Article Archive - March 30, 2007

At breakfast, lunch or dinner, cream cheese a consumer hit

Editor’s note: Each month, CMN profiles a different cheese, giving our readers a comprehensive look at production, marketing and sales, as well as any other interesting details we can unearth. Please read on to learn about this month’s featured cheese: cream cheese.

By Amelia Buragas

MADISON, Wis. — It’s a cheesemaker’s dream — a product that has a place at breakfast, lunch or dinner and everything in between. It’s the main ingredient in a number of desserts, makes baked goods more appealing and even works as a stand-alone snack. Cream cheese truly is a product that has pushed its boundaries and continues to be loved and trusted by consumers.

• American original

According to the Wisconsin Milk Marketing Board (WMMB), cream cheese is an American original that became popular in the 1880s. Around that time, dairy facilities underwent a revolutionary change with the invention of the separator, which made it possible to separate the whey from hot solids. This process allowed cheesemakers to pack the curd hot — doubling the shelf-life for finished cheese products.

Kraft Foods credits an unknown dairyman in Chester, N.Y., for developing cream cheese in 1872. In 1880, A.L. Reynolds, a New York cheese distributor, began distributing cream cheese wrapped in tin foil wrappers and called it Philadelphia brand. According to Kraft, the name Philadelphia cream cheese was used because at the time city of Philadelphia was associated with the production of high-quality food items. Food products often were referred to as being “Philadelphia quality,” Kraft says.

Cream cheese has a creamy white color, a rich, nutty and slightly sweet flavor and a smooth and creamy texture. The federal standards of identity list a maximum moisture content for cream cheese of 55 percent. The most popular variety of cream cheese is plain although the product also is available in a wide variety of sweet and savory flavors such as strawberry, blueberry, raspberry, pineapple, garden vegetable, salmon, roasted garlic and jalapeno.

In the United States, lowfat versions of cream cheese often are marketed as Neufchatel. Mainstream consumers have come to accept this nomenclature as being synonymous with lowfat cream cheese. Gourmets, however, should be warned not to confuse Neufchatel with its namesake — a soft-ripened cheese from the Normandy region of France. French Neufchatel resembles Camembert and is available in a variety of shapes, including small hearts. Its production dates back to the 11th century and it has name-protected status in the European Union.

The most common use of cream cheese in the United States is as a topping on bagels. However, Kraft reports that in many European countries cream cheese is eaten as a cheese rather than a spread. In Italy, for example, chunks of cream cheese are served in salads.

• Keeping it fresh

In recent years, companies have been pushing the boundaries of cream cheese and its usage. Scores of new products featuring cream cheese are following the national food trends, especially when it comes to convenience items.

Sugar Brook Farms, Verona, Wis., is using cream cheese in the company’s latest dessert offering. Sugar Brook Dessert Balls have a base of cream and butter cheeses and an outer layer of peanuts or almonds. The dessert balls are available in a variety of flavors including chocolate chip, cherry chocolate chip and peanut butter chocolate chip.

Kelly Longseth, sales manager, Sugar Brook Farms, says cream cheese was an ideal base for the new product because of its sweetness, spreadability and likability.

“Having the cream cheese makes people think more of a dessert product than a traditional cheese ball,” Longseth says.

Sugar Brook Dessert Balls have been on the market for approximately three years and Longseth says consumer are “really starting to pick up on them.” Longseth says sales are concentrated during the holidays, but that year-round demand is increasing. The company also is in the process of adding an online store.

Longseth says Sugar Brook Farms also adds cream cheese to its Sugar Brook Chedda Spreads product line to create a product that is “really creamy and spreadable.”

Kraft Foods also recently introduced a new cream cheese-based dessert product. In 2006, Kraft began a limited launch of the Philadelphia Ready-to-Eat Cheesecake Filling. Basil Maglaris, senior manager of corporate affairs, Kraft Foods, reports the product has been well received by consumers and that distribution continues to expand nationally.

“One of the most significant trends in today’s market is that consumers are leading increasingly busy lives and have more limited time for meal preparation,” says Maglaris. “Yet they still value enjoying a meal prepared at home.”

The ready-to-eat filling requires no baking, chilling or mess — consumers simply spread the filling into a crust and have an instant cheesecake. Maglaris says the ready-to-eat cheesecake filling meets Kraft’s strategy to provide consumers with “component to complete” quick meal solutions.

