UK cheese market set to thrive: next twelve months brings exciting opportunities for growth and development

Lactalis UK & Ireland is forecasting a year of recovery, premiumisation, and innovation in the cheese category.

According to the dairy company, with consumer confidence beginning to rise, monetary policy having its desired effect, and shoppers increasingly seeking out versatile and convenient food products, there’s plenty to be optimistic about in 2024 and beyond.

Cheese offers consumers taste, nutrition, versatility, convenience, and good value, which is why it’s found in 94% of fridges in the UK (source: CGA New industry Report, 2023). Despite being an everyday essential, the ongoing cost-of-living crisis, inflation and Brexit have unsurprisingly impacted how frequently consumers are buying cheese.

Heloise Le Norcy-Trott, group marketing director for Lactalis UK & Ireland explains: “After two years of contracted volume sales (source: Attest, Top Consumer Trends of 2023, Jan 2023), the cheese market has an opportunity to regain momentum. Looking forward to 2024 and beyond, these are the cheese trends we think retailers should be aware of.”

  • Recovery of branded cheese: Lactalis expects a recovery in market share for branded cheese as pressures on shopper spending ease, especially with cheese types where quality and taste are emphasised, such as continental. As part of this recovery, embracing innovation to drive excitement back into the category will be paramount. Whether it be alternative flavours or growing categories like hot eating cheese, new product development allows brands to differentiate themselves by offering something different.
  • Premiumisation driving growth: even though grocery prices are increasing, and consumers have been choosing to buy fewer units of cheese, premiumisation still has the potential to drive market growth. This is likely to come from a combination of new and old consumer habits – exploring new ways of enjoying cheese, like enjoying hot and using it in different recipes, and rediscovering varieties they previously enjoyed. With cheese being a household staple, it’s important that the industry and retailers continue to adapt, expand, and innovate their offering in the coming months, to cater to changing consumer demands as shoppers get back into cheese.
  • Cheese as a source of protein: there is a growing interest in how what we eat and drink affects our bodies – with more than half of consumers reading product labels more than last year (source: Dairy UK). Therefore, one trend to look out for is consumers seeking out cheese for its nutritional benefits. For example, cheese is packed full of essential dairy nutrients, such as protein, with it providing 15% of our daily requirement.
  • Everyday pleasures and special occasions: as confidence returns, shoppers are likely to be open to spending more on cheese as an affordable indulgence. That’s not just in the run up to Christmas, as seen in the last two years, but all year round, enjoying premium, hot eating, blue, and selection packs, as well as hard and soft specialty cheeses, as treats for ‘me’ moments and celebrations with family and friends. Cost pressures are resulting in consumers having more ‘big nights in’, which are often major cheese eating occasions.
  • Growth in hot eating cheese: hot eating is currently one of the highest grossing cheese categories, offering quick and tasty hot meal-time solutions, and another area where retailers can encourage premiumisation. Président A La Carte Crispy Bakes with Brie and our new Seriously Cheese Burgers, which launched in July, are the fastest growing and top contributing brands to category value and volume growth (52we YoY (2nd Dec 23)).
  • Increased use of cheese as a meat alternative: cheese is a major recipe ingredient in many popular meat-free dishes, while hot eating cheese products provide consumers with a tasty vegetarian meat replacement they can enjoy at any time – while also appealing to consumers trying to reduce their meat intake, as an alternative to meat protein. Health is a growing consideration for many, and Lactalis’ recently launched Seriously Cheese Burgers represent a new sub-category within the hot eating fixture, which previously focused on indulgent products like baking camembert and fondue.
  • More convenient formats providing cooking and recipe inspiration: time-poor consumers are likely to be drawn to cooking with cheese using timesaving options such as grated and sliced formats, which have seen sales rising as work patterns normalise. Sliced and grated – the UK’s second biggest cheese subcategory after block cheddar – increased +16% and fell just -0.5% in volume, in line with the overall cheese trend. Grated cheddar has seen a proportionately larger rise than block cheddar in volume bought per trip, likely due to its comparatively lower rise in average price, but also its convenience for busy shoppers.
  • Greater personalisation: new consumers coming into the market are likely to seek ways to express their individuality and personalise how they use cheese, based on imagination and personal preferences. As these shoppers recognise the recipe potential for cheese and the varieties that are available, we can expect greater creativity in its use in planned dishes, and making use of leftover cheese.

Lactalis expects a blurring of the distinction between speciality, every day, and recipe cheese, it sees cheese lovers ‘mixing it up’ with treats like brie on toast.

While Lactalis believes it unlikely British consumers will forsake cheddar as the nation’s favourite cheese, they will increasingly want to widen their cheese repertoire, and products.

“As these insights and predictions indicate, the next twelve months present a significant opportunity for everyone involved to develop the UK cheese market,” says Heloise Le Norcy-Trott, group marketing director for Lactalis UK & Ireland. “As a leading player here and around the world, we have built our position by monitoring trends and anticipating demand with our product ranges, and we will continue to do so, for the benefit of our consumers and customers alike.”

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