• by Karlene Lukovitz  @KLmarketdaily, March 10, 2010

Sales of natural and specialty blended cheeses continue to show healthy growth during the recession, even as their prices have risen substantially, according to a new Packaged Facts report.

Natural cheese retail prices jumped by 12.8% between 2007 and 2008 -- yet dollar sales were up 13.6% and units were down just 0.3%, according to IRI data cited in the report,"Natural and Specialty Cheeses: The U.S. Market and a Global Perspective."

Packaged Facts analysts estimate that natural and specialty blended cheeses (the latter are upscale cheeses typically merchandised in the gourmet cheese case) had a combined compound annual growth rate of 6.6% between 2005 and 2009, to reach $14.1 billion. They also project a 3.4% combined CAGR for the categories between 2010 and 2014, pushing sales up to nearly $17 billion.

Consumers are buying more cheese at both "value" and premium levels, in part because of the continuing trend to more eating at home. On the premium level, some consumers are spending on high-quality cheeses as a trade-down from eating out, while others view such cheeses as "the ideal splurge," the analysts observe.

But the number one driver of growth within the retail distribution channel is Americans' interest in exploring the continually expanding varieties of international and domestic cheeses available, stressed Packaged Facts publisher Don Montuori. "Unfortunately, this curiosity synchronized with the recession, so exploration isn't as aggressive as it could be -- but stay tuned."

Private-label natural and specialty blended cheeses gained over five percentage points of share between 2005 and 2009, to reach 44%. Not surprisingly, private-label brands showed the largest share gains within the natural cheese and shortening/oil categories, which consist of commodity-like products (chunks and shreds of cheddar, mozzarella etc. ).