There are cheese varieties, flavors, and textures to match almost every palate, and it complements almost any food or drink. Although cheese has long been favored by nutritionists for its calcium, its fat content has kept it off many dieters’ lists. That trend is changing, though, thanks to high-protein, low-carbohydrate diets and research that shows calcium-rich diets contribute to weight loss. Increased sales of cheese over the past 10 years are credited mainly to foodservice offerings, according to the Wisconsin Milk Marketing Board (WMMB). Dairy Foods magazine advises cheesemakers looking to sell more of their product to market to restaurants. All of these trends point to a consistently growing opportunity to serve quick-service and fast-casual patrons more cheese.

Overall, cheese industry leaders are pleased with the work quick-service and fast-casual operators are doing to incorporate cheese options across their menus. “I would argue that cheese is fairly well developed in how it’s used across meal parts,” says Chris Moore, vice president of food service channel development for Dairy Management Inc. (DMI), the marketing organization and parent company of the American Dairy Association, the National Dairy Council, and the U.S. Dairy Export Council. “With that said, we believe there is tremendous headroom to grow cheese, especially as fast-food restaurants tweak their menus in reaction to growing concern over health and obesity.”

Most consumers say they would like to see more cheese on menus. Six in 10 say they’d like to try new cheeses (WMMB data). And 30 percent of respondents to a 2001 DMI study said they eat cheese once a day or more; 55 percent said they eat cheese a couple of times a week. With Americans consuming an average 31 pounds of cheese in 2003 (USDA)—albeit twice as much as 30 years ago—there is still room to grow in comparison to our European neighbors. France, Italy, Spain, and Greece all count their average per capita cheese consumption at between 40 and 50 pounds per person. “With so many Americans eating out, we feel that partnering with restaurant chains to increase the number of menu items that include cheese will enable us to get to those numbers,” Moore says.

Cheese is used by 93 percent of all quick-service restaurants, and the quick-service segment accounts for more than half (56.5 percent) of all cheese used in foodservice, according to the WMMB, which is funded by dairy farmers. The overall growth of U.S. cheese sales from an $8.8 billion industry in 1997 to an $11 billion industry in 2001 to projections of $14 billion in sales by 2006, is credited in large part to increased offerings in restaurants, according to the WMMB. “Restaurants are really trying to keep up with consumer demand for sophisticated and ethnic flavors. That’s trickling down to fast food and fast-casual,” says Marilyn Wilkinson, WMMB director of national product communication. “As breads have come of age in quick-service, it has led to demand for more interesting kinds of cheeses. And that bodes well for the future. We’re likely to see many more specialty cheeses offered across the fast-food segment.”

The U.S. cheese market includes three main categories: natural cheese (including gourmet and specialty cheeses, ranging from soft to very hard), processed cheese (including American cheese and others made by blending natural cheese with other ingredients), and imitation cheese (processed spreads, cold pack cheese, and cheese products, made with milk or dairy alternative ingredients and additives).

Domestic cheese production has doubled since the 1970s. The United States is now the leading producer of the world’s cheese, generating 30 percent of global volume in 2001, according to Packaged Facts, a publishing division of MarketResearch.com. Increases in demand and growth predominantly have been in the natural cheese category, with consumption of processed cheese and imitation cheese remaining fairly flat since 1990. Wisconsin, the birthplace of Brick and Colby cheese, is the leader in U.S. cheese production, but California, which introduced Monterey Jack, is quickly catching up. Other leading producers are New York, Minnesota, and Maine.

Americans’ favorite cheese is cheddar, according to DMI and the USDA. It’s rare that a food favorite is not the most highly consumed in its category, but that is the case with cheese, thanks to the foodservice industry. American cheese is the most heavily consumed of the cheeses (DMI), simply because most fast-food, and even casual dining restaurants use American as the standard cheese on burgers and basic sandwiches. “Our research shows that if restaurants offered a wider array of cheese choices, consumers would accept those choices,” says DMI’s Moore.

“The main reason quick-serves prefer processed American cheese,” Wilkinson says, “is because it has a beautiful melt and holds the melt. Processed cheese is held at high temperatures when it’s being made. Specialty cheeses are sensitive to high temperatures.”

