Page 43 - Retail World March 2021

CHEESE CONSIDERATIONS: CULINARY, SIZE AND SNACKING The Australian fixed weight cheese category is worth more than $2.5 billion annually, with value growth continuing to outstrip volume growth in the past year (IRI Market Edge AU Grocery Scan MAT to 3/1/21, supplied by Fonterra). In Australia, more than 98 per cent of surveyed households are already buying from the retail cheese category, so growth is being achieved through premiumisation and increased cross- segment buying as shoppers continue to trade up and move across to higher priced value-add products (IRI Shopper Panel National Panel MAT to 06/12/20, supplied by Fonterra). A key trend that has emerged in the cheese category, notes Fonterra Australia General Manager Consumer Sales Chris Kroussoratis, is the shift to more home-based cooking as a result of Covid-19. “With restaurants forced to close, and lockdown and curfews introduced, people turned to more at-home cooking, and cheese consumption grew,” he said. “Culinary cheese experienced 23 per cent growth last year and our Perfect Italiano brand has driven much of this culinary growth, up 37 per cent \[IRI Market Edge AU Grocery Scan MAT to 3/1/21\].” As restrictions began to ease, Fonterra launched its ‘Perfect for That’ TVC campaign. Keeping culinary cheese top of mind, the campaign showcases the role of culinary cheese, specifically Perfect Italiano, in making meals “delicious”. Another trend impacting the category is the shift to smaller-pack cheese. Mr Kroussoratis says this has been driven by the growth of smaller households, as well as an increase in demand for convenient solutions and desire for less waste. “Four out of every five units sold come from small packs \[500g or less\], which continue to grow at three times the rate of larger packs \[500g-plus\],” he said. “Because of this, we’ve expanded our Bega brand into smaller pack sizes, with our tasty grated now available in smaller pack sizes in the majors \[300g grated already in independents\], with the Strong and Bitey SKU launching in a smaller pack from April.” Mr Kroussoratis also notes consumer snacking as a “growth area”, with more consumers choosing snacks to sustain energy and provide short-term satiety benefits outside of main meals. “Snacking is currently the highest performing value growth segment, with the kids’ snacking segment slightly outperforming adult,” he said. “The total snacking category in Australia is valued at $26 billion, but cheese snacking currently accounts for less than one per cent of this, so the opportunity is still relatively untapped. “Our Mainland brand has historically led the charge in this space and continues to deliver products that meet shopper and consumer needs, winning the 2020 consumer-voted Product of the Year award for the Mainland Extra Tasty Cheese and Artisan Cracker.” Commenting on cheese snacking, Primo Category Director Michael Herriott says the category has been attracting double-digit growth during Covid-19. “Cheese snacking is an emerging category as shoppers are looking for a quick and convenient snacking/lunch solution,” he said, adding that growth is “fuelled” by NPD such as Primo Stackers and Hans Lunch Plates. “These new products have attracted new shoppers to the category and are priced at a premium to existing offers accelerating value growth.” Mr Herriott, however, advises retailers that it’s important to deliver a range that “caters to a breadth of shoppers” to maximise the growth opportunity. Cheese a core for Fonterra Cheese is said to be “a core” for the Fonterra business, which claims to hold a 23 per cent branded market share with its three brands, Bega, Perfect Italiano and Mainland. “Found in one in two Australian households, our Bega brand continues to be a market leader, holding 11.8 per cent value share and growing in line with the category \[IRI Market Edge AU Grocery Scan MAT to 3/1/21\],” Mr Kroussoratis said. Last year, Fonterra acquired Dairy Country, a secondary cheese processor. According to Mr Kroussoratis, the acquisition was a “logical choice” and further supports the business’s strategy of being customer and consumer led, while ensuring it keeps pace with the fast- growing cheese category in Australia. “By bringing a big share of our secondary cheese processing in-house, we can further strengthen our partnerships with our retail customers and get creative in terms of new products or variants,” he said. Reasons to trade up Retailers, says Mr Kroussoratis, can achieve value through providing shoppers a reason to trade up – through ranging, distribution, inspiration and activation of key events. This includes: • Implementing occasion-based layouts for ease of shop. • Balancing the number of active SKUs to provide variety while reducing duplication. • Enabling greater visibility of products within high growth segments. • Reinforcing the health benefits of dairy to prevent category leakage. • Aligning with key events and seasonal opportunities. • Capitalising incremental sales opportunities through showcasing the versatility and relevance of multiple consumption occasions such as snacking, entertaining, lunch box and meal solutions. • Implementing a tailored range by store to cater for local community needs and shopper demographics. DAIRY CASE MAR, 2021 RETAIL WORLD 41