Dairy goes back to the future

September 20, 2012

Some dairy categories seem ripe to return to health and taste authenticity, which yogurt has shown could win big.

The dairy case is a thriving place to enhance appeals of heritage food— yogurt, cheese and butter—with fresh thinking for today’s consumers who want health and food authenticity. 

The yogurt our parents bought in supermarkets was typically plain and healthy decades ago, before the category evolved into many sugar-laden varieties. The Greek yogurt phenomenon has changed the category dramatically:  It now accounts for about one-third of U.S. yogurt sales, and its health leadership has propelled yogurt sales in U.S. food stores by about 15% in two years, says Nielsen. By now, many manufacturers have rushed in on the craze begun by Fage and Chobani, and growth anticipation is high since U.S. per capita consumption of yogurt is lower than in many nations.

Also, the cropping up of gourmet yogurt bars in New York City shows the traction of quality good-for-you foods with consumers today. 

The Lempert Report sees this trend growing in the chilled case. For example, Sargento has created sub-brands of artisan and chef blends that give an image of limited editions of old-style recipe cheeses. On nearby pegs, brands of premium-sliced deli meats are authentic meat, not formed roll, and have limited or no preservatives or additives. In butter, Land O’Lakes has varieties with olive oil and sea salt or honey butter, to name a few, and emphasizes it is a farmer-owned cooperative that fresh-churns its butters. What’s next? Orange juice, maybe.  Remember when Tropicana was marketed as pure from Florida with no concentrates?

Stores could capitalize on the quality of foods like these with trade dress that connotes farms and freshness, and sampling with people in old-time clothing with props such as butter churns and milking stools. Because foods with authentic appeal often sell at higher margins—though not at gourmet prices—there is room for brands and retailers to build in a marketing budget and appeal to their mainstream shopper base.

Cross merchandising could help spread this trend to other parts of the store, as long as artisan cheeses are shown with artisan crackers, for example, to keep the quality concept intact.