The Next Cheeses

PROPEL YOUR SUCCESS WITH THE NEXT IT CHEESES PROPEL YOUR SUCCESS WITH THE NEXT IT CHEESES

You want to stand out from your competition and stand out in the minds of your customers. To get there, you need to…

Understand which cheese and flavor combinations are setting menu trends and which ones may be becoming passé

Add unexpected twists to familiar cheeses to surprise and delight your customers

Discover the “Next IT Cheeses” to propel your success!

1 TOP DRIVERS OF CHEESE PURCHASE DECISIONS

Consumers consider many factors in their cheese purchase decision process . . . And flavor is definitely a top driver — slightly ahead of price and well ahead of health aspects like reduced fat. The key is to understand what, how, and where to apply the flavors they’re seeking. That’s the focus in discovering the Next IT Cheeses!

The Menu Adoption Cycle This is a great way to determine which cheese flavors are ripe for innovation and LTOs.

Cheese Popularity / PARMESAN FETA WHITE CHEDDAR Adoption Cycle SMOKED CHEESES SWISS

GOUDA ASIAGO CHEDDAR HALLOUMI AGED CHEESES GOAT CHEESE MOZZARELLA EMMENTAL

CHIHUAHUA QUESO FRESCO

CAMEMBERT HAVARTI PIMENTO CHEESE

MANCHEGO

INCEPTION ADOPTION PROLIFERATION UBIQUITY 2 THE FOOD SERVICE TOP 5

The following cheeses are some of the most popular (in order, based on % penetration) and fastest growing (in order, based on % penetration growth vs YAGO) in a variety of restaurant segments.

QSR CASUAL MOST POPULAR FASTEST GROWING MOST POPULAR FASTEST GROWING Cheddar White Cheddar Parmesan Cheese Curds Parmesan Colby Cheddar Beer Cheese Mozzarella Shaved Parmesan Mozzarella Ricotta Salata American Fresh Parmesan Blue Cheese Queso Fresco Provolone Cheddar Jack American Chevre FAST CASUAL FINE DINING MOST POPULAR FASTEST GROWING MOST POPULAR FASTEST GROWING Cheddar Ricotta Salata Parmesan Cambozola Parmesan Five Cheese Blue Cheese Chihuahua Mozzarella Buffalo Mozzarella Mozzarella Shredded Cheddar Feta Queso Fresco Goat Cheese Danish Blue Cheese Blue Cheese Smoked Cheddar Cheddar Cotija

Source: Datassential MenuTrends Direct, 2016

3 Menu Examples at Independent Restaurants Here are a few innovative ways some independents are using natural cheese on their menus.

WARM CHEDDAR CHEESE BISCUITS

BURGER FEATURING TALLEGIO MORNAY CHEESE

PATATAS FEATURING MANCHEGO FONDUE

GOURMET GRILLED CHEESE FEATURING 5 YEAR AGED CHEESE & GRUYERE CHEESES

CHICKEN FRIED OLIVES STUFFED WITH PIMENTO CHEESE

4 5 Traditional Natural Cheeses Remain Leaders in Retail Cheddar is a perennial favorite, followed by Mozzarella, Colby-Jack, and Mexican Blend. Traditional Hispanic varieties exhibit the fastest growth.

POUND SHARE POUND % VS. YAGO

TOTAL NATURAL CHEESE 2.7% 30.4 CHEDDAR 1.1% 20.3 MOZZARELLA 2.5% 8.2 COJACK 3.5% 7.1 MEXICAN BLEND 5.7% 3.7 PARMESAN 3.3% 3.7 SWISS -1.8% 3.3 RICOTTA 2.6% 2.9 PEPPER JACK 5.2% 2.6 TRAD’L HISPANIC 6.9% 1.9 ITALIAN BLEND 0.5% 1.9 PROVOLONE 4.2% 1.8 MONTEREY JACK 1.2% 12.1 ALL OTHER 5.2%

*Varieties Within All Other Witnessing the Strongest Growth vs. YAGO Include Havarti, Asiago & Gouda

