Friday, June 5, 2020

Summer Inspiration Series: Make dairy foods recession proof. Help retailers provide shoppers meal solutions, along with a touch of comfort.

Photo source: Dutch Farms

The “Summer Inspiration Series” of Friday blogs is all about stepping out of our comfort zone in terms of innovation. Why not? We’re already operating in an unprecedented manner. Some blogs may explore new concepts in “other” food and beverage categories and discuss how they may apply to dairy, others may focus on new consumer behaviors and brainstorm on how dairy foods processors may respond in coming months. 

Comfort, that’s what a lot of the world needs right now, especially the U.S. We are all fortunate to be working in the food industry because food is the one thing that unites us. Every food and beverage brand right now has the ability to connect with consumers and provide comfort. This may be in the form of nutrition, philanthropy or simply nourishing the soul. Now is the time to strengthen this brand connection in order to keep it recession proof. Because…we will be in a recession very soon.

Ben & Jerry’s is one of the best brands throughout food and beverage to make an emotional connection with consumers to keep them coming back for more. Penzey’s spice company is another that never ceases to amaze me. If you are unfamiliar with this online brand with store locations scattered throughout the country, link HERE.

This week the company introduced salt-free Justice seasoning featuring shallots, garlic, onion, green peppercorns, chives and green onion. Described as “Justice has been the guiding light that has brought us through every storm. It’s also a pretty tasty blend. Every meal is better with Justice. Garden tomatoes, chicken salad, grilled asparagus, salmon, roasted potatoes or even scrambled eggs become something remarkable when liberally seasoned with Justice.”

Sales of Justice have surpassed expectations…mine is on a few weeks backorder. It’s an affordable luxury that gives me a bit of comfort while also helping spice up my cooking, all without extra sodium. (That’s something my ticker appreciates these days.)

Consumers continue to speak with their dollar and are not willing to sacrifice the basics during this time. Increased cooking and baking have contributed to large dairy retail sales increases, as dairy is an ingredient in many home-prepared foods.

This is not expected to change. While June welcomed partial lifting of on-premise dining restrictions in many states, slightly slowing retail sales growth, the dairy category is still being prioritized by shoppers, according to IRI data, provided courtesy of the Midwest Dairy Association. Dairy aisle sales are up 20.7%, outpacing total store dollar growth of 12.4%.

For the week ending May 24, 2020, as compared to the same seven-day period in 2019:

  • Fluid milk sales are up 6.1% (volume sales) and 10.6% (dollar sales). In the previous week, sales were up 7.5% (volume) and 12.3% (dollar).
  • Butter sales are up 50.7% (volume) and 39.6% (dollar). In the previous week, butter sales were up 33.6% (volume) and 38.1% (dollar).
  • Cheese sales are up 18.2% (volume) and 26.6% (dollar). In the previous week, cheese sales were up 22.0% (volume) and 29.6% (dollar).
  • Yogurt sales are up 3.9% (volume) and 4.3% (dollar). In the previous week, yogurt sales were up 2.5% (volume) and 2.1% (dollar).
  • Ice cream sales are up 13.4% (volume) and 21.9% (dollar). In the previous week, they were up 18.5% (volume) and 26.3% (dollar).

Photo source: Dutch Farms

Market research provider Euromonitor International expects per capita global consumer expenditure to decline by approximately 5% in 2020 and the global economy to enter the worst recession since the Great Depression. Meal occasions have come into the home and are expected to stay. For some, it’s because they’ve discovered the art of cooking, but for the majority, it will come down to economics. The dairy industry is poised to position its products as nutrient dense, delicious and affordable components of every meal.

This week Euromonitor published “Six Themes Transforming Consumer Markets Due to COVID-19.” You can download the free report HERE.

The six themes that focus on food and nutrition are:

From Sustainability to Purpose: Initiatives move beyond ethical and eco-conscious to a holistic approach that creates social, environmental and economic benefits. Food waste, animal welfare and food security will be brought to the forefront while packaging sustainability and sustainable sourcing take a back seat.

Hometainment and the New Experiential Consumer: Out-of-home activities are brought online, and these virtual experiences must provide as much value as in-person occasions. Meal occasions are brought into the home and could stay as some consumers find a new love for cooking.

Where and How Consumers Shop: Rapid shift to e-commerce, click-and-collect options and the direct-to-consumer (D2C) channel accelerate digital disruption.  A turning point for e-commerce and a boost for meal kits is tempered by an adverse impact on impulse channels.

Wellness Redefined: Consumers focus on achieving optimal health. Happiness becomes a tangible commercial prospect. Healthy eating will become an even more important topic as the balance of exercise versus nutrition becomes disrupted by sedentary lifestyles.

Innovation and the New Core: Efficiency and value drive product development. Brands need to recognize and align with fundamental consumer needs. There will be an emphasis on economy products and well-positioned premium products that can replicate the restaurant experience in the home.

The New Normal--What’s Here to Stay: Online shopping, remote living, decreased discretionary spending and self-care will shape consumer behavior.

Photo source: Dutch Farms

It’s time to market dairy foods to complement these themes. Here are some suggestions on ways to make dairy foods recession proof.

Cheese presents one of the greatest opportunities, as it’s an affordable way to add deliciousness to meal time. Recipe blends—think macaroni and cheese, lasagna, taco, quesadilla, pizza, etc.—enable retailers to cross merchandise products to provide meal solutions. These products empower consumers to get creative in the kitchen with minimal extra effort. They bring the restaurant experience to the kitchen table.

Cooking creams and sauces are popular in select markets in Europe and present an opportunity to offer meal solutions, again with cross merchandising. These are refrigerated viscous dairy products with extras. Think of ready-to-use pourables for Alfredo, carbonara or stroganoff. Just add pasta, and voila!

Butter should fare well on its own, but with some herbs and seasonings, can be marketed alongside meat and poultry. The goal is to offer consumers meal solutions, especially ones with culinary inspiration. Help them bring the restaurant experience to their home.

Here’s a new one for you to ponder: dunking dairy. Imagine a dome-cup, much like we find in the yogurt department, but maybe a little sturdier. The bottom contains delicious whole milk—maybe even a little richer with some extra cream—the top contains two cookies for dunking. In Europe you can find similar concepts with a ready-to-drink latte on the bottom and a biscuit on the top. Such a concept brings the coffee house to you, while also offering portion control with the sweet treat.

Please stay safe and smart. Let’s do our part to unite through our love of dairy. Sending out a hug to all.

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