UK cheese market set to grow as consumer confidence returns

Lactalis UK & Ireland predicts cheese trends for 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[i]. Despite being an everyday essential, the ongoing cost-of-living crisis, inflation and Brexit have unsurprisingly impacted how frequently consumers are buying cheese.

However, 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.

Heloise Le Norcy-Trott, Group Marketing Director for Lactalis UK & Ireland explains: “After two years of contracted volume sales[ii], 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:

When the UK cost of living crisis began in late 2021, the tightening of budgets subsequently led to cost saving behaviour from consumers, including many switching to own label products. While the UK is by no means out of the woods, there’s reason to be optimistic for 2024. The Bank of England has predicted inflation will keep falling in 2024[iii], and GFK’s long running consumer confidence index now measures at -30 for October 23, up from -47 last year. As a result, we expect 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[iv]. 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[v]. Unlike some plant-based proteins, cheese contains all of the nine essential amino acids (the building blocks of protein) that our bodies need. Protein is vital for many different functions in the body including building and maintaining muscle and supporting healthy bones but also for helping to make other body tissues and organs, the antibodies in our immune system and haemoglobin, an important protein that carries oxygen in our blood (British Nutrition Foundation 2023).

  • 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. Recent research shows 2 in 5 (40 per cent) of us plan to go out less often[1], and three fifths (61 per cent) are spending more cautiously[2], but we still want affordable indulgence, when we treat ourselves or entertain at home. Speciality cheeses and hot eating cheese options offer retailers an additional way to tap into the ‘big night in’ occasion.

  • 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.[vi]

  • 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 our 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[vii], 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. The latest addition to Lactalis UK & Ireland’s grated offering, Leerdammer Grated in 160g resealable pouches is an authentic Dutch cheese that is finely grated for perfect melting, offering an alternative to cheddar in recipes, with a unique flavour.

  • 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. In addition to the growing range of recipes available online, TikTok and other social media will increasingly impact people’s cheese tastes and usage.

With the demand for affordable indulgence driving the category, we can expect a blurring of the distinction between speciality, every day, and recipe cheese, and cheese lovers ‘mixing it up’ with treats like brie on toast. While it’s unlikely British consumers will forsake cheddar as the nation’s favourite cheese, they will increasingly want to widen their cheese repertoire, and products like Lactalis’s Leerdammer slices, the number #1 cheese slices brand in the UK in value sales,[viii] will encourage them to think ‘beyond the block.’

“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.”

[1] CGA New industry Report, 2023

[2] Attest, Top Consumer Trends of 2023, Jan 2023

[i] https://www.dairyuk.org/the-uk-dairy-industry/

[ii] Circana Unify+

[iii] Bank of England. (2023, September 21st). When will inflation in the UK come down?. Retrieved from https://www.bankofengland.co.uk/explainers/will-inflation-in-the-uk-keep-rising

[iv] The Waitrose Food and Drink Report 2023

[v] Dairy UK

[vi] 52w/e 17th of July 2021

[vii] 52we YoY (2nd Dec 23)

[viii] *Source: IRI 52 weeks Value Sales w/e 10th September 2023

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