Wednesday, January 26, 2022

At home with cheese more than ever

Cheese is a much loved staple for most Australian households, with 98% of all households buying into the category (IRI, Shopper Panel Data, 23/5/21, supplied by Fonterra Australia).

As with other grocery categories, cheese has been impacted by the changing shopper habits brought about by Covid-19. People are shopping less frequently but with bigger shops, thereby increasing the importance for retailers to ensure layouts are easy for shoppers to navigate to avoid missing incremental sales.

Additionally, Covid-19 has accelerated the digitalisation of the path to purchase with online now accounting for around 10% of sales for the category but contributing 40% of the total category growth (IRI Market Edge, AU Grocery Scan, MAT to 22/8/21, supplied by Fonterra Australia).

An over-arching trend is towards smaller pack sizes. Packs of less than 500g accounted for nine of every 10 units sold in the latest MAT period. This further underpins the trend of consumers looking for convenient solutions and a move towards smaller households, while also tapping into the sustainability trend with less waste.

According to Fonterra Australia, overall cheese category growth has been underpinned by value realisation as shoppers move into more fit-for-purpose SKUs with three key themes emerging:

Health/lifestyle. While still a relatively small segment within the cheese category, vegan and lactose free options have been growing strongly at a four-year CAGR of 30% as shoppers seek out products that align with their health or lifestyle preferences.

In-home cooking. Particularly on the back of Covid-19 lockdowns, cooking cheese has been growing ahead of the category with a CAGR of 9%.

Snacking. The expandable nature of cheese snacking has brought about an explosion in growth as assortment in this segment has grown over the past two years. This has led to a doubling of the segment size to $264 million in the latest MAT. As a result, cheese snacking has accounted for just over half the total cheese category growth.

For more on the cheese category including trends and NPD, check out the latest issue of Retail World.

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