by Cindy Sorensen/founder and CEO, The Grocery Group
Each year as I prepare to write my dairy industry “year in review” column, I reflect on the newsworthy events that occurred in the industry in the previous 12 months. This reflection often includes a look back on the following: new product introductions; ingredient, product and package innovations; dairy aisle reinventions; and insights and projections from dairy industry leaders. This reflection also includes a review of consumer research that might provide “aha” insights leading to an increase in milk consumption among consumers.
My review this year found many quotes from dairy industry leaders lamenting the loss of fluid milk consumption and a conundrum about what the future of the industry would look like. A common theme by many was, “We need to find out what consumers want.” These comments struck me as odd.
I have been in the dairy industry for more than 10 years. One of the things that always impressed me is the plethora of consumer research the dairy industry has available to it, both primary and secondary. The studies are consistent in their conclusions in identifying what consumers want and, most importantly, what they don’t want.
One thing is clear: Their interest in white milk in a gallon jug has waned. Consumer research and syndicated sales data also support this fact. Research and sales data also provide insight into what consumers are purchasing for their beverage choices. Those products offer innovation in flavor, packaging (size and type), processing, messaging, marketing, convenience, nutrition, sustainability, etc.
What I saw lacking in 2019 is innovation in thought. Despite the findings of industry-funded consumer research, it continues to process the majority of milk into gallon jugs. Processors’ manufacturing lines run most efficiently with this product. In an attempt to move this volume of milk, the segment has become commoditized with continued depressed prices in the hopes of increasing consumption because of the price/value milk delivers.
Consumers have not responded to that tactic, and they continue to look for beverage choices that fulfill what they want. This is where the lack of innovation in thought occurs. We have the research. We know what consumers want. We have the sales data that supports the research. Why are we still thinking we need to figure out what consumers want?
There are some who, despite the research, believe white milk in a gallon jug is going to come back in favor with consumers, and I believe this stymies innovation in the industry from many directions: farmers, processors and retailers.
Be realistic about the future of fluid milk and make 2020 a call-to-action year. There is a place for fluid milk with consumers. Utilize consumer research to develop products consumers have told us they want. Trust in the research. Get it into the hands of those who can impact change and develop products consumers really want.
Cindy Sorensen is the founder and CEO of The Grocery Group, which focuses on developing leadership in the grocery industry. The Grocery Group’s expertise is in developing innovation in merchandising, category management, distribution and promotion strategy, as well as digital and website development. The Group also is working with the industry and colleges and universities to attract, recruit and retain a talented workforce in a competitive employment market. Working with manufacturers and food startups to develop products to fulfill changing consumer demands also is of special interest to The Grocery Group. Reach Sorensen at [email protected].