Artisanal cheese has always been something of a standard-bearer for the foodie revolution. As a category, it's approachable enough for newcomers, yet nuanced enough that it can still excite acclaimed chefs. Cheese is perfect for pairing with wines and beers, which makes it flexible enough to be used as an hors d'oeuvre, an appetizer or even a dessert. And at retail, good merchandising, a good sampling policy and enthusiastic associates can make a cheese department the most exciting area of a store.
![Specialty cheeses are showing a lot of staying power during the recession.](http://supermarketnews.com/images/0413_SNAgingWell280.jpg)
All of these factors helped make cheese counters and cheese shops a popular addition to many new, upscale supermarkets during the past decade. Following the lead of chains like Whole Foods Market, Wegmans and H-E-B Central Market, retailers either opened cheese shops of their own, or expanded the selection of fine cheeses available in their deli departments.
And fortunately, the category is showing a lot of resilience during the ongoing recession, even as many shoppers trim their food budgets.
“Our overall sales are up this year,” said Rob Kaufelt, owner of Murray's Cheese Shop, New York. “We've only got two stores in New York, but we've also got three test stores at Kroger locations in Cincinnati. Overall growth is flatter than it was before the recession, but it's still up.”
Supermarkets that have made efforts to build the category in recent years, such as Super Foodtown/Food Circus, a 10-unit independent based in Middletown, N.J., say their departments are still performing well and drawing shoppers, boosted by minor tweaks in promotions and merchandising.
“I think it depends on store location, and how and when people have been affected by the recession,” noted Patty Rispoli, deli supervisor for Super Foodtown. “Some areas are more affected than others. Obviously, we're cutting some pieces a little bit smaller, to make the retail price a little bit less. And as far as the domestic cheeses go, there's more variety available than ever, and I think it's become a more interesting category. You have a lot of cheeses available through Wisconsin that simulate the imported market, which can give people a little more value as well. You can get a domestic Romano vs. a Pecorino Romano, for example. So you do see people leaning toward the domestic cheeses more than they did before.”
Unfortunately, for many retailers, dollar sales increases in their cheese departments were due primarily to price inflation. Of the top 12 specialty cheese varieties — including cheddar, feta, mozzarella, Swiss, etc. — all except Parmesan faced rising retail prices and declining volume sales in the third and fourth quarters of 2008, according to data from the Perishables Group, a Chicago-based market research firm. Similarly, in January 2009, Parmesan, mozzarella and feta showed volume and dollar sales growth, but the remainder of the top 12 varieties continued to face eroding volume at higher prices.
“We're also seeing higher promotional prices as well,” said Tracy Kreuser, a project manager for the Perishables Group. “Retailers are promoting less often, and they're increasing the promotional price, as well as the regular price” on specialty cheeses.
However, the news isn't all bad. Volume increases for Parmesan, mozzarella and feta are likely due to more shoppers preparing meals at home to save money — a trend that should be on the rise through the duration of the current recession. Kreuser also noted that last year's commodities price spike is still working its way through the system. Dairy prices have fallen significantly this year, but both suppliers and retailers are still making up for margins lost when they held prices steady in 2008. Better promotional opportunities are on the way.
![Feta, mozzarella and Parmesan have performed well this year, possibly because more shoppers are cooking at home.](http://supermarketnews.com/images/0413_SNCheese.jpg)
“Natural cheese has been going up in consumption the past 10 years, although growth has been relatively flat in the past 18 months due to an increase in pricing, but we think that's going to start to change,” said David Freedheim, consultant for the California Milk Advisory Board, San Francisco. “In California, our specialty and farmstead cheeses are growing. That tells us that while consumers may consider these items as affordable luxuries, they are continuing to purchase and consume our fine cheeses on a more mainstream level.”
Freedheim added that interest in domestic artisan cheeses has been growing for some time. Last September, U.S. artisan cheesemakers were awarded a record 56 medals at the World Cheese Awards, an annual international competition sponsored by the London-based Guild of Fine Food. California cheesemakers took home prizes including Best Cheddar and Best Brie.
