PG Web Extra: Promoting Dairy

Part of increasing dairy case sales is the creation of winning retail promotions to keep consumers engaged with the category.

"In today’s increasingly competitive environment, marketing innovation is key to gaining a competitive advantage and keeping the consumer's attention," notes Julia Kadison, CEO of the Washington, D.C.-based Milk Processor Education Program (MilkPEP).

"We've launched our own first-of-its-kind marketing program -- the Great American Milk Drive -- specifically optimized for the retail environment," she adds. "A number of milk companies and retailers have seen the program succeed in-store. The program is the first-ever nationwide program designed to deliver highly desired, nutrient-rich gallons of milk to hungry families who need it most, in partnership with Feeding America. And our research shows that retail is the key driver for program donations."

Beyond the Great American Milk Drive, "MilkPEP is dedicated to driving sales and consumption of both white and chocolate milk through our research-based national campaigns steeped in shopper insights and strategic industry collaborations and partnerships," observes Kadison. In 2014, these efforts included Milk Life, "which shows how starting the day with milk’s protein can help everyone accomplish what's important to them," and the Built with Chocolate Milk campaign, which "touts the competitive recovery benefits of chocolate milk after exercise."

Continues Kadison: "We also amped up our efforts to increase consumer confidence in milk's fundamental goodness. These initiatives safeguard milk's reputation against anti-milk messages that impact consumers' purchasing decisions. Without a strong foundation, our programs can't work as hard as they should. Early results show that our campaigns are hard-hitting -- effectively changing attitudes and motivating consumption."

MilkPEP's marketing endeavors are part of a long game, however. "These are all long-term programs for the milk industry," says Kadison. "Most critical is staying focused on the initiatives that we see are moving more milk, changing consumer behavior and activating the industry to work hand-in-hand toward success. I'm excited about what the future holds for MilkPEP and the dairy industry, and look forward to more collaboration, more focus and more excitement that will truly make a difference."

Keep Cool

Other major marketing efforts come from the Harrisburg, Pa.-based National Frozen & Refrigerated Foods Association (NFRA), which "has put significant funds and resources into expanding its consumer PR initiatives to promote refrigerated dairy foods," asserts President and CEO Skip Shaw. "The objective of The Dairy Aisle … Beyond Cool campaign is to increase usage occasions and expand the consideration set of refrigerated items on the weekly 'staples' grocery list beyond milk and eggs to creamers, dough, pudding, etc., while amplifying members' brands, products and initiatives to support the refrigerated category."

Adds Shaw: "The campaign is working to inspire consumers with creative recipe and usage ideas for the fresh foods found in the dairy aisle, showcasing all the culinary possibilities. From creative food combinations to delicious indulgences to the health value of dairy foods, we will excite consumers with unique ideas and inspire them to try new innovative foods found in the dairy aisle."

According to Shaw, "Future growth of the frozen and refrigerated categories," including dairy, "will be dictated by innovation efforts and connecting with consumers who matter the most, along with the ability to create demand across diverse population segments."

Regional, Manufacturer Efforts

On the regional level, the St. Paul, Minn.-based Midwest Dairy Association puts out a monthly social media calendar featuring "recommended, ready-to-use Tweets and Facebook posts containing dairy-related content," with topics including recipes, consumer confidence messages, and health and wellness. The content can be copied into users' existing social media properties.

"It is our goal that [manufacturers and retailers] will use these recommended messages and resources to amplify our common goal of helping to increase the sales of dairy products and maintain consumer trust and confidence in the dairy supply chain," notes Cindy Sorensen, the association's VP of business development.

Among dairy manufacturers, White Plains, N.Y.-based Dannon has been busy ramping up consumer interest in yogurt. The company "recently partnered with Ahold grocery stores to host the Great Greek Flavor Search, which gave Ahold shoppers the opportunity to submit their ideas for new Light & Fit Greek flavors through the Ahold Facebook page,” explains Michael J. Neuwith, Dannon's senior director of public relations. "Paid social ads [and] online display ads were utilized to drive pre-store awareness of the promotion, and the campaign was promoted in Ahold circulars and signs through stores."

The promotion resulted in more than 9,900 submissions, which were then winnowed down to four finalists. "Throughout this promotion, Ahold shoppers were empowered to submit flavor ideas and ultimately decide the winner," says Neuwirth, adding that the winning flavor will be revealed and rolled out in 2015.

