By Genevieve Poirier-Richards, Milk Processor Education Program
The dairy case has seen dramatic changes with the proliferation of new product segments competing with milk for space. Simultaneously, shopper behavior has changed and the retail landscape evolved.
As part of our commitment to finding business solutions for processors, MilkPEP conducted new research with leading industry partners Willard Bishop and Prime Consulting. This research, which is available to processors to share with their retail customers, uncovers growth opportunities, best practices and insights that have the potential to maximize the dairy case, increase retailer profit and ultimately drive milk sales.
With strong industry momentum – including new introductions, powerful national marketing programs and elevated scrutiny on milk alternatives – the time really is right to maximize the dairy case. Plus, milk aligns with current food trends and offers so many of the benefits consumers are now seeking – from natural, high-quality protein, to farm-fresh nutrition.
Shelf space in the dairy aisle is precious. To get it right and reinvigorate the dairy case, it’s critical that retailers make every foot count. You can help by encouraging your retail customers to consider how to optimize the product mix, and specifically, how they manage fluid milk – typically the largest component of the case. We encourage you to leverage these insights in your retail meetings to position your brand as a category advisor.
Why there’s an opportunity to sell more milk
- Milk far outperforms on space: Generates 18% of dairy department profit from only 10% of the space.
- Milk drives trips + profit: Milk is a key driver of shopping trips and leads the dairy case in sales productivity. In fact, milk is bought by more than 95% of households, and baskets with milk are 23% more profitable than those without.1
- Milk has huge merchandising potential: The dairy case and fluid milk often lack the in-store interest of other categories. Yet, milk’s benefits are in-line with consumer demands, and MilkPEP programs offer significant support for opportunities in-store.
- Milk has an uncaptured C-store opportunity: Sales have shifted to other channels, and C-stores have lost more than $1 billion in potential milk sales and $321 million in potential milk profit since 2008.
Keep milk in stock; merchandise it with messages
You can help your retail customers capture this opportunity by ensuring milk is in stock, focusing on days-of-supply, increasing milk variety, targeting the right shoppers and merchandising milk with in-store messaging:
1. Help retailers remedy the out of stock issue
2. Increase days-of-supply for more profit
On average, milk’s days-of-supply is lower than most any other product in store. Increasing days-of-supply could improve profit and help retailer’s solve out-of-stocks too.
3. Increase product variety
Fluid milk innovation – specifically lactose-free, health-enhanced and single serve flavors – represents sizeable category growth and an opportunity to increase milk sales.
4. Focus on convenience store business
C-stores have lost ground to other channels for milk sales, resulting in a loss of more than $1 billion in potential sales and $321 million in potential profit since 2008.2 And while milk space is some of the tightest, MilkPEP’s new research shows it is also some of the most profitable in C-stores.2 Key insights show the negative profit trend can be reversed. There are three sizable opportunities for growth for milk at C-store:
5. Optimize milk merchandising
Shopper insights suggest that communicating the benefits of milk beyond price – in particular, milk’s protein advantage (8 grams in every 8 ounces) or chocolate milk’s benefits as a post-exercise recovery drink – could drive increased purchase.
MilkPEP offers powerful national retail campaigns that are steeped in consumer insights and customizable for processor brands.These campaigns reach a broad target with support from a robust advertising strategy across TV, print and digital and take a holistic approach to mirror how consumers see, think about and purchase milk.
For more information on MilkPEP’s Dairy Case Dynamics Research or powerhouse national campaigns – including our partnership with the United States Olympic Committee – visit MilkPEP.org or you can contact MilkPEP at email@example.com.
Dairy Case Dynamics research was conducted by industry experts, including Prime Consulting and Willard Bishop, leveraging national retail data and proprietary MilkPEP insights and research.
 Willard Bishop 2015 Grocery SuperStudy™.
 IRI C-store Channel 2015 and Gross Profit (GP) Margin from Willard Bishop 2013 C-Store SuperStudy™.
 Costs $10-24/store/week Projected by Willard Bishop and Prime Consulting based on time studies, labor costs of $24.40 an hour, 2015 sales rates, incremental work for extra stocking and range of days involved each week
 FMI/GMA Study and Bishop SuperStudy™ values.
 IRI Panel, Bishop Shopper Database, Prime Consulting.
 IRI 2014 New Product Pacesetters.