Blaser’s USA Inc. is adding unique flavors to its cream cheese spreads in order to find a niche in the market, says company President and CEO Tony Curella.

“Ours is a specialty, artisan product,” Curella says. “We tried to duplicate flavors that were not out on the market vs. just a basic strawberry.”

The goal was to create a product that tastes exactly like its name, Curella says. So that if a consumer puts some of the company’s Creamy Carrot Cake Spread on a cookie, they have instant carrot cake. In addition to Creamy Carrot Cake, Blaser’s Cream Cheese Spreads are available in eight flavors: Golden Honey Walnut, Honey Lemon Poppyseed, Pineapple Key Lime Pie, Blueberry Cheesecake, Bacon Pecan Cheddar, Garden Fresh Veggie and Strawberry English Trifle.

Curella says the cream cheese spreads have been well received on the foodservice side with restaurants using them in a bagel bar or chefs using the spreads in pastry bags to create unique appetizers.

Curella says cream cheese is a tough market and that smaller companies like his have to use ingenuity and creativity to take on the massive brands like Philadelphia. Curella says he has “great hopes” for the cream cheese line and notes that Blaser’s recently redesigned the product’s retail packaging as well as repositioning it from the dairy case to the deli.

Other new products that feature cream cheese as an ingredient include Safeway’s Single Serve Mascarpone Cheesecake, Target’s Archer Farms Apple Almond Pastry Pocket, Wal-Mart’s Sam’s Choice Gooey Chocolate Decadent Dessert and Weight Watchers’ Smart One Strawberry Cheesecake.
According to the Mintel Group, kosher is the No. 1 positioning claim for U.S. products that use cream cheese as an ingredient, followed by convenience and all-natural.

• That’s a lot of bagels

Kraft’s Philadelphia brand cream cheese is the category leader not only in the United States but Canada, Germany, Italy and the United Kingdom and has more than $1 billion in annual sales worldwide. Philadelphia cream cheese also is available in Holland, Spain, Scandinavia, Hong Kong, Japan, the Philippines, Saudi Arabia, Australia, Singapore, South Korea and Venezuela.

In the United States, production of cream cheese (including Neufchatel) was up 2.4 percent from 1995 to 2005, according to data from USDA’s National Agricultural Statistics Service. Total U.S. production of cream cheese in 2005 was 692.4 million pounds, up from 543.8 million pounds in 1995.

However, within this time frame there were many ups and downs in production. From 1996 to 1997, for example, production increased 7.0 percent from 574.7 million pounds to 614.9 million pounds.

Production increased an additional 6.7 percent from 1999 to 2000, only to decline 6.2 percent from 2000 to 2001. In recent years, production increases and decreases have leveled off with a 1.4 percent decline from 2002 to 2003, a 3.3 percent increase from 2003 to 2004 and a 1.0 percent decrease from 2004 to 2005.

Consumption of cream cheese has shown a general upward trend during the same time period. Per capita consumption of cream cheese was 2.33 pounds in 2005, compared to 2.04 pounds in 1995 — a 14 percent increase. However, per capita consumption of cream cheese peaked in 2002 and 2004 at 2.38 pounds per person.

According to WMMB, the retail segment accounts for nearly half of all cream cheese sold in the United States, accounting for 49 percent of channel usage. Food processing accounts for 30 percent of sales and foodservice accounts for the remaining 21 percent.

Total grocery retail sales of cream cheese are down 0.3 percent, according to Information Resources Inc. scanner data from 2005. Total sales in 2005 were 240.3 million pounds compared to 241.1 million pounds in 2004. Exact weight cream cheese accounted for 99.9 percent of sales.

Grocery retail sales of plain cream cheese stood at 206.8 million pounds, down 1.1 percent compared to 209.1 million pounds in 2004. Exact weight sales accounted for the vast majority of the market while random weight sales only accounted for 0.1 percent of plain cream cheese sales.

Sales of flavored cream cheese represent a smaller segment of the market at 33.6 million pounds in grocery retail sales in 2005. However, this represented a strong 4.8 percent growth compared to 32.0 million pounds in 2004. This was the strongest growth recorded for flavored cream cheese in the past four years.

Plain cream cheese, however, experienced the largest decline in four years, which offset the growth in the flavored category, for an overall category decline in grocery retail sales of 0.3 percent.

CMN

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