The Moon is made of blue cheese – official
Well it’s as accurate as the statement by Mr Darling Chancellor Of The Exchequer who pronounced “the fall of Sterling is having no discernable effect on the UK economy” in late last year.
Crashed by over 27%
A glance at the attached chart will give a lie to that comment, and any doubt that Sterling's fall against the euro, the dollar and other currencies will have a huge impact on costs. Nearly 30% of our cheese is imported whether from Ireland, France, Italy, Germany, Spain or other euro currency suppliers, and from a level of €1.44 to the £ less than 15 months ago, it has crashed by over 27% pushing prices up further for the UK shopper.
Source – BBC.CO.UK
Europe will see a steady fall in milk prices in the coming days, weeks and months, but frankly not to a level of 27%.
Maybe its an opportunity for British farming, but battered and ignored for the past 11 years, it’s largely been left to its own devices to sort out the issues, and the prospect and reality of a decline in milk prices in the UK, may well force many farmers to simply call it a day, and seek other less stressful ways of earning a living – like working for the government.
The British consumer
So what can the retail seller of cheese, the British consumer and the cheese maker expect in early 2009?
Well frankly, no one is entirely sure. Christmas was a patchy affair for some retailers, with some reporting brisk sales, and others simply not seeing enough customer footfalls.
Makers seemed able to cope with demand comfortably enough, with rumours that built up and cancelled stocks and orders are still in the system or storage.
The shopper as always will decide, and the great and good have begun their guessing games, predicting reduced spends in restaurants, but more take away and more in home eating and entertainment.
Some predict a return to established “value” brands, old favourites, trusted and reliable, whilst in contradiction others say that value alternative types will now take centre stage as the shopper becomes more and more cost conscious, and that premium products will suffer most.
It will likely as always be a bit of each, but the first 60 days of the year will be critical in establishing the direction, and doing nothing is not an option.
Bradbury’s have worked before Christmas with many of their suppliers to prepare a range of offers, both value and premium to intrigue as well as meet shoppers needs for quality, but above all value.
So what types might emerge as the winners in 2009?
On the value front our own Simply range, currently being redesigned, will offer some super value favourites that will hit key price points and send the shopper home happy, whether from the deli counter or the pre-pack shelf.
On the additive front, the two established types of Stilton and Apricot and Wensleydale and Cranberry will I believe take a bigger share of a now confused and undermined quality sector, but these two will need still to combine high quality with a price offer, as shoppers reduce their treat spending. Some of the well known simpler savoury cheddar types too may well thrive.
Continentals will evolve as either truly specialist unique types, like Gorgonzola, Parmesan, Vaccherin Mont D’or where people will pay for that uniqueness, or it will be about value offers such as standard Mozzarella, or key Continental brands. Those types who have higher cost aspirations and little speciality credentials will be damaged by exchange rate and not meet the shopper’s expectations of their price/value judgement.
Some bulk brands of mature cheddar have traded high and their “brand tax” and pack size will possibly separate them from customers who want quality, value but at a pack and size they can afford. Saxon Cross continues to grow steadily as its loyal band of followers appreciates the flavour and pockets the value
Whatever emerges from the opening of the year, what is probably certain is that the shopper will have less to spend, will spend it more wisely than ever, probably less frequently on treats or premium lines, will possibly dine at home more often, and ensure a great deal less waste of food and possibly even change where they shop and when.
All of these add up to changes, though their impact is yet unclear. There may be unusual winners as more local shopping may be a side benefit. However supermarket shopping may be less often but bigger spend. Price driven offers may attract many, that overlooked them before but now must control their spend more effectively. On the other hand, eating at home may benefit luxury and premium lines as people try to replicate that dining out experience.
Keep and eye out for change – oh and that blue moon made of cheese
George Paul Managing Director Bradbury and Son
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