By Tim Grzebinski and Christopher Costagli
Finding new growth continues to be challenging. This is especially true if you’re looking to grow in more traditional areas of the store, such as dairy.
There is a lot of available data about dairy shopping that manufacturers and retailers can use to be more effective, such as:
U.S. demographic changes represent a huge opportunity for dairy manufacturers. That opportunity is called millennials. Not only are they the largest, most diverse generation in history, they will have more than $10 trillion of spending power in their lifetimes. And, just four years from now, millennials will spend nearly the same on CPG as the boomers.
Since nearly 40 percent of them are multicultural, they will be challenging many major food and beverage trends. According to Mintel, 77 percent of older millennials and 70 percent of younger ones want more transparency from manufacturers. Also, almost half (47 percent) of older millennials and 35 percent of younger millennials don’t trust large food manufacturers.
Millennials want dairy aisle brands that match their needs and beliefs, including healthy/natural and innovative products that save them money (think private label string cheese). They are also clearly interested in snacking on the go as they are currently over-indexing on yogurt drinks, whole milk and, yes, string cheese. Refrigerated yogurt drinks, in particular, do well with millennials including unacculturated Hispanics. Here’s what else you need to know about millennials:
Understand your changing shopper. Millennial purchase power is increasing and boomers are aging out. But millennials are more diverse than ever, so you need to have a good pulse on the young Hispanic and other diverse shopper. Segmentations are a great way to get at exactly who your high-value shoppers are.
Activate the consumer. Reach your consumers directly by activating them where they live, where they shop and via the media they consume. Having the right products on the right shelves in the right stores is the first step, i.e. optimizing your assortment, as well as linking what your consumers buy to their media habits.
Don’t forget about digital. Millennials and Hispanics are the most active consumers online, so make sure that you have a plan for them. While CPG has been slow to adopt digital, especially in the e-commerce space, which is significantly outpacing brick and mortar growth, it still offers huge opportunities. And remember, high category engagement usually also means high digital engagement, so dairy buyers have a good opportunity to leverage digital.
As you can see, winning in the dairy aisle is not only possible but plausible.