Source: Nielsen Total US - AOC; 52 weeks ending 8/1/15 vs. previous year

5 Nominees for the “Next IT Cheeses”

Criteria: Placement in Menu Adoption Cycle Top & Fastest Growing Cheese Varieties Within Each Restaurant Segment Top & Fastest Growing Cheese Varieties in Retail Demographic Preferences Key Chef Criteria: Use across menu – appetizers, sandwiches, burgers, entrees, etc. Performance in hot & cold dishes Ability to marry to other flavors

The “Next IT Cheeses” Nominees Come From 5 Trend Areas

1. Cheddar of any type – Smoked, Sharp, Aged – is ideal for delivering unique and bold flavors, marries well with other flavors, and appeals to a wide range of demographic groups.

2. Gouda & Havarti are each excellent melting cheeses that are perfect for grilled and hot sandwiches and work well with other flavors.

3. Mediterranean varieties such as Feta, Goat, authentic Italian (i.e. Parmesan, Fresh Mozzarella, Ricotta, Burrata, Taleggio) are all being adopted by the fastest growing demographic segments and are usually used as toppings and in salads.

4. American Regional varieties like Curds and Pimento cheese have been increasingly showing up on independents’ menus, due in part to the explosion in popularity of southern food and cooking. Curds have also made their way on to several QSR and casual dining menus.

5. Traditional Hispanic varieties such as Queso Fresco, Queso Blanco, Cotija, Manchego, and Asadero are becoming increasingly popular as Hispanic populations grow and as other populations discover their unique flavor profiles.

6 The ‘Next IT Cheeses’ Winners Are ... Traditional Hispanic varieties such as Queso Fresco, Manchego, Asadero & Cotija. QUESO FRESCO

Traditional Hispanic Facts Back It Up . . .

The booming Hispanic population continues to GROW!

Queso Fresco and Cotija are in the Adoption phase of the Menu Adoption Cycle.

Traditional Hispanic cheeses are among the TOP 10 COTIJA FASTEST GROWING cheeses in all restaurant segments.

Traditional Hispanic cheeses together are the 9th LARGEST CHEESE TYPE IN RETAIL and are the fastest growing variety among the top 12.

Queso Fresco is the second fastest growing deli random weight cheese variety. ASADERO Traditional Hispanic Cheeses varieties OVER-INDEX WITH KEY DEMOGRAPHICS groups like Hispanics, Millennials and Gen Z.

Traditional Hispanic Cheese varieties are VERSATILE ACROSS THE MENU – working well in both hot & cold applications and marrying well with other flavors.

MANCHEGO

7 Winning Hispanic Cheese Menu Applications ...

Chorizo & Cotija Pretzel Bites Baked pretzels stuffed with spicy sausage and cotija cheese and served with jalapeño smoky mustard and garnished with green onions.

Chicken & Shrimp Tostada Citrus-marinated, fire-grilled chicken, shrimp, avocado, sweet corn, black beans, rice, fresh pico and crumbled cotija , served in a crispy shell.

Portobello & Manchego Cheeseburger

Veggie Wedgie Sandwich Herb focaccia bread, layered with seasoned eggplant, fresh portabellos, provolone, baked then topped with fresh spinach, roma tomatoes, cotija and goat cheeses, and red pepper aioli.

8 THE NEXT IT CHEESES

Remember . . . it’s flavor that matters most. But tastes change, so innovation is key! Culinary trends and consumer tastes are on a never-ending cycle of discovery, evolution, and refinement. Traditional flavor favorites may still work today but in critically different combinations and applications than in the past. After all, berries, herbs, spices, and smoky flavors have existed throughout history, as have hundreds of varieties of cheeses.

The key is being able to see ahead of the trend curve. When you accurately anticipate what people will want, you gain a competitive advantage and establish yourself as a leader in the market.

Let Sargento be your guide We have the natural cheese flavor insights to put you in that leadership position. Whether it’s understanding changing consumer tastes, discovering what’s new and best in the market, or developing your own signature “IT Cheese,” let our cheese experts and many resources help you make smarter natural cheese decisions.

9 Sargento Foods Inc. One Persnickety Place | Plymouth, WI 53073 | 1-800-558-5802 www.sargentofsi.com