The Right Whey

AMY SUNG

With so many shoppers trimming their household budgets, it's been a difficult year for many premium-priced brands. However, products that highlight special production claims are holding out surprisingly well in many markets.

In the cheese category, special labeling claims have been developed in response to a variety of consumer concerns. USDA Certified Organic remains one of the strictest standards, but other claims target where the cheese was produced, how it was produced and how the dairy animals were handled during its production. And whether these special claims are grouped together under umbrella terms like “eco-labels” or “ethical cheese,” it's clear that many shoppers are still placing a premium on food products that reflect their personal values and concerns.

“PCC customers make grocery purchases across all categories that reflect their values, and cheese is no exception,” said Russ Ruby, director of merchandising for Seattle-based PCC Natural Markets.

Despite the ongoing recession, Ruby said the trend has continued to grow.

“The trend towards buying items that are locally grown or produced, and those that come to market through sustainable practices, is growing and will certainly include cheese.”

In addition to organic brands, PCC also carries a number of locally and humanely produced cheeses, and in 2007, the company banned any dairy products produced with artificial growth hormones rBGH and rBST.

“All liquid milk, yogurt, sour cream, butter, ice cream, kefir and cheese sold by PCC are free of the growth stimulant,” Ruby said, adding that not only has some research linked use of the artificial hormone to cancers in humans, but it also puts the health of dairy cows at greater risk.

“We don't track sales of ethical cheese as a separate category but sales are strong and consistent,” Ruby said. “Our in-store cheese specialists report that customers are aware of the variety of ethical cheeses we carry, are particularly pleased that PCC has banned rBGH from fresh dairy products, and like the variety of locally made cheese we offer.”

Popular local cheese producers featured at PCC include Beecher's Handmade Cheese, the only artisan cheese maker in Seattle; Tillamook, the Tillamook, Ore.-based dairy cooperative; and Washington producers Golden Glen Creamery in Bow; Sally Jackson Cheese, Oroville; Mt. Townsend Creamery, Port Townsend; and Samish Bay Cheese, Skagit County.

Ruby said PCC offers information about the cheese in-store as well as on the company's website.

“Our cheese displays showcase our artisan cheeses beautifully,” Ruby said.

“Our deli coordinators are well-versed in the many varieties we offer. We provide point-of-sale information about our cheese, and publish profiles of local cheese producers on our website. Our locally produced cheeses are designated with a ‘Local’ label. We host in-store cheese tastings and frequently pair our artisan cheese with wines at weekly wine tastings.”

Andronico's Markets, based in Albany, Calif., also carries several brands of cheeses that emphasize local production, humane treatment or both. Foodservices buyer Tracy Colla noted that the company's Northern California location has certainly helped with the search for a variety of local cheeses.

“We're lucky to live in an area that has several local producers,” she said.

“Customers in the Bay Area are some of the most savvy customers you'll find. People love food here and not just any food — it's all about local, fresh, green, ethical, organic.”

Andronico's carries cheese from various farms including Fiscalini Farms, which was the first dairy in the country to be certified by Urbandale, Iowa-based Validus for compliance with animal welfare standards.

Many producers are seeking certification due to requests for more information from their consumers. Jennifer Bice, former American Cheese Society board member and owner of Redwood Hill Farm & Creamery, Sebastopol, Calif., said she decided to seek certification through Humane Farm Animal Care's “Certified Humane Raised & Handled” program because the creamery received so many calls and questions from customers asking how it cared for its dairy goats. The creamery was already certified organic.

“The humane treatment of animals is a growing category due to the highly publicized cases of animal abuse and the increasing industrialization of food production or ‘factory farming,’” Bice told SN.

“Retailers are also pushing humane animal treatment for their vendors. Especially ones like Whole Foods, who have an animal compassion program in their stores. And even in crossover stores, humane treatment or raising of the animal is a benefit that is publicized.”

Citing data from the International Deli-Dairy-Bakery Association's “What's In Store 2009” report, Marilyn Wilkinson, director of communications, Wisconsin Milk Marketing Board, said that cheese purchases are increasingly being affected by consumer interest in “socially correct” products. While Wilkinson told SN she still believes that to be true, she added that the recession is impacting sales of many higher-priced items featuring these special claims, such as organics.

