Consumers’ Expectations In Dairy Products Changing
The list is long of what consumers are demanding from their dairy product favorites, including qualities like sugar reduction, value-added ingredients, portability and clean labels. The themes play out across dairy’s four leading categories: cultured products, cheese, milk and ice cream.
According to the National Dairy Council (NDC), nutrition experts agree that it is best to get nutrients, including calcium, from foods rather than supplements.
“That’s because whole foods like calcium-rich milk, cheese and yogurt contain several vitamins, minerals and other components associated with promoting health,” the council says on its website. “Dairy foods, such as milk, yogurt and cheese, are the main food source of calcium for most people in the U.S. In fact, on average, milk is the top food source of calcium, vitamin D and potassium for Americans age two and older.”
But dairy is changing as pricing is highly influenced by both market and weather conditions. Fluid milk, which is the base of all dairy products, is a commodity constantly subjected to fluctuating supply and demand.
According to International Dairy Deli Bakery Association (IDDBA), it has been a tough two years for dairy with declines in overall sales and volume.
Three trends that could potentially contribute to sales and demand growth in 2018 include flavor innovation, especially in a single serving, continued snacking innovation, and a return to marketing the natural benefits of dairy.
Nearly everyone in the U.S. shops in the dairy department at some point, according to IDDBA. Dairy has a household penetration rate of 97.7 percent, and the average household purchases dairy items 44 times per year.
Many factors are impacting milk consumption in the U.S. today, including population growth; branded and checkoff marketing; retail prices; growth in lactose-free and flavored milk products; smoothies that contain dairy; and increasing whole milk consumption. All of these, according to IDDBA’s 2018 “What’s In Store” research book, are contributing to positive sales.
However, the decline in cereal consumption, competition from other beverages, and health and environmental concerns all negatively impact sales.
Shopping trends in the dairy department
The dairy department generates more than 11 percent of total store sales and 20 percent of profit for stores, despite only using 3 percent of store space.
Many of the trends that could boost dairy this year are in the specialty cheese department, especially single serve, snacking and flavor enhancement.
According to IDDBA, flavor innovation has been the driving force for growth in yogurt and cheese, as a single-serve flavored dairy product is a low-cost way for consumers wanting flavor to indulge.
In the fluid milk category, flavored milk has been on the rise, growing 15.8 percent between 2014-16, which accounts for 10 percent of all milk sold.
Flavored milk products account for nearly 5 percent of fluid milk sales. Chocolate leads the category, which accounts for 94 percent of all flavored milk—up 5.4 percent from the previous year, according to IDDBA.
Snacking is here to stay
Snacking is gaining momentum as a normal part of the day for many. More than 14 percent of consumers snack five times or more per day, which is more than a 25 percent increase in just one year.
According to IDDBA, offering dairy in a single-serving/smaller portion size is closely tied with flavor innovation, snacking and the refocus on the positive qualities of dairy foods. Subcategories such as cream cheese and cottage cheese may begin to show growth in single-serving packages.
Dairy and frozen departments are usually the last departments consumers shop prior leaving the store, which means shoppers tend to spend less time in those departments and only grab planned purchases.
IDDBA said package graphics and retail signage can help consumers see the innovation in the dairy department.
Marketing and technology
Identifying opportunities for new merchandising could spur sales, according to IDDBA. The traditional mindset has always been to keep dairy in the back of the store so that consumers have to walk through the entire store to reach it, which will increase impulse purchases along the way.
However, people are looking for ways to make their lives easier. This can be accomplished by allocating space on endcaps or in produce, deli and bakery, where dairy can be joined with complementary categories such as cereal, cookies, fruit and granola.
“Another possibility might be to place milk in your grab-and-go beer section,” the What’s In Store report says. “Retailers and manufacturers need to take the time to call out differentiation with dairy.”
In 2016 IDDBA began collaborating with The Cambridge Group on original research that would benefit both manufacturers and retailers. A three-stage project was planned.
For stage one, IDDBA and Cambridge Group used the Nielsen Homescan database to identify dairy superconsumers. Superconsumers—the name of a book by Cambridge Group Director Eddie Yoon—are not just heavy users of a certain products; they are “characterized by their attitude as well: they are passionate about and highly engaged with—and maybe a little obsessive about—a category.”
Dairy superconsumers, according to the research, are 10 percent of households who drive 22 percent of the total dairy spend.
• Spend 2.2 times more ($634 a year)
• Purchase seven subcategories, and
• Shop at five different stores.
Dairy superconsumers also understand that dairy is healthy, the research found.
