U.S. Cheese Market Size, Share and COVID-19 Impact Analysis, By Type (Natural and Processed), Form (Block, Spreadable, and Others), and Product Type (Cheddar, Mozzarella, Roquefort, Stilton, Parmesan/Parmigiano-Reggiano, Ricotta, Munster, Feta and Others), 2022-2029

The U.S. cheese market size was USD 38.98 billion in 2021. The market is projected to grow from USD 40.73 billion in 2022 to USD 55.95 billion by 2029 exhibiting a CAGR of 4.64% during the 2022-2029 period. The global COVID-19 pandemic has been unprecedented and staggering, with cheese experiencing a lower-than-anticipated demand across the U.S. compared to pre-pandemic levels. Based on our analysis, the U.S. cheese market share had exhibited a decline of 8.88% in 2020 as compared to 2019.

The growth of the market in the United States is attributed to the increased demand for ready-to-eat food products such as sandwiches, snacks, and other similar food products. In addition, the country is heavily investing in upgrading and expanding its production facilities with the abundance of raw materials. Thus, increased adoption of cheese in the food industry positively impacted the market's growth. 

COVID-19 IMPACT

Supply Chain Disruptions Caused By COVID-19 Pandemic Negatively Impacted the U.S. Cheese Market Growth

The COVID-19 crisis resulted in a decline in sales of cheese products during the analysis period. The retail sales of the products were significantly impacted due to the lockdown imposed in public spaces to prevent the spread of the virus.

During the pandemic period, as people were forced to stay indoors to prevent the spread of the virus, home-cooking increased significantly. This gave rise to the demand for cheese products such as cream, cottage, and other specialty cheese to prepare a variety of cuisines. The cooking-at-home further increased retail sales of the products, which boosted the market growth during the pandemic. The procurement of raw materials, mainly milk, was significantly impacted during the initial stages of lockdown. The shortage of raw materials further impacted production.

As restaurants and stores were closed, the milk products manufacturers were left with a huge quantity of milk waiting to be processed. The supply chain challenges included increased shipping charges and high labor costs, resulting in dairy shortages for cheese manufacturers. Furthermore, the export of cheese from the U.S. suffered during the initial stages of lockdown due to transportation constraints and high costs. This resulted in a decline in sales of cheese products from 8.88% in 2020 to 4.44% in 2021.  

LATEST TRENDS

Changing Dietary Preferences Among Consumers in the U.S. To Propel Market Growth

Natural cheese products free of preservatives are becoming highly popular among consumers. Dieticians also recommend that consumers incorporate natural food products as a part of their dietary regime. Due to the increased demand for such products from the end consumers, U.S. cheese manufacturers such as Kraft Foods launched natural, chemical-free products for health-conscious consumers.

Furthermore, cheese products appeal to consumers as they can be easily included in the diet without additional cooking. Natural cheese products can be easily added in the form of spread on toast and crackers. Hence, these products are highly appealing to younger consumers.

DRIVING FACTORS

Increased Demand For Convenience and Nutritious Food Products Among Consumers To Promote Market Growth

Cheese is one of the primary ingredients used for food products such as sandwiches, pizza, and similar products. In the U.S., the popularity of such food products led to increased sales of cheese products. As per data provided by The Food XP, the U.S. ranks second amongst the most pizza-consuming nations globally. Moreover, the various restaurants and food chains also introduced a wide selection of cheese-based snacks and food products in the market for cheese lovers.

Some cheese manufacturers undertake initiatives such as promotional campaigns, free trial opportunities, and discounts to entice customers to buy their products and increase sales of cheese products in the market. Launching special cheese products for festive occasions also boosts the sales of cheese products and leads to the market’s growth.  

Strong Demand For U.S. Cheese Products In Other Countries To Boost Growth

The dietary pattern of developing economies is changing rapidly. With rapid industrialization and urbanization, the disposable income of the population has increased significantly. Hence, a large segment of consumers is spending on food items that are convenient and readily available. This has increased sales of cheese slices to prepare sandwiches, salads, and other similar easy-to-prepare food products. The rising adoption of western food habits in China and India has resulted in the growth of the region's pizza and fast food restaurant market. As these products are made of cheese, the export of U.S.-based cheese products increased significantly in those regions. As per data provided by the U.S. Dairy Export Council, around 356,185 metric tons of cheese were exported to other countries from the U.S. in 2020.

RESTRAINING FACTORS

Adverse Health Impact Due To Over Consumption of Processed Cheese Products To Negatively Impact Market Growth

There are several negative health implications associated with the consumption of processed and ultra-processed cheese products. As these products contain high salt and calorie content, the over-consumption of cheese cause atherosclerosis, increased cholesterol, and cardiovascular disease risk. Thus, consumers suffering from chronic ailments prefer to consume fewer cheese-based products as a part of their diet. Furthermore, the younger generation who adopted a health-conscious diet also prefers natural cheese products leading to a decline in sales of processed cheese products.

