Are you maximizing the profit potential of the dairy case?
In today’s hyper-competitive and rapidly changing retail landscape, consumers purchase milk differently than other categories – taking into consideration brand, fat content, size, and more. If consumers can’t find what they need at-shelf, they walk away empty-handed – making milk out-of-stocks a major threat to your brand, your retail customers and your shoppers.
It is critical for milk brands and retailers to keep up with today’s consumer, and ensure dairy shelves are in line with the way consumers shop and what they’re seeking. Meeting consumer demand starts right in the dairy case – by addressing milk’s out-of-stock issue, offering the wide product assortment customers want, and fixing the fundamentals to optimize the powerful potential of the milk category.
Dairy milk is, and remains, a powerhouse category
The power and profit potential of the milk category is unmatched – more than 95 percent of households have milk in the fridge with 30 annual trips per buyer[i]. As a key trip and profit driver, milk delivers 20 percent of store profit and from just 3 percent of store space and drives higher bigger basket rings – baskets including milk offer $7+ in profitability than those without it.[ii] Plus, it’s in line with consumer trends – 8 out of 10 moms think milk is very or extremely healthy.[iii]
And let’s not forget about the significant growth opportunities – from flavored milk to lactose-free to whole milk, half of the category is growing. Looking at long-term growth trajectory, flavored milk, specifically, is an incremental purchase opportunity based on new recovery usage occasions.
The bottom line? The dairy case is one of the most profitable sections of the grocery store, but only when in stock. When retailers are assessing their plan-o-grams, it’s critical for milk brands to communicate milk’s profitability to help them right size the dairy case, meet consumer demand and drive sales.
Your brand is losing profit when milk is out of stock
Dairy milk out-of-stocks are a prevalent and preventable threat to profit for milk brands and retailers. In fact, 30 percent of milk consumers say they’d walk out of the store and not purchase anything at all if they can’t find their preferred dairy milk product.[iv] The “walk rate” for whole milk is even higher at 50 percent.[v]
Yet, dairy milk is often understocked and underspaced resulting in lost profit, missed opportunity and decreased customer experience. Just how out of stock is milk at retail? A new audit of more than 1,200 visits to more than 200 stores showed that 9 out of 10 stores were not fully stocked.[vi] On average 4.6 fluid milk items are out of stock, and 48 percent of shoppers have one or more dairy milk out-of-stock experience every 5 trips.[vii]
And it’s not just one kind of product – dairy milk of all varieties is out of stock at shelf. The low spacing of high-demand, growing dairy milk items – like single-serve, lactose-free and whole – put retailers at a high risk of missing out on profit potential. Without the right spacing and assortment, retailers could miss out on sales, likely entire baskets, and potentially longer-term shopper loyalty when customers don’t find what they need on shelf.
Case studies show how fixing the fundamentals of the dairy case – including addressing out-of-stocks and stocking the right products – can be successful when put into practice. When a midwestern grocery chain faced widespread out-of-stock challenges in flavored milks and value-added products across 80 stores, they rightsized the dairy case by adding additional doors of conventional milk and taking from other refrigerated beverages, creamers and cultured products. This space reallocation delivered $4-5 million in sales and about $1 million in profit across a 6-store test.[viii]
Act now! Partner with your customers to optimize stock and maximize profits
Milk can take back the dairy aisle, and there’s an opportunity to reignite category volume and capture opportunities for growth and profit, while better serving retail customers. As a united dairy industry, MilkPEP wants to help your brand work with retailers to optimize their dairy cases, bring excitement back to the category and compel shoppers to buy more milk.
We encourage you to connect with your retail customers on milk’s compelling story. Get your retailer conversations started today with three easy steps:
- Leverage Custom Insights and Resources – We have a wealth of research and resources – across marketing, shelf, package, and product – to help support your brand based on your customers’ needs. Make sure to check out the Revitalizing Milk at Retail toolkit on MilkPEP.org for access to sell-in decks, insights and case studies to bring to your retailer meetings.
- Contact Your Retailers – Now is the time to get your customers excited about milk’s opportunity at retail. Contact your partners to schedule meetings and understand more about their needs, addressing the out-of-stock issue and how to revitalize their dairy cases.
- Partner with MilkPEP – Together, as a united dairy industry, we have a tremendous opportunity to take back the dairy aisle and reignite the category. Connect with us to help address your retail challenges and learn more about optimizing the dairy case by contacting Melissa Malcolm-Cullison, Director of National Sales & Field Marketing at MilkPEP, at MMalcolm@MilkPEP.org today!
[i] Full year 2017 All Outlets IRI Panel
[ii] Full year 2017 All Outlets IRI Panel | Willard Bishop Grocery SuperStudy|
[iii] BrandProspect segmentation research
[iv] 2018 Inmar Analytics shopper loyalty database, 20 million households
[v] Inmar four chain study 2018
[vi] 2018 audit, weekend shopper visits conducted by MilkPEP/Prime Consulting; 1,244 visits, 228 stores.
[vii] IRI panel data
[viii] Case study 2017, Midwestern Grocery with 80+ stores