Online Opportunities

The opportunities and challenges of the specialty cheese e-commerce market.

Dorothy’s Cheese has partisans across the United States who can purchase its Comeback Cow and Keep Dreaming cheeses at a variety of stores where the brands are available. Sometimes, however, the stores aren’t within driving distance of potential customers, so convenience is an issue. For that reason, those cheeses are also available online. Sebastien Lehembre, senior brand manager for New Holland, PA-based Savencia Cheese USA, which produces Dorothy’s cheeses, says e-commerce is not a profit center for the brand, but the company felt it was important to offer the cheeses to an online audience as a way of being “consumer centric.”

“We want to make sure that a consumer who is looking for our cheese can find our cheese, no matter where they are,” Lehembre says. “And that’s what being online can do.”

E-commerce is on the rise in the U.S. and across the world. According to Statista, retail e-commerce sales topped $365 billion in 2019 in the U.S. and are expected to approach $600 billion by 2024. More and more frequently, customers are simply opting to do their shopping online. For specialty cheese sellers, that makes it increasingly important to give customers the chance to access and buy their offerings in an online space.

Mo Frechette, managing partner of Zingerman’s Mail Order, part of the Ann Arbor, MI-based Zingerman’s store chain, says approximately two-thirds of Zingerman’s delivery business now takes place online.

“It’s been a big shift,” he says.

Elizabeth Chubbuck, chief strategy officer at New York City-based Murray’s Cheese, says Murray’s shifted to a greater emphasis on e-commerce in recent years and that has led to climbing sales as well as strengthening customer engagement through growing numbers of email subscribers and social media followers.

“We think of our website as the digital flagship for our brand, and as such, we want it to be the best representation of who Murray’s is and what we stand for,” Chubbuck says. “We want our e-commerce customers to learn from and engage with the website and content the same way they would learn from and engage with a cheesemonger in one of our shops.”

A Crowded Space

Social media sites play a crucial role in driving e-commerce business, including in the specialty cheese market.

“It’s the main reason we’re doing it,” Lehembre says. “A lot of people engage with us on our digital platforms, and we want to make sure that wherever you are in the U.S. you have access to our cheese.”

The digital world, including social media, is “a crowded space,” Chubbuck says, and the competition to break through the public consciousness is stiff.

Cheese Connoisseur

“In order for a brand’s message to stand out, the content has to be extremely engaging, and the presence on social media has to be energetic and consistent,” Chubbuck says. “Two years ago, we made a strategic decision to prioritize creative digital content as a way to engage with our customers, grow our brand awareness, and enrich our website experience with useful recipes and ideas. That shift in priority has had major impacts throughout our organization and also created new ways for us to contextualize the cheese and foods we offer online.”

Even as more customers have shifted to engage brands online, Frechette says Zingerman’s still places an emphasis on its famous print catalogs.

“What we find is that sending the catalog makes people order online,” Frechette says. “If you don’t mail a catalog and you’re an independent retailer, then you’re probably leaving money on the table. A lot of our mailings are dedicated toward holidays … and we’ll have website categories and images associated with those holidays that we’d draw right out of our catalog. So the promotional calendar of our year between the catalog and the website is completely synced up.”

Chubbuck says Murray’s has used engagement via email marketing and social media as an indicator of customer interest in certain types of cheeses.

“We know that our customers are always curious to try something new, and we also know that they are always eager to taste things with truffles in them,” Chubbuck says. “As such, we have evolved our merchandising strategy to allow for a regular cadence of new cheeses—some of them are things we develop as unique, one-and-done offerings from our caves, and other things we source from cheesemakers across the globe. This cadence of new cheeses also creates diversity for our retail, wholesale and restaurant businesses, as well. It has been a welcomed evolution.”

Frechette says Zingerman’s approach to cheese offerings has not changed as its customers have transitioned from ordering via the catalog to online.

“More or less we focus on a limited range of cheeses—ones that can travel decently being shipped in boxes to climates all across the United States,” he says.

Frechette estimates that about 75 percent of Zingerman’s e-commerce business is for gift purchases.

“The way a lot of food e-commerce companies like ours have chosen to sell and market things is to put a collection of goods together in a box, give it a name, give it a price and sell that collection as a unit,” Frechette says. “Those gift collections are really the bread and butter of the e-commerce food business.”

Frechette says consumers shopping online for a friend tend to opt for safer selections. “You might not send someone a pound of Stilton if you don’t know that they really liked it,” he says. Online, Zingerman’s and other purveyors can do their best to depict the cheese but it’s really quite difficult to replicate the in-store experience.

“We offer a much more safe collection of giftable cheeses online,” Frechette says. “You’ll find that the selection of cheeses at versus the selection that you see at Zingerman’s Delicatessen in Ann Arbor is maybe a third as big.”

Frechette says Zingerman’s also opts for more hard cheeses for online sales because they have a longer life, and it makes sense for managing inventory.

“A creamier cheese definitely has more shipping trouble because it can melt faster, but it’s also because the window of opportunity when it’s really good to eat that soft ripened cheese is kind of small, and it’s tough to predict if customers are going to get on your website that day and buy it in time,” Frechette says.

Customer Insights

E-commerce offers tools for companies to potentially gain new insights into their customers, and Chubbuck says, “access to data and the ability to measure the impact of our actions has increased awareness of, and emphasis on, data throughout the organization.” She adds Murray’s recently made Bronto its email service provider, gaining new capabilities for segmenting its customers.

“This segmentation allows us to better understand the different types of customers we have, which then informs how we speak to them,” Chubbuck says. “We are still early in our process of segmentation, but the learning experience is immensely rewarding, and we are already starting to see a positive impact in the response rates of certain types of email campaigns.”

On the other hand, Frechette believes Zingerman’s receives less useful information from online purchases than from phone conversations.

“Before the internet, we talked to all of our customers,” Frechette says. “We learned a lot about building a catalog and our operation that way. Since moving more of the business online, it takes more guessing than it did before.”

The Shipping Challenge

The challenges with shipping cheese are much more complex than with many other foods.

Cheese is not made to be frozen, which can change its taste and texture, and it can melt and spoil if it gets too hot.

“The back of a UPS truck can be 120 degrees in the summer or it can be minus 20 in the winter, and the cheese is going to go in both of those situations and still have to arrive in good condition,” Frechette says. “Technically, that’s a difficult game to play.”

Cheese Connoisseur

Insulated packaging is needed, as in ice or freezer packs to keep it cold, adding weight and cost.

Plus, the cheese needs to be delivered fast to stay fresh. Consequently, Frechette says the specialty cheese market is in a tough place toward competing with the low or zero shipping charges that are so prevalent in other markets and that have altered customer expectations.

“The question from the customer viewpoint is how much money are you willing to pay to get cheese delivered to your door, knowing packaging will be expensive,” Lehembre says.

Frechette says he doesn’t see the costs and complexities likely easing in the future.

“UPS and FedEx bills go up every year—they don’t go down,” Frechette says. “That transit expense doesn’t seem to be reducing in spite of increased volume. So I don’t see any fix to it. The country’s not getting any smaller. You can’t locate five cheese warehouses across the country; and anyway, what Amazon and other fulfillment operators want to do is pick something off a shelf and throw it in a box and not have to think about it. So they are definitely not going to do cut-to-order cheese.”

Lehembre says e-commerce remains “a work in progress” for the specialty cheese segment, especially as it relates to finding a balance between cost and price. But it’s an important challenge to tackle as more and more sales move online.

“It’s where the future is going to be,” he predicts.

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