Among the other "varied and thoughtful [marketing] tactics" recommended by Neuwirth are "education around alternative uses for yogurt and providing health-and-wellness information on the benefits [of] consuming yogurt every day."

Along with such efforts, however, more attention must be paid to merchandising, he stresses, noting, for instance, "To accelerate the increased sales of yogurt, retailers can look to expand linear footage dedicated to yogurt."

Adds Neuwirth: "It's also important that retailers make the dairy aisle easier to navigate through improved signage delineating different segments of yogurt. This can reduce customer frustration and enable shoppers to come across new products and make nonroutine purchases."

Going Gourmet

An interesting trend noted in dairy, as elsewhere, is the shift toward specialty products, particularly in the cheese segment.

"The Innovation Center for U.S. Dairy says taking dairy from everyday to gourmet by making dairy a culinary treat for special occasions has the potential for significant category growth," affirms Skip Shaw, president and CEO of the Harrisburg, Pa.-based National Frozen & Refrigerated Foods Association, citing figures from Dairy Management Inc.'s "Future of Dairy" report. "In 2010, specialty food sales were $70 billion and gourmet cheese was the No. 1 item. Specialty cheese is projected to be $17 billion by the end of 2014. Gourmet foods has a 63 percent penetration among adults, up from 56 percent in 2010, with about 75 percent of 18- to 34-year-olds buying gourmet."

Lactose-free Living

Selling dairy products to those with problems digesting them is a definite challenge, but not an insuperable one, according to Skip Shaw, president and CEO of the Harrisburg, Pa.-based National Frozen & Refrigerated Foods Association.

"As many as one in four Americans report symptoms of lactose intolerance," Shaw notes, conceding, "This population is more likely to drink less milk or avoid it altogether."

However, "lactose‐free milk is an ideal solution to allow them to benefit from dairy's nutrient package," he says. "With that in mind, dairy producers are partnering with HP Hood, using [the] Lactaid brand to build awareness and education about the valuable nutrition, health benefits, varieties and ease of digestibility of lactose‐free milk."

Other lactose-free dairy case options cited by Shaw include NextFoods' GoodBelly Probiotic Juice Drinks, a line of dairy-free, soy-free, vegan, non-GMO Verified and kosher drinks featuring the probiotic strain Lactobacillus plantarum 299v and formulated for daily digestive health, and Silk Cashewmilk, a creamy beverage boasting fewer calories than skim milk, as well as no saturated fat and 50 percent more calcium than dairy milk.

Kroger Innovates With Dairy

The Kroger Co. has begun applying its company-wide Customer 1st Innovation strategy to its dairy business –- and is already seeing success.

"We recently opened a state-of-the-art dairy processing plant in Denver," recounted Michael Ellis, president and COO of the Cincinnati-based grocer, during its third-quarter earnings call last November. "We built and engineered the plant to deliver exceptional quality and freshness for our customers, and to provide an avenue for innovation in the dairy category. We incorporated new technologies for our customers that ensure our milk will stay fresher longer than ever before. We are the first dairy in the U.S. to deploy robotic technology that enables us to pack cases and pick and palletize orders entirely by automation."

Continued Ellis, "Another innovation that this dairy will bring is the ability for us to produce long-shelf-life products to meet growing demand for aseptic products and packaging."

The dairy facility –- Kroger’s first ground-up manufacturing plant of any kind in two decades -– opened last May and began full production of fresh milk in August. "We have been producing fresh milk, organic milk, juices and drinks, and customer response has been very positive," Ellis asserted on the earnings call.

Fluid Milk Fights Back

When it comes to product innovation in the dairy case, "the fluid-milk category is no exception –- consumers want and expect new options," says Julia Kadison, notes Julia Kadison, CEO of the Washington, D.C.-based Milk Processor Education Program (MilkPEP).

"Unfortunately, real milk continues to be out-innovated by the imposters who are moving into milk's territory –- with their claims, their expanding list of additives and by taking more physical space in the dairy case –- despite not being dairy at all," she cautions, no doubt referring to nondairy rivals made from soy, almonds, cashews, hemp, rice and the like. "We have seen some bold innovation in real milk, such as by FairLife, as well as some packaging updates and premium value-added products like Dean's TruMoo Protein. And it's going to be important that we see more such innovation if milk is to compete on a level playing field with the expanding roster of competitors."