The Curd's the Word

April 13, 2009
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Private label’s recent strong gains in cheese prove that the term “cheesehead” isn’t limited to Wisconsinites. And that’s no surprise - whether it’s sprinkled over pasta, melted into a pretzel or chip dip, or even cubed and paired with a fine wine or craft beer, cheese is a major part of many cultural dishes and several American comfort foods.

According to data from Chicago-based Information Resources Inc., during the 52 weeks ending Jan. 25, 2009, overall unit sales of natural cheese were down 0.6 percent, but private label unit sales were up 10.6 percent. Overall unit sales of processed cheese saw a 5.0 percent decline, while unit sales rose 5.5 percent.

“What’s changing is the amount of innovation and sophistication in private label cheeses,” says Stan Woodworth, senior vice president of Channel Management for the Wisconsin Milk Marketing Board (WMMB). “As consumers become [savvier] about cheese and marketing, retailers have increased their efforts to make private label products more attractive - and they’re succeeding.”

Even though the economy is terrible right now, cheese is a category in which consumers are not willing to sacrifice quality for price. This offers the chance for retailers of private label cheeses to match or exceed national brand quality - both in terms of product and packaging - and offer a unique product to consumers at a lower price.

Track the Trends

A major trend taking place in cheese is labeling related to “low fat.” While cheese generally is seen as a healthful item, increasing fears related to fat’s link to obesity are forcing cheese manufacturers to respond. According to Steve Fay, executive vice president at Berner Foods Inc., Dakota, Ill., the recession hasn’t changed the primary fact that most specialty-item consumers are older and have more sensitive health concerns.

“The sky is not necessarily falling,” he reminds. “We need to keep in mind that 92 percent of people are still working, still have disposable income and continue to make discretionary spends.”

Fay believes retailers of private label cheeses also should remember that while cheeses such as Brie or Camembert are stereotypic specialty cheese items, smaller category items such as sodium-reduced cheese or other healthier options also fall into specialty territory.

“If I were a retailer considering expansion of my store brand specialty cheese items, I might have [paused] on high-dollar specialty items at least for awhile, but would continue to attack the healthy-option portion of the category,” he says.

Private label cheese also is doing a good job keeping up with national brands by openly advertising the natural aspects consumers seek. According to WMMB, private label products are differentiating themselves from national brands by using words such as “artisan,” “all-natural,” and “sourced from free-range (or pasture-grazed) cows.” Kirsten Jaeckle, marketing manager for Roth Käse USA, Monroe, Wis., believes it is important for a store brand to define itself and communicate that definition to consumers.

“What does your store brand stand for?” she asks. “Is it organic? Is it all-natural? Figure that out, and then make sure that those values apply to the cheese you’re selling under your store brand. Communicate the selling points of your store brand. Then, as an add-on, communicate the unique selling points of the cheese variety.”

Keep 'Em Educated

The key to communicating these selling points to the consumer is education. To sell a product, a retailer’s staff needs to know all about it. Jaeckle encourages teaching them the different varietals of cheese and the regions from which they originate. Borrowing ideas from the coffee and wine businesses, it can be extremely beneficial to do a “cheese talk” - a time set aside for staff members to taste the different store brand  cheeses, discuss the different flavors and nuances, and make pairing suggestions.

Once the staff has collected the information discussed, it can create a program to educate consumers and let them try before they buy.

“One of the key opportunities, I think, for store brand specialty cheeses [is] to create a weekly or daily demo program to help drive sales,” Jaeckle says.

Although simply answering questions is helpful, placing store brand cheese in front of customers - and even pairing the cheese  with wines or other foods - helps retailers communicate a sense of quality. Consumers not only learn which cheese to select, but also keep coming back for the same product or to try something new.

John Angiolillo, sales manager with Icco Cheese Co., Orangeburg, N.Y., concludes with a simple truth: If the product tastes good, the retailer has gained a customer.

“The [retailer] must promote quality,” he says. “I feel that quality is the biggest hurdle for a chain to overcome in trying to gain a new customer or [trial] someone that never uses private label. Too many supermarkets use ‘compare and save.’ Promote the taste and/or package. If a supermarket has a private label item, there must be a reason [to purchase it] other than price.”

Other Side of the Coin

So promoting product quality is a must. But what about consumers who might not have time to stop and taste the cheese? What they see is what’s on the shelf. Therefore, labeling and packaging have to look and function as well as, if not better than, competing national brands.

“There is a saying that ‘No amount of spend on marketing can overcome poor merchandising and packaging,’” Fay points out. “That is true, and I believe the retailer community really has gotten that message.”

Angiolillo points out the redesigned labels for A&P’s America’s Choice Grated Cheese, which has been updated with a vignette photo and modern colors.

“When you compare the new America’s Choice label, it is more attractive than the branded item,” Angiolillo comments.

It also can be beneficial to display the cheese’s region of origin clearly on labeling. Region always has been an important player in cheese sales. Holland is known for its Gouda; France, Brie; England, Stilton; and Italy, Gorgonzola. And Wisconsin and California serve up varieties of cheese that run the gamut from Cheddar and Swiss to artisan creations such as the award-winning Snow White Goat Cheddar (from Sid Cook of Carr Valley Cheese). WMMB promotes a cheese program to private label marketers that features a packaging logo showing a family farm setting with a red barn, green pastures and the words “Wisconsin Cheese.” Woodworth believes retailers of private label products that use this logo will draw consumers.

“Our research tells us that where [cheese] comes from really does matter,” he remarks. “Wisconsin’s reputation as the epicenter for cheesemaking in America is important to the shopper.”

According to WMMB, several retailers already feature this logo on their own cheeses, including Trader Joe’s, Lowes Foods, Piggly Wiggly Alabama, Whole Foods, Food City, Kroger and the Foodland and Shop ‘n Save stores of the Supervalu chain.

Fay adds that retailers such as these need to keep up the good work they’ve done with packaging, especially what they’ve done over the last five years.

"Retailers have come light years in a very short time regarding [store brand] packaging," he says. “I believe Kroger, Safeway, Wal-Mart and others have infused their store brand departments with very smart and very sophisticated individuals who have come over from the brand side.” PLB

SIDEBAR: The Curd's the Word

Monroe, Wis.-based Roth Käse USA, a manufacturer of national brand and private label cheeses, realized that when it comes to gaining customers’ loyalty, teaching those customers is important. And what better place to teach them than in the kitchen?

The company was one of two cheese-makers presented with the Dairy Business Innovation Center’s (DBIC) fourth annual “DBIC Innovation Zone Award” in January for leadership and dedication to growing Wisconsin’s dairy industry.

Roth Käse was honored not only for its award-winning cheeses, but also for being a marketing partner with other Wisconsin companies to increase market share for Wisconsin cheeses. It also was lauded for establishing a world-class visitor center at its headquarters, which it refers to as a “a highly functioning kitchen” specifically for educating and training its customers.

“[The DBIC] was honoring us for not only building something, but then leveraging it as a marketing tool to allow us to educate our customers,” says Kirsten Jaeckle, marketing manager for Roth Käse USA.

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