It looks like the rising price of milk is beginning to have an effect on sales. 

It looks like the rising price of milk is beginning to have an effect on sales. Meanwhile, frozen yogurt sales leveled a bit from May to June, but that might be just a bump in the road for the recently revived subcategory.

Information Resources Inc. reports that dollar sales of lowfat and skim milk jumped by more than 12% during the four weeks prior to June 17. It was the third month in a row in which dollar sales growth accelerated from what had been modest increases in the first quarter. Meanwhile, there has been an opposite movement in the sales-by-volume column. Volume and unit sales had actually started to grow in the last quarter of 2006 and in the early going of 2007, but they have dropped a bit since March. The good news is that sales are only dropping a bit, and considering that the cause of the price spike can be tied directly to tightening milk supplies, perhaps some tightening of retail sales naturally follows.

Of course we will continue to follow these trends closely to see if milk can hold onto the gains it made last year.

Frozen yogurt has been the surprise of the season, with years’ worth of moribund sales reversing themselves and taking off. Last month we showed how quarterly sales jumped into the black during the last two quarters of 2006.  Looking at monthly figures with IRI’s Food Drug and Mass Merchandiser measures we see that the growth continues in 2007. Dollar sales, in particular have been up about 4% when averaged across the most recent six months. Volume sales actually dipped a bit in the four weeks ended June 17.

Looking at some of the top brands of frozen yogurt might give us a pretty good idea of why overall sales are up-it comes down to brand power and innovation. Dreyer’s recently introduced frozen yogurt under the Dreyer’s/Edy’s Slow Churned umbrella. A little push from Dreyer’s one of the nation’s top ice cream makers, goes a long way. Dreyer’s has market share that is second only to private label, and it experienced some healthy growth in the 52 weeks ended June 17.

Kemps, the frozen dessert arm of HP Hood, recently introduced Live and Healthy, a brand which boasts a live and active culture nutritional profile. Kemps is no stranger to the fro-yo category of course, and it has some muscle as well. The new line jumped right into the top ten.