Deli-Bakery Association / Mintel

Building value into the category, primarily through innovation, is therefore the only avenue for cheese brands to grow. In 2015, they succeeded in all top four markets but Italy, where value sales are projected to decline -1%. The largest cheese market in the world – the US – is expected to see its value sales grow nearly 4%, while Germany is projected to grow in similar portion, and France just over 1%. 

FIGURE 2: Per capita consumption in top four markets, 2015
 
	kg/capita 	% change 	
	2015 	2014-15 	
US	6.6	-0.7	
Germany	11.7	-0.8	
Italy	12.9	-1.7	
France	12.3	0.4	

Source: The Nielsen Company, CNIEL, Ismea, Economist Intelligence Unit, Information Resources, Inc., U. S. Department of Agriculture, International Dairy-Deli-Bakery Association / Mintel

As brands try to stay relevant to consumers in mature markets, format and usage-driven innovation has remained the priority of innovative brands looking to adapt to consumers’ evolving eating habits. One in six new cheese products launched in 2015 was packaged in a convenient format. Sliced formats accounted for 20% of new launches, an increase of 2.5 percentage points compared to 2014 and of 5 percentage points compared to 2010/2011.

Moreover, in 2015, some very exciting – and successful - new products have brought cheese brands closer to their goal: to become a consumer favourite for every snacking occasion. Indeed, in the US, cheese has made significant inroads in being established as a healthy snack, in particular by “piggybacking” the popularity of nuts. 

FIGURE 3: Top claims in cheese, global, 2015
  
Source: Mintel GNPD

In terms of innovation, Germany, the #2 cheese market in the world, took the lead: in 2015, it accounted for 8% of the cheese products launched, and remains a rich source of inspiration for brands outside of the country. For example, German consumers, known for their appetite for everything natural and environmentally-friendly, are now showing a growing interest for fresh food. Although this presents as many challenges as opportunities for the packaged cheese sector, brands have embraced consumers’ evolving expectations and focused on delivering fresher pre-packed cheese. 

In 2015, private label once again grew its share of innovation to reach 28% (compared to 19% in 2010). In the brand side, global cheese manufacturers – Lactalis, Savencia (Bongrain’s new name), Bel, Arla, Mondelēz, Kraft – have maintained a similar level of innovation compared to 2014.

These global players have all a presence in Asia Pacific where they are trying to benefit from fast growth rates. However, the fastest growing markets are countries where cheese consumption per capita through the retail channel is often limited to a few grams per year.

FIGURE 4: Cheese, global market performance
  
Note: The size of each bubble represents the respective size of the market in volume 

Source: Dairy Australia, Retail World, Economist Intelligence Unit, ABIQ, UN Comtrade, Statistics Canada, The Nielsen Company, ODEPA, CNIEL, BMELV, The Nielsen Company, Office of the Economic Advisor- Ministry of Commerce & Industry, Government of India, Ismea, The Ministry of Agriculture, Forestry and Fisheries of Japan, Infodome, Federal State Statistics Service, DISCOVERY Research Group, GRC, Businesstat, Defra, Information Resources, Inc., U. S. Department of Agriculture, International Dairy-Deli-Bakery Association / Mintel

* Please note: the market size data referenced in this report is current as of January 31, 2016