Sharp Merchandising

KELLY GATES

Any way you slice it, the commercial cheese category has changed.

Individually portioned snack packs have breathed new life into the dairy department over the past few years. So have deli-style sandwich slices and packages labeled “low-sodium.” Shoppers are even experiencing new options in shreds as manufacturers experiment with bold flavors like chipotle cheddar and mozzarella with sun-dried tomato and basil.

Unit sales of chunk cheese rose 2.1% during a recent 52-week period, SymphonyIRI reports.

While these contemporary additions have generated excitement in the dairy case, they have also created the need for a mini merchandising makeover, retailers told SN.

Publix Super Markets, Lakeland, Fla., is one supermarket that was prompted to rework the layout of its cheese coolers.

“We have made changes over time, sectioning out cheeses for customer convenience,” said spokeswoman Maria Brous. “We want our customers to experience the plethora of cheeses available without being overwhelmed. Also, the ease of the layout allows the customer to shop by need and preference.”

Publix only labels some sections with signage. There just isn't enough space in the department to highlight each one, said Brous.

Hanging signs is one of the most important things retailers can do in a product-packed department like dairy, said Bill Bishop, president, Willard Bishop, Barrington, Ill.

“Right now, most dairy departments can be difficult for a shopper to navigate,” said Bishop. “A number of chains, like Jewel in Chicago, have added signage that calls out different sections that are appropriate for different uses. In cheese, they have sections like snacking and sandwich making.”

Bishop believes that if shoppers can be directed to a smaller, more specific section, they won't be as overwhelmed. Once there, they might also start browsing other products within the section that they would not have considered otherwise.

Extensive research conducted by the Dairy Management Inc., Kraft Foods and The Dannon Company backs this theory.

“According to the dairy department reinvention testing and consumer research conducted by our coalition, we have found that the best opportunity is definitely created by segmenting cheese by usage,” said Rebecca MacKay, vice president of sales and marketing for DMI.

A full marketing mix, involving websites, circulars and even dietitians, should also be utilized to educate consumers on how to shop the new layout, she said.

Jim Wisner, president, Wisner Marketing Group, Libertyville, Ill., concurs. Along with these resources, he also advocates the use of miniature point-of-purchase markers.

“The real opportunity is in educating customers about the different cheeses and how to use them,” Wisner told SN. “This can be done by putting a simple fact or tip on a small sign and then displaying it inside the case.”

Wisner recommends placing a sign next to grated parmesan that reads, “Next time you are breading fish, add a sprinkle of parmesan to the mix.” Or, adding one in next to deli-style sliced cheeses that pairs swiss with ham, provolone with roast beef and American cheese with turkey as sandwich-making suggestions.

Recipe cards would work as well. A recipe for cheesy chicken and rice casserole, for instance, could be displayed next to shredded cheddar.

“Cheese sales are already on the rise, but these ideas are quick, simple and inexpensive and will help boost profits even further,” he said.

According to SymphonyIRI Group, Chicago, unit sales of most cheese were indeed up. During the 52 weeks ending June 13, 2010, chunk cheese varieties increased 2.1%, crumbles rose 3.5% and shreds were up 5.7%. Cheese slices experienced the biggest volume growth, 7.7% during the same time period. And, string cheese had modest gains at 2.5%.

At Fresh Encounter, Findlay, Ohio, sales have mimicked national trends, although, Eric Anderson, chain president, touts shreds as the “Big Cheese” there.

“Sales of cheese, particularly shredded cheese, have remained strong in our stores even during the downturn in the economy,” he said. “I think that the consumer looks at cheese as a staple item, not as an indulgence. Because the product is so versatile and used as an ingredient in so many dishes, it will remain strong as long as the market doesn't go too high.”

Anderson reported a notable uptick in sales of snack cheese in recent years, particularly provolone, aged swiss, colby jack and sharp cheddar.

There are certainly plenty of single-serving selections for consumers to choose from. Kraft makes 100-calorie pack Cheese Bites — five packs per bag — in flavors like Cheddar & Monterrey Jack, Cheddar, Three Cheese Blend and Mozzarella Garlic & Herb. Land O'Lakes has its own snack-sized assortments called “Snack'N Cheese To-Go.” These come in Cheddarella, Co-Jack, Mild Cheddar and Medium Cheddar varieties, including reduced-fat versions of Mild Cheddar and Co-Jack.

Then, there are string cheese and individually wrapped spreadable cheeses to consider. Both are highly popular at Highland Park Market, Glastonbury, Conn., according to Tim Cummiskey, grocery manager for the supermarket's Glastonbury store.

“We sell a lot of string cheese, especially during the school year,” he said. “Laughing Cow cheeses are also really popular among our adult customers year-round. Most buy these to take to work in their lunches or as an afternoon snack.”

As shoppers develop more sophisticated taste buds, specialty and bold-flavored cheeses are starting to attract their attention, said Cummiskey. Sargento is one food maker catering to this trend.

Sargento now makes Special Edition sharp cheddar slices and shredded cheese using cheddar specifically chosen for its processing, age and resulting extra-sharp flavor.

The company also offers Authentic Mexican shreds in flavors like Chipotle Cheddar, Taco and Taco & Nacho. Its American shredded cheese varieties include Sharp Wisconsin and Vermont Cheddar with Real Bacon. And, the company makes Italian blends of shredded Mozzarella with Sun-dried Tomatoes & Basil and Mozzarella & Asiago with Roasted Garlic.

Sargento also has a line of low-sodium cheeses for salt-conscious shoppers — provolone and colby jack slices, mozzarella and mild cheddar shreds and string cheese are among them.

STRATEGIC SELLING

Reorganizing and adding signage have helped some retailers quell chaos in their cheese cases. The next step is to implement tactical merchandising and marketing programs that inspire additional purchases, said Bishop.

“Cross-merchandising is a powerful method to grow sales, but it's always difficult to do this by physically moving products and displaying them together,” he said. “This is a particular challenge in dairy because shelf space is limited and expensive, and it takes additional labor to maintain these cross-merchandising displays.”

Retailers who choose to forgo this option can leave products in place and simply offer cross-item discounts. They can also market meal solutions in their weekly ads and via in-store signs, he added.

For those who choose to take on the challenge, Publix has set a prime example.

“We do quite a bit of cross-merchandising within our dairy department and across the store where it makes sense,” said Brous. “This can be seen in our current fliers when we bundle items or underline companion items.”

The chain also includes a meal recipe in each ad, often incorporating its own private-label cheeses into the ingredient list. One week, the featured fare was blackened shrimp alfredo and included a recipe that called for 1 tablespoon of Publix-brand parmesan cheese. The PL product was one of several items boxed in yellow. A tag line overhead read, “Save over $4.05 when you buy highlighted sale items from the recipe below.”

Marilyn Wilkinson, director of product communications for the Wisconsin Milk Marketing Board in Madison, sees the opportunity to not only cross-merchandise, cross-promote and provide meal solutions. She challenges supermarkets to also educate shoppers, conduct in-store sampling and move older inventory, all at the same time, using an existing labor force.

“Deli personnel can use virtually any type of cheese in prepared foods, including cheeses that are at the end of their codes and need to be sold or used up quickly,” said Wilkinson. “These employees already hand out samples and answer questions about what is in each dish. Why not have them educate shoppers about the cheese they are tasting and encourage people to buy some while in the store?”

In the future, there will only be more new products to add confusion to the cheese category. Supermarkets should be doing something, anything, to start the education process now, she added.