The Interview - Lactalis McLelland's 'Seriously': driving the cheddar market
Leading UK dairy company Lactalis McLelland, incorporates the former Lactalis UK & Ireland operation, with its portfolio of high quality continental dairy brands including Prˇsident, Sociˇtˇ and Bridel, and the former A McLelland & Son Ltd, the Glasgow-based cheese maker famous for its SeriouslyØ cheddar brand, with UK sales of over £60m. Lactalis McLelland as it is now came into being in January 2005, when Hugh Irvine and his family sold McLelland to the Lactalis Group. Since then, the combined company has been investing heavily in the 'Seriously' brand and the cheddar cheese market overall, with the recent launches of Seriously Smooth and Seriously Strong Spreadable. Renˇe Milkop-Kerr, Lactalis McLelland Marketing Manager, looks after the marketing of the Lactalis McLelland cheddar business. Renˇe spoke to The Grocery Trader.
The Grocery Trader - First question: how big in value and volume terms is the UK cheese market, and how fast is it growing? What's driving it?
The retail cheese market is worth £1.9bn and growing 3.4% annually. Volume growth is 1.2% (all figures TNS 52 weeks ended 13 August.) Cheddar is the key driver, with further stimulation coming from products targeting snacking and convenience.
GT - What proportion of UK cheese retail sales are cheddar?
Cheddar is just over 50% of the cheese market and holding steady in line with the overall cheese market growth. Some smaller non-cheddar cheese categories - Feta, Mozzarella, Blues and UK territorials - are growing faster but Cheddar continues to dominate, and we expect the picture to remain the same for the foreseeable future.
GT - What proportion of overall cheddar sales are mild/medium?
Mild/medium is 28.8% by value and 35% by volume. The big market is in Mature, with around 40% by value and volume. Extra mature is 13.9% value and 12.4% volume, Farmhouse is 6% and Vintage 3%.
GT - What do you define as ŌStrong' Cheddar, and is its share growing?
We classify Strong as Extra Mature. Mature, Extra Mature and Vintage are all growing, ahead of the milder cheddars.
GT - Why do you think this is happening?
Consumers' tastes are changing to stronger flavours generally. Also, the big brands' marketing activity concentrates on the "Maturer plus" sector, hence our launch of Seriously Smooth, to add branding in the mild sector and bring some fresh excitement to this area.
GT - How and when do we eat cheddar cheese in the UK?
Cheddar cheese is a shelf staple product for UK consumers. Most of us buy cheddar every week, and it's used for a host of foods, in particular sandwiches, snacks, soup and pasta. In research consumers named at least 20 recipe occasions, but the biggest single occasion is lunchtime, in sandwiches.
GT - Is the way we use cheddar changing as we move towards more convenience?
Yes, it is. As people become richer but more time poor, the trend is to cut down the time we spend making meals so cheese needs to be more convenient to use. Hence weÕve developed our slices for sandwiches and grated packs for cooking, so people donÕt have to get the block out. People only spend 19 minutes now to prepare their evening meal, and weÕre doing all we can to help.
Sales of grated and sliced cheddar are growing 20% annually. These options give portion control, and allow people to handle more crumbly varieties without waste. Having said that, block cheddar remains by far the biggest part of the market, with 96% of sales.
GT - What are the seasonal peaks for cheddar sales?
Cheddar is a consistently high seller all year round, with no seasonal variation. Sales of Cheeseboard Cheddars increase pre-Christmas, alongside sales of continental cheeses, but they're a niche segment.
GT - Have UK cheddar sales been affected by health and obesity concerns? As cheddar marketers, how have you responded?
Cheddar sales continue to grow year on year in line with the overall market, so from our viewpoint there's no visible impact so far from health and obesity. Consumers still regard cheddar as a wholesome food for themselves and their kids, and an excellent source of calcium and protein. But we're also hearing that some consumers who need to eat less cheese for medical reasons are moving to stronger cheeses in cooking and eating, and this group presents a possible future marketing opportunity.
GT - When was the Seriously brand created?
McLelland's owners created it ten years ago. The story goes that when they were sampling a stockpile of good cheddar, someone said, "That tastes seriously strong!" The phrase has stuck and become part of our marketing proposition.
GT - How big is the Seriously brand now in value and volume? What share of the UK cheddar market does it have? How fast is it growing?
Seriously was worth £57m at retail in the 52 weeks ended 13 August, up 12% on last year, with a volume of 10,614 tonnes. Seriously has 16.9% value share of branded cheddar retail sales.
GT - How would you sum up the Seriously brand proposition?
Seriously is all about taste. We offer a range of products at the top end of the market, which all communicate what flavour you're going to get, in a clear and simple manner. We don't use common industry terminology on our packs, but aim to meet consumers' expectations with three core products and a spreadable option.
GT - Why stock Seriously as opposed to other cheddars?
The key difference is that we set out to offer a range of clearly defined products, with very different flavours and very distinctive packaging. We're the UK's second largest cheddar brand and we're succeeding!
GT - Who is the Seriously brand aimed at? How does it function?
Our products' demographics are very specific. Strong and Farmy are aimed at 45+ ABC1's and Smooth is a family proposition, while the convenience products and 'Spreadable' are aimed at time-poor people. Seriously presents a distinctive flavour hierarchy that consumers can trust to meet their family's taste requirements, especially households wanting several different cheddars.
GT - Do you supply the foodservice industry? What about own label?
We can, and do, supply foodservice clients, but our main focus remains retail. We are happy to talk to our branded retail customers about own-label, and take a balanced approach to the overall business in each account.