“Natural cheese is more difficult to work with in the quick-service atmosphere,” says Peter Gibbons, senior vice president for innovation at food marketing agency Noble. Gibbons managed product development at Burger King for three and a half years before joining Noble in July. “Natural cheese doesn’t melt as well, and there’s a limited time to work with it after it’s cut. Also, it’s often twice the cost of processed cheese. That means it needs to deliver twice the value through upcharge,” Gibbons says. “People are looking for more edginess and sharpness. So, there’s a challenge ahead for cheesemakers to deliver more flavorful processed cheeses that mimic the characteristics of high-end cheeses but are easy for quick-service to work with.”

Wendy’s Dairy Commodities Manager J.J. Schultz spoke at the International Cheese Technology Exposition in Wisconsin this year about the needs of quick-service operators. DMI considers Wendy’s a strong partner, given the wide variety of natural and processed cheeses served over the years. “I stressed to the cheesemakers that meltability is one of our needs, but most important is having consistency of product,” he says. “Many cheesemakers will tell you that natural cheeses have variation from one block to the next. But I stressed to them that our customers can’t bite into a nice slice of Colby Jack one day and have the same cheese as tough as a piece of rubber another day.”

Melting quality doesn’t matter on cold sandwiches and salads, categories of opportunity for specialty cheese innovation. “Salads are getting bigger because of the trend toward healthful eating,” Wilkinson says. “That’s opening the door to a lot of cheeses that are more flavorful and add value and an upscale component to fast-food salads.”

“Salads are a great sampling opportunity,” Gibbons says. “What people like about them is they are a smorgasbord of flavors. It’s a good place to introduce something edgy.” Gibbons helped Burger King introduce shaved Parmesan on its Fire-Grilled Caesar and Garden salads. “It’s turned them into high-end salads. The cheese is flavorful and has texture, and most importantly, you can identify it as cheese, not sawdust,” Gibbons says.

Chris Moore commends McDonald’s for topping its California Cobb Salad with crumbled bleu cheese, its Bacon Ranch Salad with a blend of jack and cheddar, and its Caesar with grated Parmesan. “That’s a great example of how a chain is leveraging a variety of cheeses in their operation.”

Wendy’s is testing its Mediterranean Chicken Salad topped with feta cheese. “So far, customers are telling us, ‘Hey, I really like the taste of this cheese,’” Schultz says. “That’s just one example of the shift we’re seeing in the baseline customer who is now looking for more natural cheeses.” Wendy’s tops its Caesar with Parmesan and its other salads with natural cheddar.

Moore promises new salad innovations in 2005 but sees many more opportunities for cheese. Through the Dairy Checkoff Unified Marketing Plan, a collaborative effort to increase demand for U.S. dairy products, DMI partners with foodservice chains, including McDonald’s, Pizza Hut, Wendy’s, Taco Bell, and others, to emphasize how dairy can assist in marketing menu items to consumers. “Our goal is to elevate the variety of cheeses on menus and to offer new ways to serve cheese. You’re going to see new sandwiches and salads and cool new cheese snacking products in chains in 2005,” Moore says, adding that he can’t elaborate due to the proprietary nature of DMI’s partnerships.

A combination of timely factors seems to have converged to pique operators’ interest in cheese. Most notable and newsworthy has been consumers’ interest in more healthful eating. “The emphasis on low-carb diets obviously has helped sell more cheese,” says WMMB’s Wilkinson. “We don’t have any numbers to support that; cheese sales have not been studied in that way. But when you look at what’s being emphasized about these diets—I think that’s been positive for cheese.”

“Eating cheese is a luxury on the Atkins diet,” says Colette Heimowitz, vice president of education and research at Atkins Nutritionals. “Dieters are allowed four ounces of hard cheese in the induction phase, and they are allowed soft cheese—cottage cheese and ricotta—in the ongoing weight loss phase.”

The prevalence of low-carb dieters (ACNielson’s 2003 data shows 17 percent of Americans are on a low-carb regimen with many more just cutting carbs) might have been an impetus for an innovative breakfast and snack offering at Starbucks. Most units now offer a fruit and cheese plate. “At breakfast, where bread and pastries have been king, Starbucks is answering the demand for alternatives,” says Allison Fishman, senior food editor at Atkins.

“Starbucks has recognized that cheese is a perfect snack item,” Chris Moore says. “We think this is the start of incremental growth we’re going to see from coffee establishments. This type of snacking item is a tremendous opportunity for cheese.”

At the other of the spectrum, Wendy’s is testing new low-carb Tuscan Chicken and Tuscan Beef meals that include an Asiago-flavored sauce and are topped with shredded Parmesan, all served over roasted vegetables.

