Could newer milks change supermarkets for the better?

Articles
May 08, 2015

Could newer milks change supermarkets for the better?

Retailers should explore the marketing potential of premium milks with other categories.

Originally published in the free, weekly e-newsletter, Facts, Figures & the Future.

Retail sales of regular milk are less tasty these days.

But there’s plenty of potential growth news in the milk case:

  • Double-digit sales gains of higher-priced almond and coconut milks; 
  • Presence of the Coca-Cola-distributed fairlife brand from Select Milk Producers, which is lactose-free, ultra-filtered milk to concentrate protein and calcium with less sugar; 
  • The emergence of a2 milk, which comes from cows that produce none of the A1 protein associated with digestive discomfort;
  • Solid sales advances in the organic and lactose-free milk sectors;
  • Growing popularity of milks free of the rBST hormone.

Still, there’s a chance white milk unit volume could rebound - if a new Dean Foods campaign catches on for DairyPure, its new single national brand. “All of the milk produced at its 30+ regional dairies,” some $2.5 billion worth, will come under this umbrella, paired with Dean’s local brands, according to a CNBC exclusive. “The company will highlight its milk is antibiotic-free...and its farmers’ pledge not to use artificial growth hormones.”

The campaign likely won’t help prices much, due to the nationwide white milk glut, but at least the sector could protect share.

Here are specific results, detailed by Nielsen all-outlets data, including convenience stores, for the 52 weeks ended March 28, 2015:

  • Milk sales overall notched its first rise in three years, up 2.1% to $18.1 billion.
  • Regular white milk sales were flat at $13.3 billion, after two straight years of dollar sales losses.
  • Almond milk sales leaped ahead 28.8% to $859.4 million, following successive annual dollar sales gains of 68.0%, 56.5% and 50.7%.
  • Coconut milk sales advanced 10.0% to $58.5 million, extending yearly dollar sales gains, albeit at a slower pace than the 238.0%, 25.3% and 32.4% lifts of prior years.
  • Lactose-free milk sales grew for the fourth year in a row, this time by 13.0% to $685.9 million after relatively nominal gains of 6.1%, 2.3% and 3.7% in the three prior years.
  • Organic white milk sales doubled their growth pace in the latest 52 weeks to 9.2%, or $1.33 billion, up from last year’s 4.5% advance. 

 

As dramatic as these sales shifts seem, protein presence remains a common ground.

While big-brand battles may reshape shares within the milk business, Facts, Figures & The Future (F3) anticipates new sales opportunities for supermarkets. These could come from innovative taste, texture and flavor combinations between the new milks and foods popular to eat with milk. Think breakfast foods, cookies, pies, puddings, coffee blends, syrups, and milk-based recipes to start.

With more marketing dollars in the milk case, joint promotions with other food manufacturers become likelier too - and that could lead to multiple displays of different milks throughout the store, adds F3.

Some retailers have already established separate coolers for almond, coconut and other substitute milk products near produce to (a) associate with health, (b) get the higher-priced cartons in the shopping cart early in the trip, and (c) avoid shopper confusion and direct price comparisons at the regular milk case with this separate destination.