GT - What are your commercial goals for Seriously cheddar in the UK market?
We want to grow our brand and market share, have our own distinctive position in the market, and respond to consumer needs. To this end, this year's launch of Smooth and repackaging of Farmy are all about establishing clear positioning, growing the market and reinforcing the brand.
GT - Merchandising is key to optimum cheddar sales. How do you work with retailers in category management to maximise the cheddar opportunity?
We set up a category management team last year. We also launched 'Seriously' in retail-ready packages, in units that retailers can use more easily in all store types.
GT - Where are the Seriously cheeses made? How many people are employed in making and packing them?
Seriously Strong is made in Stranraer in Southwest Scotland; Seriously Smooth and Seriously Farmy are made in Wales from Welsh Cheddar; and Seriously Strong Spreadable is made from Scottish Cheddar but produced in France. We have around 300 staff in the Lactalis McLelland business across the UK.
GT - What quantity of milk goes into Seriously cheeses?
Around 10 litres of milk go into every kilo of finished cheese.
GT - How do you handle UK sales and distribution for the Seriously brand?
We have sales teams in Glasgow and London. Our distribution and logistics are handled through various third party logistics providers.
GT - What current products are in the Seriously cheddar portfolio? What are the best selling Seriously products?
Seriously Strong comes in 250g, 400g and 500g blocks. We also offer red versions for the Scottish market. Seriously Strong Grated and Sliced come in 200g and 150g packs respectively. Seriously Smooth comes in 200g and 400g blocks, Seriously Strong Spreadable is in 125g tubs, and Farmy is in 200g and 400g blocks. Seriously Strong 250g is our biggest selling SKU.
GT - You recently launched Seriously Strong Spreadable and Seriously Smooth. What are they like? How are they selling?
Spreadable is aimed at adult consumers of spreadable cheeses who want authentic tasting cheeses with stronger flavours. It's ideal for sandwiches, on crackers, dips, hot dips, baked potatoes - everything you can think of. Sales are way ahead of forecast.
Seriously Smooth is a creamier partner to Seriously Strong. It has its own distinctive flavour and is easy to grate and slice. ItÕs already a £3.9m brand.
GT - You've changed the Seriously packaging design recently. What was the rationale? Who designed it?
Our research post-acquisition showed we needed to make some modifications to the core brand. The key was to liven up and soften the design and add more descriptors. Our in-house designer led the redesign: he has been working on the Seriously brand for several years.
GT - You've also changed the name of Seriously Strong Farmhouse to Seriously Farmy. Is Farmy a 'farmhouse' cheese as such?
Yes, Farmy is authentic farmhouse cheddar, made in open vats, with a very strong, traditional flavour. We changed the name because we found that many consumers didnÕt understand the 'farmhouse' proposition and confused it with Seriously Strong. Farmy is distinctive and different - we're helping to make more people aware of farmhouse cheddar and, importantly, encourage them to try it.
GT - The current Seriously packaging features a rosette, reminiscent of an award symbol. Has Seriously won any quality awards over the years?
Yes, we've won many awards. Last year we won gold at the Royal Highland Show, Silver at the World Cheese Awards and Silver at the British Cheese Awards. Our cheddars are loved by consumers and judges alike.
GT - I understand Seriously is 10 years old this year. Which month does the anniversary fall in?
The original launch was in February 1996, and the re-launch was exactly 10 years later, in February 2006.
GT - Did you have any special celebrations to mark the anniversary?
We celebrated with the re-launch and the brand extensions.
GT - What new Seriously products are you planning in 2006?
We're not planning any more this year, but there are further innovations in the pipeline for 2007.
GT - Any plans for any new Seriously non-cheddar products?
We have no specific non-cheddar plans yet, but that could change.
GT - How much are you spending on advertising and marketing for Seriously, and what time of year are you doing it?
Last year our focus was on research and understanding: this year we invested in getting the product and the range right. Next year, starting in the first half of the year, we will be spending money above the line in a big way.
GT - Do you do any sponsorships?
Yes, we sponsor Kilmarnock FC in the Scottish Premier League. Last year their strips featured Seriously: this year itÕs our Galloway cheese, another part of our portfolio. We also sponsored the Supreme Champion category at the Nantwich Show 2006 and the Best Scottish Cheese class in the British Cheese Awards.
GT - I understand you've recently been running a retail sampling campaign for Seriously. Can you tell me about that?
We've been sampling Seriously with major retailers nationwide from August to September. We sampled 90,000 consumers in 65 stores with lumps of cheddar and Spreadable on crackers, and have had 11,500 coupon redemptions so far, a very positive response.
GT - YouÕve revamped the McLelland website. When did it go live, and what's going to be on it?
The new look www.mclelland.co.uk went live from 7 September. It includes a dedicated 'Seriously' subsection, which introduces our products and contains news about them, and in due course will also feature recipes.
GT - Do you export Seriously to any other countries? Are people overseas as keen on cheddar as we are?
This year we've started exporting, initially in small volumes, to various countries including Germany. Cheddar is popular there, and also in many English-speaking countries with a strong British heritage. The aim is to develop Seriously internationally as a concept, and our Scottish heritage comes over well in translation in other countries.
GT - Finally, where do you see the Seriously brand going from here?
Next year we will focus on NPD and continue our commitment to the customer, while establishing the brand with a wider consumer audience. This will help to build on our existing success and add to our presence in the market.
Tel: 0141 552 2962
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