Additionally, the production cost of cheese products is also very high. Small scale manufacturers suffer from low brand image compared to major market players, due to which they suffer from lower profit margins. As the storage of cheese products is difficult, the use of expensive packaging materials led to an addition in production cost. A certain segment of consumers is thus reluctant to pay a premium price for these products leading to reduced sales and market growth.   

SEGMENTATION

By Type Analysis

Natural Cheese Segment to Dominate the U.S. Cheese Market Due to its Healthy Nature

Based on the type of cheese, the market is segmented into natural and processed cheese.

The demand for protein-rich products among consumers, especially the younger generation, increases rapidly. Cheese products are a rich source of protein and calories, making them favorable. Among these cheese products, natural products composed without the addition of any preservatives are perceived to be healthy. Hence, the consumption of natural cheese products has increased significantly in recent years. 

Although the sales of processed cheese have declined in recent years due to their easier storage options and higher shelf life, these products are preferred to prepare snacks. This results in increased sales of single slice cheese products. 

By Form Analysis

Block Cheese Is Witnessing Promising Growth As It Can Be Stored And Transported Easily

Based on the form, the market is segmented into spreadable, blocks and others. The shape of cheese products largely depends on the type of cow milk used, manufacturing process, moisture absorption, and cost of production.

Among these shapes, the block cheese segment accounted for the largest share during the analysis period. Manufacturing cheese in blocks makes it easier to stack and transport the products over long distances. This makes block cheese a favorable choice in the foodservice industry. Such industries purcase billion pounds of products that are used for preparing various food products. 

Apart from blocks, the demand for convenience food products has increased sales of other cheese forms, such as spreadable cheese. As different cheese shapes can be easily used to prepare on-the-go snacks products, the demand for spreadable cheese, slices, shreds, and crumbles is rising steadily among the younger cohorts. Hence, these products are made available to consumer through various distribution channels which include both onine and offline channels.

By Product Type Analysis

Parmesan/Parmigiano-Reggiano Segment To Exhibit Strong Growth Owing To Its Unique Taste

Based on product type, the market is segmented into mozzarella, cheddar, parmesan, and feta, among others.

Among these product types, the Parmesan/Parmigiano-Reggiano cheese products are projected to grow significantly during the forecast period. These cheese products are manufactured using a strict production process that helps maintain product quality and consistency. Furthermore, the taste of these products varies from one region to another depending on the soil and the climate, making them unique. This makes the product highly favorable among cheese lovers.

With the growth in the foodservice industry, the demand for other cheese varieties such as stilton, Roquefort, mozzarella, and cheddar is also rising rapidly among the consumers contributing to the U.S. Cheese market’s growth.

KEY INDUSTRY PLAYERS

Key Players Are Investing In Expanding Their Product Lines To Expand Their Cheese Product Portfolio

This market is moderately fragmented, consisting of several major and minor cheese companies. Some prominent players include Dairy Farmers of America, Inc., The Kraft Heinz Company, Saputo, Inc., Land O' Lakes, and Royal FrieslandCampina N.V. These companies have a significant presence in the cheese market to their vast distribution network and enjoy strong brand loyalty among the consumers. With the rising demand for high-quality cheese products in the market, companies are launching unique cheese flavors and forms to enlarge their market presence. Due to intense competition, collaboration and acquisition of smaller companies have increased significantly in recent years. Moreover, the increased use of cheese in the foodservice industry created an opportunity for market players to invest heavily in expanding product lines and increasing their sales in the market. For instance, In February 2019, Dairy Farmers of America (DFA) launched a new cheese brand, Craigs Creamery, collaborating with eight farm families from the New York area. The line consists of cheeses such as cheddar, mozzarella, and muenster are available in shreds, slices, chunks, and snack bars.

LIST OF KEY COMPANIES PROFILED:

• Lactalis International (France)


• The Kraft Heinz Company ( U.S.)


• Glanbia Plc  (Ireland)


• Arla Foods amba (Denmark)


• Dairy Farmers of America, Inc. (U.S.)


• Saputo, Inc. (Canada)


• Land O’ Lakes (U.S.)


• Hilmar Cheese Company, Inc. (U.S.)


• Royal FrieslandCampina N.V. (Netherlands)


• Fonterra Co-operative Group Limited (New Zealand)

KEY INDUSTRY DEVELOPMENTS:

• August 2021: Dairy Farmers of America, Inc. introduced a new cheddar cheese curd flavor in the market, namely, green onion. This product helps the company to target squeaky cheese lovers in the market.


• October 2020: Fonterra has signed a sales and marketing agreement with Land O'Lakes, Inc., one of America's leading dairy cooperatives, to expand its U.S. Foodservice business. The agreement will allow Fonterra's foodservice products to be distributed in the additional U.S. foodservice outlets.

REPORT COVERAGE

The market research report provides a detailed analysis of the market and focuses on key aspects such as competitive landscape, types, form, and product type. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors contributing to the market growth in recent years.

Report Scope and Segmentation