“There are a number of studies that have shown that how something is produced, the origin, sustainability issues, all those things are important to consumers,” Wilkinson said. “While that's obviously something that consumers are concerned about, we're starting to see organics soften. Organic, if you look at the last several quarters, it's showing a gain, but if you look at the most recent quarters, it's slowing down. So the recession may be taking its toll; pricing may be taking its toll.”

Colla of Andronico's did note that prices for cheeses carrying local or humane care claims are sometimes higher than conventional cheeses.

“Prices are sometimes higher because oftentimes to be environmentally responsible is more expensive,” she said. “Letting the sheep, goats and cows roam freely is more costly.”

To justify those higher prices, shoppers who prefer the category are demanding greater transparency from producers, and third-party certifications from organizations that they trust. Currently, there are a handful of third-party certification programs. One, Certified Humane Raised & Handled, is administered by Humane Farm Animal Care, Herndon, Va., and supported by the American Society for the Prevention of Cruelty to Animals and the Humane Society of the United States, among others.

The program requires producers to meet several general standards — forbidding the use of cages, crates and tie-stalls, for example, and requiring producers to provide their animals with ample fresh water and food free of added antibiotics or hormones. There are several species-specific provisions as well. The program started in 2003 and currently has approximately 30 companies participating, six of which are dairies.

“We came on the scene and we had a lot of press, so farmers contacted us,” said Adele Douglass, executive director of Humane Farm Animal Care. “They looked at our standards on our website — we're totally transparent, everything is on the website — and they just called and asked a lot of questions.”

Douglass told SN that prices for products bearing her organization's Certified Humane Raised & Handled seal generally fall right in between organic and conventionally produced items.

“We did a survey a couple of years ago — we sent people into supermarkets to look at conventional, us and organic. This was for chicken, eggs and beef, it wasn't for dairy, and at the time, we fell in the middle,” Douglass said.

“We were higher than conventional and a lot lower than organic. We didn't [audit] cheese, but I would presume it would be the same thing.”

Generally speaking, the market for cheese is growing. Retail sales of all cheese increased 15% between 2006 and 2008, due largely to very strong pricing in 2008, according to the May 2009 cheese report from Chicago-based Mintel.

Coming off two consecutive years of stable, consistent growth in 2007 and 2008, the market is set to reach nearly $16 billion in 2009, with more modest 4.2% growth. Mintel said it expects the cheese market to grow 23% from 2009-2013.

Natural cheese remains the largest segment, growing nearly 21% from 2006-2008.

“Consumer interest in not only healthier but less processed foods has led to a greater interest and approval with higher-priced, but better-quality, products including natural cheese,” the report said.

Within this growing market, “ethical cheese” claims could be a promising niche. Citing a 2004 Golin Harris study sponsored by United Egg Producers, Humane Farm Animal Care's website notes that “75% of consumers would choose food products certified as protecting animal care over those that are not.” Industry experts agreed that there is demand and room for growth with eco-labeled or ethical cheese.

“Everyone thinks, ‘Oh, this is just on the coasts,’ but I have [farmers] in Utah, Idaho, New Mexico, Alabama, every state, states that you would just not assume, but they are interested,” said Douglass. “I've sent brochures out to every single state in the U.S.”

Douglass added that since the Certified Humane Raised & Handled program went from raising 143,000 animals under its standards the first year, to 22.6 million last year.

“We see customer interest in this category only growing and we will continue to meet demand by sourcing locally produced premium cheese that meet our quality standards,” Ruby of PCC said.

Colla of Andronico's agreed.

“Absolutely, we see ethical cheese as a trend that will continue to grow,” Colla said.

“Our customers are concerned about sustainability and are very socially responsible. Ethical cheese will only continue to become more and more known and sought after. Same with wine, chocolate, coffee and so on. Our customers want to buy locally made items. We certainly have plans to keep buying ethical cheeses in the future. We need to get the word out there and educate our customers about what we offer.”

Wilkinson did say that she believes once the economy improves, consumers whose concerns about production standards were superseded by concerns about price will eventually return to the category, once again purchasing more foods that align with their values.

“As we come out of [the recession], those interests will still be there, and I don't think that will change,” she said. “I think we'll see continued growth because I believe that now more than ever, people are interested in those issues.”