Thursday, April 23, 2015

Dairy Foods Innovations: Different is Better than Better (Cheese Makes Everything Better)

Photo source: Wisconsin Milk Marketing Board

This week more than 1,500 consumer packaged goods (CPG) and retail professionals came together in Austin, TX, for the IRI 2015 Summit. I was fortunate to be one of a handful of trade journalists to attend. With the theme of “Accelerate the Path to Growth,” speakers focused on how to change the old way of doing business to complement the changing composition of the U.S. household, including consumers’ increasing dependence on digital mobile devices.

Yogurt Leads IRI’s New Product Pacesetters
At the Summit, IRI announced its annual New Product Pacesetters. Once again, yogurt remains hot. Four products, including Chobani Simply 100 (No. 3 on the list with $120.9 million in sales), Activia Greek (No. 5; $86.5 million), Chobani Flip (No. 6; $83.2 million) and Yoplait Greek Blended (No. 10; $69.4 million) all landed spots on the ranking’s top 10.

“Consumers cannot get enough of that protein filled, on-the-go snack and meal time replacement,” said Susan Viamari, editor of Thought Leadership for IRI.

To read more about the New Product Pacesetters, you can link HERE to a comprehensive article written by Keith Nunes, executive editor of Food Business News, who attended the conference with me.

Here's some interesting consumer data from the IRI MarketPulse Survey conducted in February 2015:

  • 66% (of consumers) make a shopping list prior to going to the store
  • 52% choose a store because it has the lowest prices on needed items
  • 47% stock up on items because they are on sale
  • 27% buy brands other than their favorite brands because they are on sale
  • 15% will not go down certain aisles to avoid unplanned purchases
Photo source: Wisconsin Milk Marketing Board

Here are some points raised at Summit:

  • “By 2020, more than 90% of digital access will be on mobile devices,” said Andrew Appel, president and CEO, IRI. “We are witnessing the biggest change in consumer buying since the invention of the car.”

  • Thomas Greco, CEO, Frito-Lay North America, emphasized the importance of leveraging science as the foundation for innovation and growth. He explained how the 50-year-old Gatorade brand has always focused on the athlete and how the beverage drives competitive performance. Watch an impressive Gatorade video HERE.
  • Starbucks fans get ready for this: a new app feature that allows you to order your beverage and it will be ready at the pick-up counter in four minutes. Michael Conway, president-global channel development, Starbucks, said the feature is just debuting in select markets but should be available nationwide by the end of the year. He also said that currently, about one-third of in-store transactions are cashless. Specifically, 18% are made through the phone app. 
  • “U.S. households are getting smaller,” said Denise Morrison, president and CEO, Campbell Soup Co. She cited data showing that only one-fifth of U.S. households include families with married parents and their own children. Further, in 1950, 78% of U.S. households were married. In 2010, this figure dropped to 48%. “The new American family household is more like a mosaic. And every member of that household wants to be recognized as unique,” she said. “They are demanding that companies and brands connect with them.” She explained there’s an explosion of interest in fresh and packaged fresh foods. (This is great for dairy!!!) “Winners will be companies that adapt successfully; that have differentiating principles and authentic ideals that resonate with consumers,” she said.
Photo source: Wisconsin Milk Marketing Board
That word differentiate brought attendees to the final keynote speaker, Sally Hogshead, a best-selling author and a leading expert on fascination. Just think about these statements she made:
  • Different is better than better.
  • Branding is helping the product be more of what it is.
  • Consumers’ current attention span is nine seconds. It used to be 20 minutes. After nine seconds you either have to renew their attention or they move on.
  • To renew, you need to create a fascinating experience.
To watch a five-minute video recap of day one at Summit, link HERE.

To watch a five-minute video recap of day two at Summit, link HERE.

Differentiate and Fascinate with Cheese
The cheese departments—both packaged dairy case and specialty deli counters—are reinventing themselves, and innovating through differentiation in order to fascinate the consumer. The growth of online shopping, snacking, bold flavors, pairings, convenience foods and an on-going trend of consumers choosing natural, artisan foods will impact the ways Americans eat cheese in 2015, according to the Wisconsin Milk Marketing Board (WMMB).

With American cheese consumption increasing 42% over the past 25 years, according to USDA figures, there’s no arguing that U.S. cheese consumption is at an all-time high. While opportunities for continued growth in the category appear strong, the ways in which people are consuming and enjoying cheese continues to evolve thanks to marketers who provide points innovative options.

Mega trends like natural and specialty cheese consumption, the Millennial generation’s impact on the food industry, snacking and the growing use of social networks and apps for recipes and purchase decisions will continue to gather momentum. The top cheese trends also reflect the constant evolution of the American palate and a growing desire for unique, bold flavors.

