|Title:||United Kingdom top 10 cheese brands ranked by sales in pounds sterling and percent change for year ending October 1, 2011|
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TOP XX CHEESE BRANDS
Cheese: XXw/e XXctober 2011
SALES CHANGE [pounds sterling] m y-o-y %
Cathedral City XXX.X X.X Dairylea XXX.X X.X Philadelphia XX.X XX.X Seriously XX.X -X.X Cheestrings XX.X X.X Pilgrims Choice XX.X -X.X Wyke Farms XX.X XX.X Baby Bel XX.X X.X Lake Distict XX.X XX.X Laughing Cow XX.X X.X
The shifting dynamic between branded and own label has been one of the major talking points in cheese. Although the overall picture shows branded cheese gaining a marginal X.X% share of sales over own label [Kantar XXw/e X September 2011], giving it XX.X% of the market to own label's XX.X%, clear victors have emerged in the individual sub-categories.
Having seen its market share steadily eroded by brands over the past decade, own-label Cheddar is showing signs of bouncing back. Value sales have grown X% compared with X.X% for branded, while in volume, sales are up X.X% in own label compared with a X.X% decline in branded Cheddars.
In processed cheese, however, the reverse was true as branded sales leapt X.X% compared with a X.X% decline in sales of own-label processed cheese. Branded also stole a march over own label in soft white cheese and blue cheese, although own label strengthened its dominant share of the Continental cheese category. Neither brands nor own-label products, meanwhile, could arrest the ongoing decline in sales of territorial cheeses, which fell for the third consecutive year.
So is own label set to dominate the category in the long term - or are the brands already staging a comeback?
There is no question that while total Cheddar sales growth is healthy at X.X%, there has been a notable shift in the branded versus own-label dynamic, with several retailers clearing out brands to make way for new own-label ranges. Waitrose was the first to act in March when it undertook a major layout review, stripping out duplicate brands and introducing new mid-tier and upper mid-tier own-label products to create a stronger point of difference. Sainsbury's has since axed the Wyke Farms and Collier's Powerful Cheddar brands as part of its latest range review, while Morrisons recently removed Pilgrims Choice and Tickler from its pre-pack Cheddar fixture in order to boost its own-label offering with four new "award-winning" Cheddars.
The branded cull has been in the offing for some time as retailers tire of brands they see as adding little or no value to the category. As Bryan Burger, Morrisons' category director for dairy, warned prior to the supermarket's autumn range review: "There are quite a few me-too branded Cheddars on the shelf. We haven't got elastic shelves and you really have to have a point of difference."
With all the major retailers pursuing brand match policies, the emphasis as far as creating a point of difference goes is inevitably switching to premium own-label Cheddars. "Price isn't really a competitive advantage any more on brands because everyone's matching each other, so by default the only way you're going to have a point of difference has to be with your own label," says Richard Hollingdale, First Milk commercial director.
With many Cheddar brands adopting a high:low pricing strategy, whereby a large majority of their Cheddar is purchased on promotion, own label, especially mid and upper-tier, can offer a consistently affordable price point for consumers who don't want to compromise quality.
"If you want a product you like at a price you can afford to pay week-in week-out, then own label is the only product that can give you that, because one week your favourite brand might be on promotion and the next week the headline figure is too high," says Carl Ravenhall, MD of Milk Link's cheese business.
Even retailers that haven't culled brands are reporting strong growth in own label. Asda's cheese buyer Alex Bradbury reports a resurgence in mid-tier Chosen By You Cheddar and XX% growth in its premium Extra Special range, produced for Asda by Wyke Farms.
Some brands have managed to pull back from the promotional free-for-all and still grow sales. Wyke Farms' sales increased XX.X% to [pounds sterling]XX.Xm [Nielsen XXw/e X October 2011], despite a significant reduction in promotional activity.
"There are people in our category who think a brand is nothing more than a promotional vehicle, so what we've tried to do is back away from the promotions, spend a bit more on marketing campaigns and really articulate to those shoppers what the Wyke Farms brand is about," says MD Rich Clothier.
Others have promoted heavily to good effect. Sales of First Milk's Lake District Cheese Co brand grew by XX% in value and XX% in volume, thanks in part to a doubling in the brand's level of promotional activity [Nielsen]. Lake District's growth came partly at the expense of rivals Seriously and Pilgrims Choice, both of which have pulled back from promotional activity in the past year and subsequently seen sales fall backwards. Market leader Cathedral City, meanwhile, had a steady year with sales creeping up by [pounds sterling]X.Xm (X.X%) to [pounds sterling]XXX.Xm [Nielsen].
The line between branded and own-label Cheddar is set to become increasingly blurred after Tesco introduced venture brand Mu to the fixture. Produced by Adams Foods, the brand sits in the space between standard own-label and branded Cheddar and is designed to appeal to young families. "The key insight was that, in a fairly commoditised market we have to disrupt the fixture - hence the quirky brand name and the very different style of pack design," says marketing director Alastair Jackson.
