May 3, 2024 – The cheese market is evolving. Long rows of cheddar, Swiss, provolone, and brie can still be seen displayed in dedicated counters at US grocery stores, and the iconic Kraft Singles are still on shelves. However, non-dairy cheese is small but growing, with more consumers than ever looking for plant-based replacements for their favorite styles of cheese. Our research looks into the current US cheese market trends, demonstrating vital information about market size, consumer attitudes, brand activity, and new product launches.
US Cheese Market Size
The US cheese market dominates in sales, with the next largest country, Germany, holding less than half the market size. Additionally, US cheese sales are expected to continue growing into the future. Both sales and product development have increased within the past five years, and don’t show signs of slowing down. Amidst a slower start in its infancy, dairy-free cheese sales are increasing faster than dairy cheese. However, the overall market size for non-dairy cheese is unsurprisingly far less than dairy cheese.
US per capita cheese consumption ranks 20th compared to other countries globally, with Greece far and away the top spot. Natural cheese – i.e. not processed and not non-dairy – is responsible for over three quarters of per capita cheese consumption. Non-dairy cheese remains a small fraction of per capita consumption.
Companies and Brands
Private labels account for a substantial amount of cheese sales in the US cheese market. Kraft Heinz and Sargento follow as the largest two brands in cheese sales outside of private label. The most active launchers of new products are Ahold Delhaize, Kraft Heinz, and Kroger for dairy cheese, and Otsuka, Miyokos Creamery, and Good Planet Foods for non-dairy cheese.
Kraft Heinz is of note as the only non-private label or retailer in the top three cheese product launchers. The company’s top brands include Cheeze Whiz, Kraft Singles, Philadelphia, Taco Bell, and Velveeta. In 2021, it divested its natural cheese portfolio to Lactalis, focusing further on processed cheese products. Additionally, the company’s Philadelphia brand has launched its first plant-based spread offering.
In the non-dairy cheese space, Otsuka Pharmeceutical is the innovation leader. The Japan-based pharmaceuticals company also operates a consumer products division, manufacturing the popular Daiya non-dairy cheese brand. In March 2023, the company announced a multi-million-dollar investment in natural fermentation technology with the goal of a “tastier, meltier and stretchier plant-based cheese than any other on the market.” By December 2023, the company launched its new cultured plant-based cheese products.
Consumer Insights
Dairy cheese has been purchased by more than 60% of Americans in the past twelve months, while non-dairy cheese has been purchased by 7%. Notably different demographic groups eat dairy and non-dairy cheese. Dairy cheese skews toward older suburban traditionalists, while non-dairy cheese appeals to young urban professionals, stressing the need for targeted marketing.
The majority of both dairy cheese and non-dairy cheese consumers eat these products at least once a week. Both types of consumers increased their cheese intake more than decreased. Over double the number of consumers increased their non-dairy cheese intake, compared to dairy cheese consumers. Perceived health benefits, lifestyle changes, and shifting taste preferences are driving increased consumption of both types of cheese.
Dairy cheese is generally eaten during lunch and dinner, while non-dairy cheese skews towards snacking times. Consumers say they are most influenced by claims of no artificial flavors and being made with real or natural ingredients.
Product Launch Trends in the US Cheese Market
Non-dairy cheese launches grew by 17% in the past five years, while dairy cheese launches remained stable. However, dairy cheese launches have been trending upward since 2021. Semi-hard, hard, and processed cheese accounted for nearly three quarters of new product introductions, with non-dairy cheese reaching 12% of total cheese introductions, up from 5% in 2019.
Along with plant-based and vegan, most non-dairy cheeses have gluten free claims as well. Clean claims seen on non-dairy cheese are mostly GMO free, organic, and palm oil free, while dairy cheese tends to have claims of no additives or natural ingredients. Ethical claims on dairy cheese are most often related to animal ethics, while on dairy-free cheese ethical claims are generally related to the environment. Emergent claims on dairy cheese include no trans-fat, reduced calories, reduced sodium, and limited edition. In non-dairy cheese, emerging claims include limited edition, low saturated fat, and heart healthy.
Cream cheese entries are growing fastest in the non-dairy cheese market, and vegetable, herb, and fruit flavors are rising as well. Regarding ingredients, the fastest growing in non-dairy cheese are edible oils, enzymes, starch, and acidity regulators. In dairy cheese, cream, whey, and whey protein concentrate increased the most.
What’s Next in the US Cheese Market?
With some consumers feeling pressure on their food budget from inflation, a notable number of Americans decreased consumption of non-dairy cheese due to budget changes. Non-dairy cheese brands can investigate the feasibility and profitability of adding value brand extensions to their products, to entice consumers with tighter budgets.
Non-dairy cheese penetration when compared to dairy cheese is low. Additionally, many consumers eating plant-based foods seek improved texture and taste in their products. Technological advancements in the category can help improve these qualities, ideally driving more consumer interest in non-dairy cheese.
Boomers are also a small demographic for consuming non-dairy cheese, despite their general predisposition toward wanting to eat healthier. Brands can specifically market their products towards Boomers by implementing innovations in gut health, a health benefit many Boomers gravitate towards.
Finally, cheese products do not often cite ethical claims, other than humane animal treatment on 30% of dairy cheese. With consumers increasingly interested in conscious living, brands can add claims about existing corporate responsibility initiatives – grass-fed or free range, carbon neutral, or renewable energy efforts – to drive interest in health-conscious consumers.
This article is based on our report, “What’s Trending in Cheese – Non-Dairy in US & Canada.” If you are interested in reading this report, feel free to request a demo.
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