Stage one research, which came out last October, indicates that 20 percent of households are potential superconsumers—people who often really like dairy but spend less than a superconsumer (about $311 instead of $634).
“Potentials may need to be taught or given permission to use more of a product. In the case of dairy, it may be as simple as getting back to the basics—pushing the positive qualities of dairy by amplifying the marketing message that dairy is full of calcium, protein and other healthy vitamins,” according to “The Superconsumer Opportunity in Dairy.”
“If emphasizing the marketing message can get potentials to increase their spend index to 165, just halfway to a superconsumer’s spend index, the dairy industry could experience 11 percent growth or $5.2 billion of growth.”
Frozen Food Fan? As Sales Rise, Studies Show Frozen Produce Is As Healthy As Fresh
Frozen vegetables are displayed for sale at an Aldi supermarket in Hackensack, N.J.
Bloomberg/Bloomberg via Getty Images
Americans are rediscovering the coldest aisle in the supermarket.
According to a new report, sales of frozen foods, including vegetables and prepared foods, are now on the rise following a multi-year slump.
The uptick is new — and modest. But growth “is accelerating as consumers begin to see freezing as a way to preserve food with fewer negatives,” concludes a report from RBC Capital Markets.
At a time when two-thirds of Americans say they want to eat more vegetables, 85 percent of consumers fail to eat the minimum recommended amount. It’s “one of the widest disconnects in the world of eating,” concludes the RBC report. Perhaps innovations in the frozen aisle could help narrow this divide.
Frozen produce already has several factors going for it: “its affordability and its convenience,” says Phil Lempert, editor of Supermarketguru.com. And given that the typical American family tosses out $1,500 worth of food yearly — normally after it goes bad in the fridge — frozen foods, which have a much longer shelf life, could help cut back on waste. “People are more concerned about waste than ever before,” Lempert says.
Big food companies are offering up new options in the frozen aisle. The RBC report points to the development of products such as veggie tots, an alternative to carbohydrate-heavy tater tots, and veggie rice, which is seen as a healthier alternative to white rice, which is a refined starch that can spike blood sugar.
Pinnacle Foods, which owns Birds Eye, has launched new pastas made from vegetables. And Green Giant, owned by B&G Foods, has introduced Veggie Spirals, made from beets, butternut squash, zucchini and carrots. Options like these may help “increase vegetable eating occasions” — and help maintain the growth momentum for frozen foods, the report concludes.
But, there are still headwinds facing the frozen food sector. Many Americans have heard the message that fresh is best. And the texture of frozen vegetables turns some people off.
“Fresh and local is what they say tends to be healthier,” shopper Olivia Mitchell told me as she shopped the aisles of a Trader Joe’s with her baby in tow. Mitchell says she prefers to buy fresh produce, and she recently joined a CSA, so she’s looking forward to deliveries of local produce this summer.
However, with two kids and a busy schedule, Mitchell acknowledges the convenience of frozen food. “I buy frozen peas and okra,” she says. She also buys frozen entrees that her husband takes for lunch.
As for the assumption that fresh is healthiest, it turns out that frozen produce can pack a punch when it comes to nutrition.
When you freeze fruits and vegetables, it locks in nutrients, and several studies have shown that this helps retain high levels of vitamins.
“You can store them in the freezer for a year and the nutrient level pretty much stays the same,” says plant scientist Hazel MacTavish-West, who is a food industry consultant.
She says many factors influence the nutritional content of fruits and vegetables, but frozen produce tends to hold up pretty well.
Food scientists at the University of California, Davis, designed a study to compare the nutritional value of fresh and frozen produce. They measured the nutrients in samples of eight different kinds of fresh and frozen fruits and vegetables — including carrots, broccoli, spinach, peas and berries.
“We were quite surprised to find there were no significant differences,” says study author Diane Barrett, an emerita professor in the Department of Food Science & Technology at UC Davis.
“Overall, the frozen was as good as fresh, and in some cases the frozen fruits and vegetables were better than fresh,” Barrett says. For instance, most of the frozen fruits and vegetables had higher levels of vitamin E.
That study was funded by the Frozen Food Foundation, part of the American Frozen Food Institute. However, Barrett says the foundation did not dictate any of the parameters of the study. “I designed the study, determined which analytical procedures to use, and interpreted the results,” Barrett explains.
Barrett says frozen produce does lose some nutrients during processing, when it’s blanched or steamed. But she says part of the reason the nutrition holds up well in frozen fruits and vegetables can be explained by how quickly it’s frozen after harvest. “Typically, the freezing facilities are very close to where the vegetables are grown, so within hours, [the vegetables] are frozen,” she says.