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Flavors, formats and portion control are among the trends driving dairy sales in the retail channel.
Is that glass of milk half full or half empty?
It depends on whom you ask and which figures you believe. But optimists and pessimists alike agree on one thing: There is plenty of opportunity for growth for astute retailers.
Syndicated data shows milk down slightly from last year, but slowly recovering in recent months. Single-serve and flavored milk beverages are sparking new interest in the category, especially among retailers putting extra effort into promoting and displaying them.
"These new products are bringing excitement to the dairy case," according to Roy Warren, chief executive officer of Bravo Foods International in North Palm Beach, Fla.
The excitement can build in interesting ways. "Shop-Rite in New Jersey does a masterful job with milk beverages," Warren says. "We are seeing sales increase on a per-SKU basis as they add variety to this category. They even appear to be selling more white milk."
Packaging, "demographically profiled fortification" and good-old brand marketing are driving the new-found excitement here. Single-serve, plastic bottles for immediate consumption are showing up in more and more places where thirsty consumers are - in schools, for example.
"Paperboard containers are being converted to plastic, slowly but surely," says Scott Hunt, vice president for retail national accounts at Dairy Management Inc. (DMI), Rosemont, Ill. Cost seems to be the main obstacle, but consumer preference is overwhelming for plastic.
Plastic Over Paper
In recent research conducted for the National Dairy Council, 67 percent of interviewed school children said that milk in a plastic bottle "had a better flavor" than milk in a paper carton. Even better, 83 percent said that school milk in a plastic bottle was "better overall" than milk in a paper container.
According to DMI, about 1 million students in 1,500 schools across the country now drink milk from plastic bottles. Retailers who pay attention to this trend can take a merchandising lesson from the ready-to-eat cereal category.
"Kids see these products when they are in the store with mom or dad," Hunt says, "and they are familiar with them, often due to the school milk programs." Familiarity can also come from the strong brand equity in confectionary...