When you take a walk through the dairy case, what do you see? Chances you’re looking at a wall of white — or worse, out-of-stocks. The milk category can no longer accept the status quo at the point of purchase.
The dairy case has seen dramatic changes in recent years with the proliferation of new product segments competing with milk for space. Simultaneously, shopper behavior has changed, and the retail landscape has evolved.
Retailers are facing tough competition to attract shoppers, driving them to look for consumer packaged goods partners that can help them win with their customers. Partners bringing data, results and profit will likely get a seat at the table, as retailers want programs that are based in shopper understanding.
New proprietary research from the Milk Processor Education Program (MilkPEP) — coined “Dairy Case Dynamics” — uncovers growth opportunities, best practices and insights to maximize dairy case sales and, ultimately, drive retailer profit. As you work with retailers and manage your sales channels, I encourage you to utilize this research in your retail conversations with these simple tips:
- Optimize shopability & in-stock position. Milk is a key trip driver; therefore, out-of-stocks and lack of variety can be costly for retailers and hurt shopper satisfaction. Milk leads the dairy case in sales and profitability, yet 48% of shoppers experience at least one milk out-of-stock experience (out of five trips). Retailers could lose 1.5-2% of milk sales due to out of stocks.1 Milk also has one of the lowest days of supply – averaging just 2.6 days2 — so make sure your brand is working with retailers to keep the dairy case stocked and appealing for consumers.
- Merchandising isn’t a nice-to-have; it’s a must. Every milk purchase is an opportunity to engage shoppers, including with on-pack and point-of-sale materials. Other refrigerated beverages are winning attention with on-pack messaging and eye-catching design, but milk is naturally positioned to capture shopper attention even more effectively with its strong nutritional profile and broad reach (95% of U.S. households by milk).3 Half of the full milk category is currently growing: Over the past four years, lactose-free milk sales have increased 81%; flavored milk is up 18%, and whole milk is up 10%.4 Innovative marketing has the potential to drive impact and better position products to the consumers who want them.
- Communicate the benefits of milk — not just price. Dairy milk’s value is undermined by constant price promotion. Focusing on milk’s functional benefits could drive increased purchase among shoppers. In particular, home in on milk’s protein advantage — 8 grams in every 8 ounces — and chocolate milk’s benefits as a post-exercise recovery drink. Protein is very motivating to grocery shoppers, yet few shoppers know milk is a good source of protein. This news makes shoppers revaluate milk, especially millennials. And it’s credible, building on milk’s accepted nutritious image.
- Make every foot count. Dairy is the most profitable section of the store, delivering 20% of store profit from only 3% of store space.[v] In fact, milk delivers the highest profit per linear foot — specifically single-serve and gallons at neighborhood c-stores and single-serve at on-the-go c-stores.6 By right-sizing the dairy case, addressing spacing of core products, product mix and days of supply, milk brands can help retailers unlock unrealized potential for their store.
- Leverage MilkPEP offerings. MilkPEP has been listening — to retailers, to milk companies and to consumers. 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. With strong industry momentum — positive trends in the marketplace, powerful national marketing programs and elevated scrutiny on the competitive market — the time is right to maximize the dairy case.
As always, MilkPEP is here to support your brand with strategic communication and marketing tools, including sell-in decks, research summaries and the latest national sales data. If you’d like more information on Dairy Case Dynamics research and how you can sell-in to retail, reach out to Kim Purcell at KPurcell@MilkPEP.org.
1. IRI panel data
2. Willard Bishop Grocery SuperStudy
3. Full Year 2017 All Outlets IRI Panel, Willard Bishop Total Store SuperStudy
4. IRI Panel Data, Full Year 2017 dollars and Full Year 2013
5. Willard Bishop Grocery SuperStudy
6. Willard Bishop 2013 C-Store SuperStudy