DALLAS (FNS) -- Sales of reduced-fat and no-fat cheese products account for about one of every four dollars spent on cheese purchases and could total up to half after the turn of the century, dairy industry officials told attendees of the annual International Dairy Foods Association meeting here.
"This is a growth industry," said Martin Veeger, assistant director for economics and market research for IDFA, Washington. "There is good long-term potential."
While growth rates have slowed in the past several years as the market settles down, the overall upward trend is expected to continue as consumers change their palates and focus on healthier eating and as improved technology in low-fat cheese manufacturing produces tastier results.
Veeger said reduced-fat cheese sales make up 15.3% of the almost $4 billion cheese market, or a 4.4% increase to $602 million, in the year ended September 1996.
Non-fat cheese sales total 7.4% of the market and have remained almost flat at $280 million for the year ended in September 1996.
Sales are particularly good in the Eastern states, where almost 50% of households buy the reduced-fat cheese products, according to ACNielsen data prepared for the institute's Cheese Market Research Project. That compares with about 46% of all households in the United States.
"Six of the top markets are in the East," Veeger said. The best markets, in order, are Boston; Des Moines, Iowa; Albany, N.Y.; Denver; Pittsburgh; Syracuse, N.Y.; New York City; Philadelphia, and Columbus, Ohio.
Dominant in the worst markets for reduced-fat cheese is the South. Those markets, in order, are: Tampa, Fla.; Phoenix; Oklahoma City and Tulsa, Okla.; Sacramento, Calif.; Jacksonville, Fla.; Atlanta; Little Rock, Ark.; New Orleans; Mobile, Ala.; Memphis, Tenn., and Birmingham, Ala.
However, those markets could catch up with the East in a few years.
"The trend toward healthy eating started in the Northeast and is blossoming out," said George Wenger, senior vice president of Alpine Lace Brands Co., Maplewood, N.J.
In a telephone interview after the IDFA meeting, Wenger said he sees the growth continuing in the reduced and no-fat cheese category during the next decade as consumers retrain their palates toward lower-fat products just as many switched to low-fat milk from whole milk for health reasons.
"In the 1970s, the buzzword was salt. In the 1980s, it was cholesterol. In the 1990s, it is fat," he said.
As the trends continue, he said, sales of reduced-fat and no-fat cheeses could account for up to 50% of all purchases after the year 2000.
The growth already has been phenomenal, Wenger pointed out: Alpine Lace introduced the first low-fat national brand of Swiss cheese for supermarket delis in the mid-1980s and the first no-fat national brand in the early 1990s. "Now, every major cheese marketer is offering some form of reduced-fat cheese, and sales have soared."
Wenger said sales of lower-fat cheeses have jumped from 3% in 1988 to 12% in 1992 to 25% now, fueled first by the anticholesterol craze and then by the low-fat craze. This follows the trend exemplified last year when three out of every four dairy products introduced were low-fat, he said.
However, future low-fat cheese sales will be partially contingent on how much the technology and manufacturing can be improved so that lower-fat cheese can rival the taste of full-fat cheese.
Mark Johnson, senior scientist for the Center for Dairy Research at the University of Wisconsin-Madison, said cheese manufacturers need to improve flavor-enhancement methods and get rid of the rubbery textures so often associated with reduced-fat or no-fat cheese.
Major consumer complaints about reduced-fat cheeses include poor taste, poor body and problems melting the cheese. Johnson said a key to better low-fat cheese is being able to achieve a higher moisture or water content to substitute for fat without ruining the cheese balance or getting a soft, pasty cheese.
He said the Wisconsin Center for Dairy Research has patented a manufacturing protocol that uses a firmer milk coagulum and a no-wash system that enhances flavor and moisture despite the lower fat and the higher protein content.
Roberta MacDonald, senior vice president for marketing at Cabot Creamery Cooperative in Vermont, said her company has had a lot of success in selling cheese that reduces fat content by 33%, 50% and 75%. Reduced-fat cheese accounts for about 15% of Cabot's sales.
She said the creamery cooperative has heavily marketed the reduced-fat cheese by providing low-fat cheese recipes to consumers and distributing materials to food editors at daily newspapers.
But marketing alone will not produce a sustained increase in consumption. "If you don't give them taste, they won't be back," she said.
Overall, there were 32 brands of reduced-fat cheese distributed to supermarkets in 1995, as compared with 109 full-fat cheeses and 10 non-fat cheese brands.
Experts said they expect a bigger increase in the number of reduced-fat cheese offerings, but no-fat cheese will lag until technology improves the texture and taste.