Beating the odds

Dairy Field, Aug 2003 by Cook, Julie

Not even recession, war or terrorism can keep down the mighty cheese industry.

After a decade of being able to practically write their own ticket, American workers have found they are no longer in the driver's seat. The "war for talent" has temporarily been placed on the back burner, as companies shed employees left and right in an attempt to cut costs. As unemployment rates soar higher, even those Americans who have managed to keep their jobs have felt compelled to cut back in many areas of their lives. For most people, that means scaling back a family vacation or driving the same car for another year or two. Among the more affluent, it could entail holding off on buying a summer home or yacht.

At the same time, lightweight wallets and fears about terrorism have forced many consumers to cut back on the frequency with which they dine out. Instead, people are sticking closer to home, as evidenced by the surge in sales of home improvement products, DVD players and big-screen televisions. This has also led to more home-cooked meals, both out of economic necessity, as well as a desire to commune with family and friends. And as more consumers are flexing their cooking muscles, cheese has emerged as an increasingly common ingredient, particularly in the so-called comfort foods, which tend to grow in popularity in times such as these.

"There's been a whole spate of articles in most of the major media about comfort foods, as people have been in a hunker-down mode, and very few of those recipes do not include cheese in some way, shape or form," recalls Jed Davis, director of marketing, Cabot Creamery Cooperative, Cabot, Vt.

Davis also credits cheese's incredible 98 percent household penetration for helping it stay afloat, even during difficult times. Consequently, cheese has managed to weather the recession, eking out respectable gains in both dollar and unit sales, while other food and beverage categories - including many in dairy - have not fared nearly as well. According to data from Chicago-based Information Resources Inc. (IRI), dollar sales for natural cheese rose 6.1 percent, while unit sales increased by 4.9 percent in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, during the 52-week period ending April 20, 2003. Natural shredded cheese sales grew 3.8 percent and 4.6 percent, respectively.

Granted, these figures pale in comparison with those of recent years. In light of economic conditions, however, "a six percent growth rate is still pretty healthy," says Barbara Gannon, vice president of corporate and marketing communications, Sargento Foods, Plymouth, Wis.

That's not to suggest that cheese has been entirely insulated from the economic downturn. Kevin Burkum, senior vice president, retail marketing for Rosemont, Ill.-based Dairy Management Inc. (DMI), reports cheese sales took a temporary hit in early 2001, when economists generally agree the United States entered the current recession. Complicating matters were rising cheese prices, which only served to squelch demand even more. The industry has bounced back, however, and Burkum says DMI is encouraged by retail cheese sales in the latter half of 2002 and the first half of 2003.

Recipes to the Rescue

The foodservice channel has yet to fully recover, unfortunately, hampering overall cheese industry performance. However, as consumers have sought to replicate their favorite restaurant dishes at home, cheese processors have found themselves increasingly relied upon for serving suggestions and full-fledged recipes. A number of processors have taken to featuring cheese-friendly recipes on their Web sites or via traditional mail. One of the leaders in this area, Sargento took its efforts a step further this year, teaming up with Taste of Home magazine to produce a special 50th anniversary recipe magazine sold on newsstands in the spring. Sargento secured all remaining copies of the publication, making them available on its Web site in exchange for proofs of purchase and a nominal fee to cover shipping and handling.

Likewise, Lincolnshire, Ill.-based Saputo Cheese USA Inc., a subsidiary of the Montreal, Canada-based Saputo Group USA Inc., offered consumers a free "Fresh The Frigo Way" 2003 Recipe Calendar with proofs of purchase plus shipping and handling. Meanwhile, Tillamook County Creamery Association, Tillamook, Ore., features a variety of recipes on its Web site. According to Chris Dinsdale, vice president of sales and marketing, it's all about boosting consumption. "Anytime you can give the consumer another recipe or another way to use cheese, you are going to increase the sales achieved overall," he says. "That's a positive for the industry."

For those consumers who might be feeling a bit more ambitious in the kitchen, DMI's www.ilovecheese.com Web site offers an assortment of cheese-laden recipes from famous m chefs, including Kent Rathbun, David Page and Barbara Shinn. Increasingly, consumers are seeking out recipes for Mexican dishes, as the trend toward Hispanic-oriented food and bever- ages continues to grow. On its Web site, DMI has one section, touting 2003 as "The Year of the Quesadilla."