A defiant Dairy Crest has vowed to continue with its aggressive marketing strategy for Cathedral City and said it would 'not be out-promoted by anybody', despite other Cheddar brands warning the category needed to rethink its approach to promotions.
Milk Link chief executive Neil Kennedy warned last week that the level of promotional activity in branded Cheddar was now unsustainable and risked undermining the unique value proposition brands were meant to offer.
"Brands are supposed to add value to a category, but instead there is huge value destruction," Kennedy told the Dairy Industry Newsletter conference. "The strategy needs addressing. There are too many Cheddar brands doing too many similar things at the moment."
However, speaking at the same event, Cathedral City brand manager Paul Fraser insisted that promotions had an important role to play in the category. They had worked well for Dairy Crest, he said, with gondola deals resulting in a 50% increase in incremental Cathedral City sales.
As the market leader, Cathedral City would always compete in the market place, and promotional activity was key to that, he later added. "We believe that Cathedral City is different to other brands, as our promotional strategy works hard to add incremental category sales."
The level of promotions on branded Cheddar is a frequent cause for complaint from cheesemakers, and market leader Cathedral City is not the only brand engaged in heavy discounting.
According to Kantar, promotions have accounted for 81.7% of volume sales of Seriously Strong over the past year, with 77.3% of Pilgrims Choice and 80.7% of Lake District Cheese Co sold on deal [52w/e 17 April 2011]. During the same period, Cathedral City sold 77.9% of its volume on deal.
The future was nevertheless bright for the sector if brands stopped focusing all their attention on being "cheapest on display," said Kennedy.
Milk Link chief executive Neil Kennedy warned last week that the level of promotional activity in branded Cheddar was now unsustainable and risked undermining the unique value proposition brands were meant to offer.
"Brands are supposed to add value to a category, but instead there is huge value destruction," Kennedy told the Dairy Industry Newsletter conference. "The strategy needs addressing. There are too many Cheddar brands doing too many similar things at the moment."
However, speaking at the same event, Cathedral City brand manager Paul Fraser insisted that promotions had an important role to play in the category. They had worked well for Dairy Crest, he said, with gondola deals resulting in a 50% increase in incremental Cathedral City sales.
As the market leader, Cathedral City would always compete in the market place, and promotional activity was key to that, he later added. "We believe that Cathedral City is different to other brands, as our promotional strategy works hard to add incremental category sales."
The level of promotions on branded Cheddar is a frequent cause for complaint from cheesemakers, and market leader Cathedral City is not the only brand engaged in heavy discounting.
According to Kantar, promotions have accounted for 81.7% of volume sales of Seriously Strong over the past year, with 77.3% of Pilgrims Choice and 80.7% of Lake District Cheese Co sold on deal [52w/e 17 April 2011]. During the same period, Cathedral City sold 77.9% of its volume on deal.
The future was nevertheless bright for the sector if brands stopped focusing all their attention on being "cheapest on display," said Kennedy.
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