UK cheese market hit by lack of NPD spend

23-Mar-2012 - Last updated on 23-Mar-2012 at 14:13 GMT

Lack of NPD spend in the UK cheese sector has hit sales, according to one expert

A lack of investment in new product development (NPD) and support for brands has hit sales in the UK cheese sector, according to a leading industry expert.

Retail analyst, Jonathan Banks, president of Jonathan Banks Associates, told FoodManufacture.co.uk that manufacturers’ increased emphasis on promotional activity over the last three years had stifled NPD and affected the quality of many known brands.

He said: “One of the main things manufacturers are doing wrong is that they’re not putting enough effort into NPD. What has genuinely been new in the market in the past 10 years?

A few sliced, grated or low fat options but I’m not sure what I’ve seen that is really genuinely new, and it has certainly hit sales for some UK producers."

Ratio of advertising

Lack of marketing support for their brands was another failure of cheese manufacturers, he said.

“If we look at the ratio of advertising, or any above the line spend, to turnover, then I would argue that in cheese, it is probably too low.”

Speaking at the Cheese Packforum in Paris on Wednesday (March 21), Banks also predicted a rise in own-label cheeses as a result of the manufacturers’ strategies.

“I can certainly see a rise in own-label cheese over the next few years as the retailers become more professional in the way they market their products,” he claimed.

“In the UK, it goes beyond better and best. Now you have other things as well, be it organic or healthy eating. You get all these other sub-brands taking up more space on the shelves and away from the manufacturers.”

Positive results

But Dairy UK rejected Banks’ view and claimed that many firms’ investment in NPD had produced positive results in the market.

Simon Bates, communications director at Dairy UK, told FoodManufacture.co.uk: “Our members are very clear that they have invested a lot in NPD, specifically in low fat. This has resulted in leading market growth for their brands.”

Meanwhile, analysts also predicted that cheese imports could be a way to restore a struggling dairy market in the UK.

Experts said that the UK sector had been hit as a result of soaring prices set by international firms.

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