The eight ways Americans will eat cheese in 2015 are:
  1. With a cheesemonger. According to a recent report from the International Dairy-Deli-Bakery Association (IDDBA), shoppers are looking for more from their primary stores when it comes to specialty cheese. As a result, each year, grocery stores are moving closer to becoming restaurants with expanding prepared food choices, dine-in space and chefs and cheesemongers taking up residence. With an expanding palate and more choices from their neighborhood cheese expert, more and more Americans are exposed to and are consuming natural, artisan cheeses.
  2. As a snack. Social media and guiltless food bloggers have taken snacking to the next level, making it okay for us, particularly women and millennials, to express our obsession with snack foods. It’s having a big impact on how Americans choose their “meals.” According to a recent report from IDDBA, snacking represents 50% of all eating occasions. Cheese is well aligned with today’s growth trends in snacking and enjoys a position as a unique snack, both healthy and indulgent. In 2015, consumers will snack on cheese in all forms, from simple string and cube nibbles to elegant cheese picks and meal-replacing cheese boards.
  3. With hard cider. Hard cider and cheese is the next big thing in food and beverage pairings. Dry ciders pair well with rich, buttery cheeses like cheddar, aged gouda or blue, while semi-sweet ciders are perfect with mild, nutty, soft-ripened cheeses such as brie and camembert. With the array of new pairing options, we’ll see cider and cheese combinations in high-end restaurants, hip eateries and at home.
  4. In their sweets. Our obsession with trendy baking and cutting-edge pastry chefs has made unique flavor combinations mainstream and impacted how Americans view their sweets and breakfast foods. Cheese is the perfect addition to traditional sweets like cookies and pancakes to satisfy sweet-salty cravings and the answer the constant search for unique twists on classic flavors. This year, we’ll see more sweet-savory cookies made with cheddar, blue cheese and other cheeses and more pancakes with cheese fillings and savory ingredients such as ricotta, blue, Swiss and gorgonzola.To read a recent article I wrote for Food Business News on cheese ingredients, link HERE.
  5. With a kick. According to IDDBA, shoppers, especially Millennials, are increasingly looking for cheeses that reflect their globalized palate. The constant search for unique and bold flavors will continue into 2015 as consumers crave cheese with hints of jalapeƱo, herbs, smoke, garlic and basil, as well as bitter flavors like espresso.
  6. At their convenience. Convenience remains a top priority for consumers. Cheese slices, shreds, spreads and snack sticks make up a large share of convenient products launched over the past year and will continue into 2015. According to the WMMB’s custom IRI database, shredded cheese will continue to outpace other top forms of cheese and account for a 27% volume share of the total retail cheese category.  Two other convenient cheese forms are cheese curds and stick cheese, both achieving double-digit volume growth rates each year. 
  7. With a story. Sales of natural cheese have steadily been on the rise for the past few years and the trend isn’t going anywhere. According to the WMMB’s custom IRI database, natural cheese accounts for close to 80% volume share of the total retail cheese category. The recent shift in the consumer need to know where food comes from will take cheese buying to a whole new level in 2015. According to IDDBA, the recent call to get closer to your food has taken food beyond “natural” into the realm of authenticity, transparency and storytelling through cues around “local” and “artisanal.” Not many foods tell a better story than cheese, and with 600 varieties, types and styles coming from Wisconsin’s finest cheesemakers alone, they’ll be a top choice at U.S. groceries in 2015.
  8. With a smartphone. More than two-thirds of Americans are using smartphones, according to Nielsen data. Of those, more than 80% of Millennials are using a smart phone and rely on their mobile devices when shopping. They’re choosing, planning, experiencing, sharing and buying food online, and that includes cheese. New mobile websites and apps, such as Wisconsin Cheese Cupid that you can link to HERE, help shoppers pair cheeses with their favorite beer, wine or spirit.
I would like to add a ninth way, and that’s with bacon. Before heading to Austin, I attended the 7th Annual Baconfest Chicago. Bacon and dairy—cheese, dips, ice cream and even yogurt—go together.

To read more about this trend, link HERE to an article I wrote on the event for Food Business News.

In conclusion, when it comes to using cheese in foodservice, the new Wisconsin cheese blends calculator from WMMB helps foodservice professionals expertly blend varieties of Wisconsin cheese for hot applications, maximizing for flavor and performance. The new online tool features more than 500 customizable two-, three- and four-cheese blend combinations ideal for use in pizza, pasta, sauces, soups and more. This of course can be translated to the CPG business as well. You can link to this tool HERE.

“The blends were expertly created taking into account the many factors that can affect cheese performance in a hot application, such as fat content and acidity, melt and browning ability, stretch, oiling off and more,” says Allen Hendricks, vice president of channel programs-foodservice at WMMB.

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