Beyond low-carb diets, scientific research now links dairy consumption, in combination with a balanced, reduced calorie diet, to weight loss and weight management. “The dairy industry is planning to invest significant promotional dollars in 2005 to leverage the science of eating three dairy servings a day and the body’s ability to lose fat and weight,” Moore says.

Making kids’ menus more healthful is also a major focus of DMI’s partnerships with quick-service chains. “Quick-service restaurants already aggressively promote their products to kids,” Moore says. “Now, as chains are stepping up to the plate to offer better choices to kids, we think cheese can play a major role in that effort.” Moore says string cheese, macaroni and cheese, grilled cheese, and mozzarella sticks have proven popular and likely will become more prevalent along with some other innovative offerings next year.

Growing consumer demand for bold, sophisticate, and ethnic flavors has also increased demand for cheese. “The growing influence of Hispanic and Mediterranean flavors has been positive for cheese,” Wilkinson says. “The palates of mainstream Americans have been expanded. You’re now seeing foods from Mexico, Greece, and Italy, for example, that weren’t available a decade ago. Those foods have increased familiarity with specialty cheeses.”

Schlotzsky’s cites interest in ethnic and sophisticated flavors as the reason its stores offer so many cheeses on its sandwiches and salads—perhaps the largest variety offered by a large fast-casual chain. Its original menu included cheddar, whole-milk mozzarella, grated Parmesan, Swiss American, and feta. The new Café and Bakery Menu expands cheese offerings and quality by adding Gorgonzola, an Italian blue cheese, and Gruyère, a Swiss cheese with a buttery, toasty flavor. The new menu also adds provolone, replaces the Swiss-American processed cheese with natural Swiss, and upgrades the grated Parmesan to fresh Parmesan.

“We don’t have American cheese,” says Lori Schneider, Schlotzsky’s research and development coordinator. “We feel our customers are looking for upscale flavors and are familiar with the flavor profiles of the cheeses we offer. There has been some education involved in launching Gruyère and Gorgonzola, but we have descriptions listed and response has been really positive.”

Limited time offerings is one of the best ways to experiment and educate consumers on new cheeses, and that’s just what Schlotzsky’s is doing. In August, the chain launched its Grilled Chicken Romano Panini, putting Gruyère front and center. This month, Schlotzsky’s reintroduced its Angus Steak and Provolone sandwich, an LTO popular earlier in the year.

“While we may be a leader in offering more cheeses on a large scale, I think in the industry as a whole, people are really embracing cheese and trying to offer new things. Look at what Panera Bread did for Asiago,” Schneider says.

Wendy’s is also using LTOs to introduce new cheeses. Its Wild Mountain burger and chicken sandwich were so successful earlier this year that they will return to the menu. “I worked closely with our research and development team to find the perfect complement to a very tangy and spicy Chipotle sauce,” Schultz says. “We wanted to balance that with something smooth and buttery, and we chose a three-quarter ounce slice of Colby Jack.”

In tandem with adding sophistication to salads and sandwiches, cheese also adds value. The main point of resistance to up-scaling cheeses is cost, according to both WMMB and DMI. Natural cheeses, specialty cheeses in particular, are expensive. However, surveys show the cost can easily be made up through upcharges.

“Sandwiches made with specialty cheese varieties such as Wisconsin Asiago, Gruyère, or Gouda command higher menu prices—up to $2 more—than sandwiches made with American cheese,” Wilkinson says, citing WMMB data. A 2001 DMI study showed 78 percent of respondents answering they would pay more to have cheese added to a menu item.

Prices have been a concern industrywide. With wholesale milk prices at a five-year low in 2003, supplies have dropped, raising cheese prices. “We haven’t seen evidence that chains are using less cheese,” Moore says. “The public knows, as do foodservice operators, that dairy products are a good source of nutrients and flavor and are a good value.” WMMB’s Wilkinson agrees. “If quick-service chains haven’t decreased their usage by now, I don’t foresee it happening.”

“Our data shows 8 in 10 people say they not only love cheese, but there’s no substitute for it,” Wilkinson says. “If you’re not going to eat beef, there’s chicken or other meats. But cheese is in a category all by itself.”

That reason alone may be why the future of cheese is so bright. With more than 300 varieties of cheese produced in the United States and production growing, there will be no shortage of product. DMI sees the greatest opportunities at breakfast, on kids’ menus, and in upscaling sandwiches and salads. Restaurant operators also are recognizing the time is right to experiment and they, the dairy industry, and consumers all are likely to enjoy the process.