Thursday, May 7, 2015

Dairy Foods Innovations: It’s Not Your Daddy’s Dairy Anymore—Three Timely Tactics to Sell More Dairy Foods

A special thanks to the lady from Rutter’s Dairy who sat next to me during lunch at The Pennsylvania Association of Milk, Food and Environmental Sanitarians Annual Meeting this past week. She summed up my trends and innovations presentation very nicely with “It’s not your daddy’s dairy anymore.”

Times have changed. Best-business practices must change as well in order to not just survive, but also to thrive. This is paramount in today’s competitive business environment.

I explained to conference attendees that the food and beverage business is experiencing a convergence of two strong powers: millennials and technology. As these two come together, their powers gain force. In fact, according to Andrew Appel, president and CEO of IRI, we are witnessing the biggest change in consumer buying since the invention of the car.

Think about it. When households got a car, mom no longer was limited to shopping for groceries at the neighborhood store. She could shop multiple stores and had access to more brands and varieties. The competition began.

The competition is now greater. The growing and very powerful millennial demographic is using technology to shop for everything, including dairy foods.

The way you need to do business is not the way daddy did it. It’s time to get on board for the new marketplace. 

My colleague Keith Nunes at Food Business News wrote “Millennials driving shift in buying habits.” I highly encourage you to read it HERE.

He expands on what Appel said during the IRI Summit a few weeks ago. “We are in the midst of a consumer buying revolution, where media and thousands of other influences affect the market,” said Appel. “By 2020, 90% of digital access will be mobile and the average person who saw 500 ads per day years ago will see 5,000 ads.”

It has never been more important to be 1) transparent, 2) clean label and 3) valuable. These are the three tactics to help you sell more dairy foods to technology-savvy millennials.

1) Tell consumers that all milk is tested for antibiotics, as well as other real facts about dairy. Be TRANSPARENT.
The truth about antibiotics is that if any are found in milk, FDA requires that the milk be rejected for human consumption. This is true for all milk sold or processed in the U.S.

(Link HERE for a great source from Cornell University on milk facts.)

Communicating this fact to consumers is part of the TRANSPARENCY tactic. And apparently, the dairy industry has taken for granted that consumers simply know this fact, as Dean Foods suggests this week with its rollout of DairyPure, the first and largest fresh white milk national brand in the U.S. (Link HERE for more information.)

 Wakefield Research conducted a consumer survey of 1,000 nationally representative U.S. adults. Data showed 82% of American parents said they would make a separate trip to the store if they ran out of milk. The same survey found that most American parents (71%) are concerned with the quality of the milk they serve their children.

To put parents at ease, Dean Foods is communicating to consumers that all DairyPure milk, whether it’s packaged by Alta Dena in California or Mayfield in Tennessee, is backed by an exclusive Five-Point Purity Promise:
  1. No artificial growth hormones
  2. All milk is tested for antibiotics
  3. Continually quality tested to ensure purity
  4. Only from cows fed a healthy diet
  5. Cold shipped fresh from your local dairy
Let’s face it, most fluid milk processors follow these five principles and more. But they have not taken the time to communicate this to consumers.

There are other truths about milk that the industry needs to do a better job of communicating to consumers. They are identified in MilkPEP’s campaign Get Real, which debuted earlier this year. You can find out more HERE.

The point is, TRANSPARENCY is paramount. It’s not your daddy’s dairy anymore and it is necessary in this technology-driven age to be up front with the facts. Speculation can be dangerous.

Kudos to my friends at Blue Bell Creameries for being very transparent with communicating the company’s product recall and the actions the company is taking to rectify the situation. You can read the most recent update HERE.

2) Watch out for more “unacceptable ingredient” lists. Whole Foods Market has long had one, and now so does Panera Bread. This week, the bakery-café chain issued a list of ingredients it will no longer allow to be in foods and beverages on the menu (by the end of 2016). The “no-no list,” as the company calls it, contains artificial colors, flavors, sweeteners and preservatives, as well as other varied ingredients. What’s interesting is that the two lists, both of which include a disclaimer stating that banned ingredients are not limited to the list, are different. For example, Whole Foods’ list does not specify titanium dioxide, which is used as a whitening agent. Panera’s list does. Panera’s list also includes lard and caramel color (classes II, III and IV). Whole Foods’ list does not.

To read Panera’s no-no list, link HERE.
Whole Foods’ list can be found HERE

The point here is it is critical to make CLEAN LABEL a goal. More of these no-no lists are inevitable. It’s better to be proactive then reactive.

3) Do not devalue your product. When I discussed in last week’s blog, which can be accessed HERE, the leveling off of Greek yogurt sales, a friend of mine at the Midwest Dairy Association was quick to point out that the reason this is happening is because manufacturers have been commoditizing it. The value is gone…for consumers, retailers and the manufacturers. We need to stop the madness.

I shopped Meijer last weekend and Chobani was not only on sale for 88 cents, the store offered a downloadable manufacturer's coupon to save one dollar off three. (I am a crazy coupon lady!) This brought the purchase price down to about 55 cents each.

This will never fly with millennials. They do not want big box. They do not want commodities. They like artisan, specialty, hand-crafted and value added. They do not want to buy the same products that the crazy coupon lady buys. Do not devalue your product.

In fact, ADDING VALUE is a great approach. Marketing the protein content of dairy foods is the first step. Adding extra goodies—nutritional or just yummy—is the next.

For example, have you heard fiber is the new protein? Well, not exactly. Fiber is not going to replace protein as the on-trend nutrient, but I have read in more than one place that fiber is expected to be the next really big positive nutrient.

There’s a number of forces in play here. For starters, fiber builds on the satiety and weight management platforms. (To read about formulating weight management-positioned dairy foods using functional ingredients from natural sources, you can download a white paper by linking HERE.)

Another force: all the protein everyone is consuming is causing a bit of a backup in some folks. Fiber to the rescue.

Finally, the Dietary Guidelines for Americans 2015 are expected to emphasize increased intake of fiber. Dairy foods are ideal carriers for value-added ingredients such as fiber.

Remember these three tactics to help you sell more dairy foods to technology-savvy millennials. Be transparent. Formulate clean label. Add value; do not devalue.

Happy Mother’s Day!

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