Thursday, October 26, 2023

Food and Beverage Marketers Should Care about Student Loans. Today’s blog tells you why.


Did you miss the IDF World Dairy Summit 2023, which took place Oct. 16-19 in Chicago? Read highlights HERE in an article I wrote for Dairy Processing

2023 Real California Milk Excelerator: Open Innovation Final Pitch Event...I’m honored to be serving as a judge at the upcoming California Milk Advisory Board’s 5th Annual Real California Milk Excelerator Final Pitch Event on November 16th. Looking forward to learning about the companies and their dairy-based innovations. Interested in watching the pitches to see the four companies (out of the eight) that go home with the $30K prizes? Register HERE.

The Federal Reserve reported that roughly 43.5 million Americans had student loan debt at the end of 2022. This totals more than $1.7 trillion, with each borrower owing an average of $37,787.

Research from 84.51 degrees, the retail data, insights and media company that helps Kroger and its partners create customer-centric shopper journeys, conducted a survey in September showing that 49% of those with student loan debt were extremely concerned with their ability to maintain their monthly budget when the student loan forbearance period ended. Payments started up in October after the pandemic hiatus. About 70% of these respondents claimed they/people in their household had not been making payments during the forbearance period.

When 84.51 degrees asked respondents what categories, if any, do they plan to cut back spending due to upcoming student loan payments, they said:

More likely place to cut back:

  • 58%: Dining out/Take-out
  • 49%: Outside of home entertainment
  • 44%: Food delivery services
  • 42%: Travel
  • 37%: Beauty services
  • 37%: Clothing
  • 29%: Home improvements
  • 29%: Savings

Less likely place to cut back:

  • 27%: Groceries
  • 22%: At home entertainment
  • 18%: Cleaning, beauty, personal care essentials
  • 13%: Investments
  • 11%: Transportation
  • 5%: Housing
  • 13%: None of the above

This matters to food and beverage retail brands. These shoppers are looking for value. Dairy products--and foods made with dairy products--have an opportunity to deliver nutrition and deliciousness while managing a budget. 

The more than half (58%) of shoppers with student debt who plan to dine out or do take out less is a major concern for foodservice. In fact, this week Domino’s Pizza announced that it is giving away $1 million worth of free pizzas to anyone with student loan payments as part of its Emergency Pizza promotion. 

“Student loan payments have resumed for millions of Americans, and we wanted to help in our own little way by using the power of pizza to do something nice for our customers,” said Kate Trumbull, Domino’s senior vice president and chief brand officer. “When life gives you loans, Domino’s gives you free pizza.”

The promotion started on October 25, with Domino’s giving away a limited number of free Emergency Pizza for Student Loans codes each day, until all $1 million worth of free pizza codes are claimed. If codes are available on that day, Domino’s will send customers an email with the free pizza code, which they can redeem on their next online carryout or delivery order placed within the next 30 days. 

Domino’s does not want these customers to forget the convenience of its ready-to-eat pizzas. But many have already. Since the onset of the pandemic, many have learned the power—and increasing variety and quality—of frozen foods.

The Power of Frozen in Retail, a new report from the American Frozen Food Institute (AFFI) and FMI-The Food Industry Association, shows that frozen foods continue to maintain their relevance to grocery shoppers and offer a suite of valuable benefits that meet their mealtime needs. Frozen food sales reached $74.2 billion over the last year and the core consumer audience remains steady, indicating a bright future ahead for performance. In a survey of more than 1,700 consumers, respondents indicated they find value in frozen foods as total meal solutions that save them time, are easy to prepare and meet their taste expectations. 

Frozen food’s core consumers, defined as those who consume these foods daily or every few days, held at 38% of all shoppers. In addition to appreciating the convenience and time-savings made possible by frozen foods, the core consumer also reports enjoying the quality and nutrition found in the frozen food aisle. 

