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Cheese snacks offer dairy growth opportunity

06 November 2016

Reinventing cheese as a ‘naturally-healthy’ snack is the biggest growth opportunity for dairy companies, according to a new report from US-based New Nutrition Business. 

The 10 Key Trends in the Business of Dairy Nutrition report found that cheese has had a major boost from scientific research showing that it is one of nature’s ‘naturally functional’ whole foods, with no negatives – either from fat or sodium content. 

One of the most successful products launched in the US, with first year sales hitting $67 million, is Sargento Balanced Breaks, a snack that pairs cheese with fruit and nuts. Its marketing strategy highlights the convenience of a snack as well as cheese’s naturally-nutritious properties.

Consumers appear to be willing to pay a premium price for a cheese snack. Sargento Balanced Breaks retail at a 150% premium to regular mass-market cheese. “For profitable growth, premium niches are the highest-opportunity, least-risk targets in dairy. In almost every case the most effective strategy for profitable dairy growth is to begin by focusing on the low-volume, high-value segments of the market,” said Julian Mellentin, director of New Nutrition Business.

Spire Brands is another company that found a simple solution for a growing consumer need. Its Moon Cheese snack – dried pieces of Gouda, Cheddar, or Pepper Jack in a convenient pack – hit a $10-million run rate in early 2016 with prospects to double annual revenues to about $20 million in 2017.
Cheese has been out of favour for some time due to its high fat content and faulty research linking it to cardiovascular disease. However, new consumer awareness about the health benefits of cheese means there is scope for growth.

Dare to be dairy-free
However, the dairy sector is faced with some new negatives which are fueling the dairy-free trend. “Non-dairy dairy is both an opportunity and a threat. Dairy companies must take note of the trend and know how to respond to it – which in many cases means entering the market,” said report co-author Joana Maricato, senior market analyst at New Nutrition Business. 

Danone has turned non-dairy into an opportunity by acquiring WhiteWave, becoming both one of the world’s biggest dairy companies and the world’s biggest non-dairy company.

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