After spending $3.2 billion to purchase Kraft Heinz’s natural cheese business three years ago, Lactalis USA took its time implementing widespread changes to the product mix.
The brands Lactalis acquired included the Kraft Natural Cheese namesake, along with smaller products such as Cracker Barrel, Breakstone’s cottage cheese and Knudsen sour cream and cheese. The products led to the creation of the Lactalis Heritage Dairy division.
Despite the widespread recognition of the items, they were “in a place of … decline,” Ken Padgett, marketing director for Kraft Natural Cheese, said in an interview.
“It wasn’t a rush to do something from day one … that wasn’t meaningful in the market,” Padgett recalled. Still, “at the moment of acquisition [we knew] there was a lot more we could do” to innovate and grow the brands.
The executive and his team initially reviewed the products they acquired before improving their accessibility, availability and brand loyalty. They studied how consumers viewed and used the products, how the brands differed from the competition and spaces in which the dairy offerings could expand.
“We would all love to move faster and more quicker,” he added. “But what we need to do is provide a product that has a rationale benefit that achieves more competition to drive that [customer] loyalty.”
Padgett said they also looked for how the products could tap into the research and development expertise 90-year Lactalis had amassed in dairy through brands such as Parmalat shelf-stable milk, Président brie cheese and Stonyfield yogurt.
Lactalis, for example, can provide insight on the right cheeses to blend, the best way to cut them or the science behind cheeses to get the desired effect.
After several months of work, Lactalis is bringing new products to the market. In March, Kraft Natural Cheese introduced its first innovation since its acquisition.
The offering, called Signature Shreds, comes in three blends: Cheddar, Mexican and Mozzarella. Each blend included a whole-milk mozzarella specifically developed by Lactalis to give the cheese a more melty feel similar to what is found in restaurants without losing the coveted flavor. The shreds also are wider than traditional shredded cheese, which gives them a more premium look and feel.
“Kraft is a brand that’s been around over 100 years and has a lot of nostalgia with people,” Padgett said. “Our goal for the last three years is understanding what that means to people and how do we ignite that in new and different ways, from our communication and now into our innovations.”
Other brands also have recently gotten their refresh.
In January, Cracker Barrel debuted premium Artisan Flavors cheeses in Truffle Cheddar and Dill Havarti designed for charcuterie boards at a party or a late-night treat for an individual. And in late 2023, Brickstone’s underwent a marketing blitz to lean into the growing popularity online where consumers were combining cottage cheese with fruits or incorporating it into ice cream and smoothies.
The recent spate of product launches is likely just the beginning of a faster pace of innovation rollouts. Padgett declined to hint at the future for new product launches, except to say the “starting point” will center on items that make cooking easier for home consumers.
“The first thing we had to do was kind of build out what that pipeline looked like. And now we’re in the world of executing what that pipeline could be,” he said. “I would expect it to be a more rapid pace of innovation. But making sure it’s the right ones.”