“This report is filled with ideas on how to meet the shoppers’ evolving perception of value,” said Rick Stein, vice president of industry relations at FMI. “Shoppers are looking beyond price and quality and considering the experience, convenience and relevance that products and their grocery store offer them. For shoppers, frozen foods help meet this new definition of value.” 

The new research also identified that consumers turn to the frozen food aisle as they look for better-for-you products. The majority (66%) of core consumers are more likely to believe that the frozen food department offers a wide variety of better-for-you options. Additionally, nearly three-quarters of shoppers occasionally or frequently look for better-for-you attributes when purchasing frozen foods. 

“Both core consumers and the general shopper are looking for frozen foods that meet their specific lifestyle,” said Alison Bodor, president and CEO of AFFI. “Frozen foods offer the complete package of solutions for today’s shoppers.” 

Consumers also plan to continue their purchases of frozen foods into the future, with 94% predicting to buy the same or more frozen products in the coming months. Alongside a consistent core consumer base, the data illustrates a core consumer audience that appreciates the value they find in frozen foods. 

“Frozen foods remain relevant to shoppers through product innovation, variety and important attributes like sustainability and health and well-being,” said Stein. 

Pizza Fuels Cheese Usage
A new dairy checkoff growth program with pizza partners is expected to drive an additional 12-plus million pounds of cheese use, according to Dairy Management Inc. (DMI). The bulk of the cheese will be used internationally through an effort with a major quick-serve restaurant pizza chain and a U.S. cheese company. The pizza chain has opened its sourcing to U.S.-produced cheese suppliers as it seeks to return its business success to pre-COVID levels. The company also is leaning on the checkoff for strategic support to increase pizza consumption frequency in this market via advertising and marketing communications. 

“The checkoff’s relationships have always been an underpinning of our plan and our partners understand the challenges our farmers face with rising input costs that affect their bottom line,” said Barbara O’Brien, president and CEO of DMI, which manages the national dairy checkoff program. “They are stepping up with innovative ways we can collaborate to drive more sales of U.S.-produced cheese on their products.” 

Pizza remains a largely untapped opportunity in many global markets where it is often consumed about once a year. With consumer tastes rapidly shifting, it is a timely opportunity to support pizza growth internationally.

2023 Real California Milk Excelerator: Open Innovation Final Pitch Event
I’m honored to be serving as a judge at the upcoming California Milk Advisory Board’s 5th Annual Real California Milk Excelerator Final Pitch Event on November 16th. Looking forward to learning about the companies and their dairy-based innovations. Interested in watching the pitches to see the four companies (out of the eight) that go home with the $30K prizes? Register HERE.

Back in the MIdwest, the Winner Is…
Midwest Dairy hosted its annual pitch contest on Oct. 5, 2023, in Chicago. This is the second year Midwest Dairy has partnered with The Hatchery Chicago to sponsor this contest. The Hatchery Chicago is a non-profit food and beverage incubator. They work to support local food and beverage entrepreneurs so they can build and grow successful food businesses, cultivate local job opportunities for people from all backgrounds, and accelerate inclusive economic growth on Chicago’s West side. Midwest Dairy’s partnership with The Hatchery has helped entrepreneurs access space and resources to help launch their businesses. The three judges awarded Bakr Cookies the first-place win. (I had to forfeit being a judge this year because of my travel conflict with Anuga.)

Bakr Cookies uses lots of real butter in its cookies. The recipe also includes fair trade chocolate, clean ingredients, resealable bags, flakey sea salt and elevated flavors. As the first-place winner, Bakr Cookies is receiving a standard private kitchen with window and co-branded signage for 12 months at The Hatchery Chicago. 

The second-place winner was Howdy Breakfast Buns, which specialize in Texas-Czech-style kolaches with a unique milk bread-style dough. The same prize was awarded, but for six months. 

Midwest Dairy’s support has helped The Hatchery propel its mission forward. These funds have helped remove critical barriers for entrepreneurs who otherwise may not have had the opportunity to access production space and resources. These opportunities allow entrepreneurs to launch innovative brands that create a more diverse and inclusive industry landscape with career pathways.

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