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Featured ArticlesDairy Deli Bakery: Driving Category Growth

Dairy Deli Bakery: Driving Category Growth

Dairy | Deli | Bakery
Grocery Business delves into changing consumer wants and needs, and how retailers can drive higher traffic in their stores and online

Taking cheese to the next level

Cheese is an all-time favourite with consumers, and for 86% of Canadian shoppers, it’s a planned purchase, according to a Caddle cheese shopping insights survey, but shoppers today are focused more than ever on value, says Joe Dal Ferro, president of Finica.

image of a Joe Dal Ferro
Joe Dal Ferro

“The cost of living has forced Canadians to revisit their buying habits. They’re looking for value propositions. This is being compounded by consumer demand for sustainable products, so it creates a dual challenge for suppliers.”

Having said that, suppliers say cheese is one category where consumers still expect to see innovation, and many suppliers are bringing out creative portfolios with new flavours and formats. A recent innovation that emerged last year is crunchy dehydrated cheese snacks made from 100 per cent cheese; several companies have launched variations on this, combining nuts and different flavours for on-the-go high-protein snacking.

Growth drivers

Flavour and taste exploration, the quest for healthy foods and value seeking continue to drive innovation.

image of a Iva Barukcic
Iva Barukcic

“We are seeing line extensions focused on functional benefits, new flavours and value pack sizes,” says Iva Barukcic, vice president of consumer and market insights, strategy and innovation, of Saputo Dairy Products of Canada. “With flavours, we continue to see interest in spicy and smoky options along with more gourmet flavours in the deli. We are seeing the introduction of larger value packs to offer cost-conscious consumers more ways to save.”

image of a Monika Giasson
Monika Giasson

Monika Giasson, brand manager for Gay Lea Foods Co-operative, adds that clean labels, functional benefits, such as lactose-free or fat-free, and sustainably sourced and packaged products are driving growth, particularly in the cottage cheese and sour cream categories.

“Both are experiencing growth due to changing consumer preferences, dietary trends and innovation in product offerings,” she says, citing the company’s Nordica cottage cheese, which is experiencing double-digit growth, and its 18% Premium Gold sour cream and lactose-free products.

Emerging trends

Expect to see creative iterations of products offering functional benefits and appealing to different dietary preferences, says Giasson. She advises that retailers can benefit from these trends by providing the right product mix “to cater to different consumer preferences and budgets.”

Barukcic says Saputo expects to see consumers becoming more open to exploration and less focused on essentials. “Value will still be important, but the weight of price in the value proposition should ease.” She adds that sustainability, health and wellness, global flavours and more exploration in texture “will elevate the overall cheese experience.”

Yogurt: Adapting to market needs

Yogurt has undergone a makeover in recent years in response to evolving consumer needs. In the past two years, suppliers have introduced a range of iterations, from high-protein products with unique flavour pairings inspired by desserts and multicultural cuisines, to new snacking yogurts in different formats. With market forecasts of 5.29% CAGR between 2024 and 2028 and estimated total revenue of $2.4 billion in 2024, according to Statista, expect to see continued innovation in the category.

image of a
Eric Maffert

Yogurt is finding a place as a multi-use food or ingredient, says Eric Maffert, senior director of marketing, yogurt category, for Danone Canada.

“More people are also using yogurt as an ingredient, looking for nutritious swaps – whether it’s using yogurt in dips, sauces, smoothies, or Lebanese cuisine, it’s used more frequently in households today and we are seeing a lot more awareness of its versatility. Beyond the usages, consumers are also looking for nutritional density and products that deliver health benefits such as gut health, high protein, low sugar and fibre.”

Frederique Delagrave, senior director of yogurt for General Mills Canada, adds that in addition to the high-protein, low-sugar trend, “high taste remains a key consumer expectation, and delivering on all three (high protein, low sugar, high taste) is the largest opportunity and biggest challenge. However, consumer needs vary by occasion and consumer profile. Many prefer high protein and no added sugar for their morning routine, while others are looking to yogurt as an indulgent treat later in the day.”

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