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June is National Dairy Month, and with it comes opportunities to increase sales with simple tactics that remind your shoppers of the many benefits dairy products have to offer.
Exploring Dairy Trends and Trouble Spots
In recent years, the dairy industry has seen milk consumption decline in the face of increased competition from plant-based alternatives (such as soy, rice, almond and now oat milk), as some U.S. consumers adopt non-dairy preferences due to perceived health, welfare, and/or environmental reasons.
To get a sense of the dairy landscape, we talked to Chris Kohls, vice president of dairy experience for Midwest Dairy, a Red Oval partner trade group that’s an affiliate of the National Dairy Council. To put the competition from plant-based alternatives into perspective, he said it’s important to look at the high status milk still holds in the grocery store. “People go to the store for milk, bread, eggs, bananas,” he said. On average, tried-and-true liquid milk makes up about three percent of the store shelves, 10 percent of sales, at 20 percent profit, said Kohls.
According to Kohls, milk's longstanding status as a grocery mainstay is all the more reason to put a little extra effort into your dairy department, giving it a reboot that will make it more appealing to today's shoppers. “Other perimeter departments such as produce and meat look inviting. By the time to you get to dairy, it’s often not as exciting.”
Using signage to tell the story of dairy's commitment to family farms (e.g. Local Equals Fresh) and samples to remind shoppers of dairy's many flavor profiles is a great way to bring some excitement to the dairy aisle. Kohls also suggested extending that excitement beyond the dairy department with additional dairy placements throughout the store, such as single-serve milks at the check-out or in grocerant areas, or a second dairy case closer to the store entrance.
When it comes to overall dairy assortment, Kohls recommends looking to current trends and strengths in the category in order to strike the right balance (without getting too carried away in trying to provide everything). Strong spots include:
In the shift to consume more natural, wholesome ingredients, shoppers are embracing fuller fat offerings. Data from Nielsen found whole milk was the main traditional milk option to see unit consumption growth year-over-year in 2018 and 2019. Same goes with whole milk yogurt and other products, said Kohls. On the converse, skim milk and fat-free products are losing interest for consumers.
Retailers Find Success with Local Products
Add to these trends the consumers’ continued desire to shop and support local and a theme emerges. There are plenty of opportunities to reframe the dairy narrative to appeal to shoppers’ quests for healthy, fresh, and local by expanding your dairy offerings with local and regional suppliers, emphasizing the all-natural wholesome attributes that are associated with dairy products. Here are three reasons to consider working with local producers:
1. The Fresh Factor
“We've been working hard to bring more local products because we believe that local equals fresh,” said Irene Cooper, project manager at Lake Region IGA in Hawley, Pennsylvania. They offer local pasteurized and unpasteurized cow's milk, goat's milk, and ice cream, which many of Lake Region's customers see as both fresher and healthier. Lake Region IGA is also working on expanding their dairy options by bringing in a local cheese maker. “It’s selling. There’s definitely a market for it,” she said. Her advice to other retailers? “Try it. If it doesn’t work, you don’t have to reorder it.”
2. Feel-Good Effect
At North Albany IGA in Oregon, customers can’t get much more local than dairy products from nearby Royal Riverside Farm. In the greater Albany area, this small dairy only sells to the IGA, and fans of the milk like how it’s pasteurized but not homogenized, so the cream rises to the top, said North Albany IGA Store Manager Charlie McKissick. Sold in glass bottles with weekly deliveries to the store made by the farmer himself, the scenario--which feels like a throwback to the days of the neighborhood milkman--also appeals to shoppers who are concerned about the environmental impact of their food.
The feel-good effect is a huge component at Lake Region IGA, as well. “We believe in supporting the community and doing what's right,” said Cooper. It’s a feeling that customers share, too. According to Cooper, the store has been getting lots of feedback from people saying "thank you for offering more local products," which they see as better for their community and the planet.
For Cooper, carrying local can sometimes take a little extra effort for less overall margin. For example, the store has to put UPC labels on the ice cream they source, which sells at $6.99 for a true half-gallon. But the emotional satisfaction is well worth it and her customers agree. “It’s a little more expensive, but people are willing to pay more for value. People care about where their food comes from and want to know what is in it. That is more important than price,” Cooper said.
3. Local Loyalty
Retailers we spoke to for this article agreed that while they end up taking in smaller margins on local dairy, it’s worth it for the customer loyalty.
“There’s definitely a following,” said North Albany IGA's McKissick, of the local farm they carry. The store benefits from customers making repeat visits to get their local fix from Royal Riverside Farm. (The fact that shoppers pay $2.50 in deposit for their glass milk bottles also ensures they keep coming back.) One tip for building that local following is to offer something different: yogurt in many forms, particularly Greek yogurt, has enjoyed a run of popularity. Royal Riverside just added drinkable yogurt—in plain, peach, and strawberry flavors—to their product offerings and the response has been positive.
Social media is a great tool for communicating the benefits of fresh, local dairy, telling the stories behind the farms, and building a following with your customer base. For example, Frobose Market IGA in Pemberville, Ohio posted the story behind regional producer Toft’s Dairy: “Contracting with local farmers allows Toft’s to guarantee their customers that they use the freshest quality of milk to make all of their delicious products….Toft’s has become locally famous for its “One Quality” philosophy, which means Toft’s uses only the finest ingredients to produce the highest quality products.”
For Cooper, getting more involved with their local producers has led to finding the “inside scoop” on news of interest to their followers.
“We've learned about local partnerships that are happening outside our store. For example, Black and Brass [Coffee Roasters] and Creamworks Creamery are teaming up together to make a coffee ice cream. We have been just hitting the tip of the iceberg with this new campaign of local equals fresh,” she said.
Shine a Light on the Benefits of Dairy this June Dairy Month
Visit IGA.com throughout the month of June for dairy insights and recipes (all shareable on your store’s Facebook page with a click of a button), and click here for additional assets, including graphics, Facebook posts, and more.
Looking to take things a step further and make your store a year-round dairy destination? Don't forget about customizable Local Equals Fresh signage available for your store.