One expert explained that this growth is due as much to an increase in consumer availability as it is to competitive price points and comparable quality with imports. Basically, domestic producers have grown and have made their cheeses available at more retail locations.
“You've got a lot of stores that have access to the great American cheesemakers that didn't before, so shoppers are seeing a lot of cheeses that they weren't even seeing before in their marketplaces. Secondly, a lot of chefs are offering them in entrees as well as desserts,” said Steve Jenkins, partner and master cheesemonger at Fairway Markets, New York.
“If a restaurant is not hip to cheeses, they're not hip at all. They're making a statement with their artisanal cheeses. And I would say that from a retail standpoint as well. Retailers, if you're happening at all, if you've become a part of the fabric in any community, you're definitely showcasing some great American artisanal cheeses in your cheese operation. Twelve or 10 years ago, perhaps you weren't, you could get away without doing it. But now, you absolutely must.”
The growth of the domestic artisanal cheese industry, as well as its growing international competitiveness, is another example of how fine cheeses have become part of the mainstream consumer diet. Noting that for American cheese shops, “artisan” cheeses used to mean small-batch products that buyers would travel to Europe to purchase, Kaufelt explained that even the definition of the category is beginning to change.
“Cheese is an affordable luxury, but I also think you're seeing the category change — driven partly by the economy, and partly by the nature of the category itself,” Kaufelt said. “We used to distinguish between artisan and specialty cheeses vs. commodity or mass market cheeses. Now we're seeing a blurring of the categories. I'm not saying anyone is mistaking Velveeta for a handmade cheese, but I think a lot of the cheeses that we now consider to be in this category are large-production cheeses.”
As the category continues expanding and becoming more mainstream, Kaufelt, Jenkins and Rispoli all agreed that supermarket retailers still have opportunities to build cheese sales at their stores using a combination of smart buying, good merchandising and regular face-to-face interaction with shoppers.
“You have to get [the cheese] into their mouth,” Rispoli said, describing the necessity of sampling and interacting with shoppers. “Once they taste it, if they like it, they'll buy it. Even with domestic varieties, if people do not know what it is, and they don't know what it tastes like, then they're certainly not going to go out and spend the money on it in this economy.”
Super Foodtown is also using a cheese-of-the-month program, where one cheese is promoted at a “significantly reduced price,” Rispoli added. “There's a lot of good things that come out of that. Obviously, for a customer that may know that cheese, they have a value added to it, and for customers that don't know that cheese, it reduces the price to a level that they might take it home and try it.”
Shoppers may be spooked by the recession, but Jenkins argued that some retailers may have become overly cautious themselves — afraid to urge shoppers to sample and purchase any pricey products in a down economy. Department managers should not forget that there is still an art to selling, and still some currency in positioning your associates as experts.
“People are not cutting back — if anything, people are splurging on their artisanal cheese purchases,” Jenkins said. “It's a matter of which one you're pushing that you're going to be successful with. You can't rely on a customer to make up his or her mind by themselves. You have to do it for them. All of this business that our industry always says, ‘Do what the customer wants.’ That's all horse [hocky]. Customers want to be told. If you're wanting to sell artisanal cheeses at $36 per pound, then you're going to sell them in this climate no matter what, because you're a good cheesemonger, and the cheeses that you're trying to make the sale on are terrific cheeses.”
The category has a promising road ahead, Kaufelt argued, because its growth is really a subset of several bigger trends: the growth of natural and “whole” foods, the growth of greenmarkets and the popularity of small-batch food production, the rise of food as a social activism issue among college students. These trends all point to a sharpening focus, especially among young people, on how food is made, where it comes from, how it tastes and how it is best enjoyed.
“On the other hand, there is a trend of trading down,” he said. “There are definitely people who will not spend the extra money. It's the retailer's job to offer them something that's affordable. We do know that they want affordable luxuries, and so it's our job to satisfy that need and that demand. What we want to do is get away from the whole idea of ‘gourmet’ or ‘artisanal’ or ‘elitist,’ and just have good food. That trend will continue, because the generation that's coming up, these kids are more and more interested in that.”