It’s Time to Reinvent the Dairy Department

Grocery retailers have done an admirable job of reinventing their perimeter departments – to a degree. Many produce sections resemble farmers’ markets; fresh prepared offerings are beautifully merchandised; floral and meat are convenient and inviting … and then there’s dairy.

It’s dairy’s turn, Cindy Sorensen, VP of Midwest Dairy Association, St. Paul, told attendees, at The 2016 NGA Show in Las Vegas. Grocers who have undertaken a dairy reinvention have more than doubled the amount of time shoppers spend in the dairy section, from 25 seconds to a minute. The good news for independent grocers – or any grocery retailer – is that a reinvention doesn’t take significant investments in equipment or space.

Strategies include:

• Flow and adjacency – putting the right products in the right place
• Segmentation and signage – grouping products by consumption and providing signage to educate and alert shoppers
• Website and social media – inexpensive ways to promote new products and solutions
• Meal solution centers – think breakfast, healthy snacks and other meal occasions
• Dairy as a destination – dairy can be exciting

With 98 percent household penetration, dairy is vital to every grocery retailer, and with more retailers than ever now offering dairy products, it’s the right time for independents to up their game.

John Marklin, owner/partner of Bridgewater Foods, Bridgewater, Va., worked with wholesaler Supervalu, and reviewed anchor points in his company's dairy department. The retailer doubled the space it allotted for yogurt, moved milk to flow better with adjacent departments, reworked the assortment for better flow, created a new products case, added new signage, and now uses social media to promote changes and new products. In short order, dairy department sales increased 10 percent, he says.

Lauren Johnson, CEO and Leader of the Pack, Newport Avenue Marketing, Bend, Ore., says her store’s mantra is “first, better or different.” It’s not a matter of investing huge sums of money, she says, but it’s imperative that retailers take chances and try new ways of working and new products. Newport has a hard time keeping a craft yogurt from Seattle stocked, in part because customers recognize it as a healthy, indulgent treat. She expanded the number of Noosa offerings based on the popularity of a few varieties.

Fifty-pound blocks of custom-churned butter are cut and custom-wrapped in-house each week. She highlights local products and strikes up conversations about products and offerings with customers. Further, she talks with her suppliers. Johnson was stunned to learn that while half-gallons of low-fat milk were the rage last year, this year customers want full gallons of higher-fat milk. “We have to regularly talk to our suppliers to learn these things, and then we can’t be afraid to act,” she says.

Heidi Huff, marketing director for IGA, works with members on providing content for their store websites. Through a partnership with Midwest Dairy Association and Dairy Management Inc., she provides shareable “Dairy Makes Sense” content, “IGA Better Choices” health and wellness messaging, videos, ad drop ins, and more. “It’s a great way to tell the local story and the dairy farmer story,” she says. Social media is a great and inexpensive way to promote products and share recipes. “Start a conversation with shoppers; it’s what they want.” That, and a little more excitement in the dairy section.