Mu will not adopt the high:low price strategy adopted by other Cheddar brands and will instead aim to maintain a consistent, affordable price, says Jackson. "When you've got XX% to XX% of your branded sales on deal, when you come off deal your volumes are much lower. What we're trying to do with Mu is to bring to the market that little bit more premium, added-value offer, but not on a bogof or a half-price strategy, so people can buy it at an everyday low price."
The promotional excesses in Cheddar are arguably having a detrimental effect on other cheese sub-categories, most notably territorials, volume sales of which have fallen X.X% in the past year.
Cheddar accounts for more than half of all cheese purchased and Clothier believes the impact of branded Cheddars being promoted so readily on gondola ends is being felt beyond the Cheddar fixture.
"Not only are the gondola end promotions devaluing Cheddar, but they're also devaluing the category because we're missing the opportunity to sell the consumer other cheeses," he points out. "When consumers just push the trolley down the promotional aisle, chuck their cheap Cheddar in and move on, we've missed the chance to sell them impulse products."
Adams Foods attempted to bring a strong, branded presence to the territorials fixture in February with the launch of three new products: Red Leicester, Wensleydale and Double Gloucester under the Pilgrims Choice brand, but Jackson admits the range hasn't performed as well as hoped.
Territorials specialist Joseph Heler has also tried to inject some life into the territorials sub-category with the May launch of a XX% reduced-fat Red Lesster and Double Glowcester (see PXX). "What we're doing is adding a point of difference, a little bit more interest in the category; saying, look, Cheddar can do that but we can do also this with our territorials," says MD Mike Heler.
Two sub-categories that have had no such problems in piquing consumer interest are processed and soft white cheese, sales of which have risen X.X% and X.X% in value respectively. In both sub-categories, brands have grown well ahead of own label - a result of strong marketing and innovation within the category.
In May, Bel UK ran a major marketing campaign called Pull The Udder One as part of a relaunch of its The Laughing Cow brand. "We're engaging with consumers on a scale not previously seen by the brand, ensuring that The Laughing Cow is front of consumers' minds in-store," says Richard Parry, insights manager at Bel UK.
Innovation has also played its part in stimulating growth. The kids cheese market was shaken up over the summer by the launch of Cathedral City's Chedds and First Milk's Dairy Maniacs products, both of which aim to bring natural Cheddar to a market dominated by processed cheeses.
The soft white cheese market, meanwhile, has been boosted by strong recent communications around the benefits of using soft cheeses as cooking ingredients. Philadelphia sales grew XX.X% on the back of a successful marketing campaign aimed at encouraging consumers to cook with Philly (see PPXX-XX).
"Its consistent growth suggests that more and more people are using Philly in the kitchen, and it's something we hope will continue as we continue to invest in the brand," says Bruce Newman, cheese and dairy marketing manager at Kraft Foods UK and Ireland.
Both the processed and soft cheese sub-categories have shown what is possible when cheese brands succeed in adding value to their products through strong innovation and marketing. It's a lesson that price-obsessed Cheddar brands could do well to heed if they wish to snuff out the own-label revival.
Data compiled for the Grocer magazine by The Nielsen Company. The data is sourced using Nielsen's Scantrack service, which monitors weekly sale data from a nationwide network of EPoS checkout scanners. For more information contact Danielle Tolson: XXXXXXXXX XXX
Thetake-homesnapshot isproduced by KantarWorldpanel. Kantar Worldpanel monitorsthe grocery retailer take-home purchasinghabits of XX,XXX emographically epresentative British house holds. Call XXX XXXXXXXX Dr visitkantarworldpanel.com for details.
* The valueol the cheese market is up X% to [pounds sterling]X Xbn.
* Growth has mainly been driven by a X,X% price rise, but this has not deterred shoppers from buying slightly more and more often. Trip vo lumes are up X.X% and frequency by X%, driven by growth inthe number of volume-based promotions.
* Cheddar, at XX% of the market value, is growing at a similar rate to the total market, but processed, Continental and soft white are all growing ahead of the market. Continental's growth is despite a fall in shopper numbers.
* The convenience cheese sector continues to grow, with both slicedand grated growing market value share despite alt racting few new buyers inthe past year. Block cheesecl aims the highest value shareofthe market, but its growth is fairly static.
MU CHEDDAR ADAMS FOODS
LAUNCHED: OCTOBER 2011
Tesco has moved its venture brands strategy into the cheese category with the launch of Mu Cheddar. The six-strong range is produced by Adams Foods, which owns the trademark, and carries a front-of-pack flash saying 'Product of the UK and Ireland'. It comprises XXXg blocks of mild, medium, mature and lighter mature variants. "Mu is targeted towards a younger, family audience who want to buy a Cheddar for everyday use," says Adams Foods marketing director Alastair Jackson. Rsp from [pounds sterling]X.XX.