DMI Shares Insights On How Dairy Can Win With Consumers
How can the dairy industry build on the strong demand of consumers witnessed during the COVID-19 pandemic? How can the industry continue to compete with non-dairy alternatives? These questions and more were addressed during a presentation by Paul Ziemnisky, executive vice president of global innovation partnerships for Dairy Management Inc. (DMI), during the 2021 Wisconsin Dairy Products Association’s Dairy Symposium held here this week.
The consumer is king across global sales channels, Ziemnisky notes, and dairy needs to continue to leverage its position as a protein powerhouse. Perceptions of the industry’s leadership and command of the future are shifting, as challenges simultaneously are increasing, he says.
Data from the National Milk Producers Federation shows domestic and global dairy sales have soared over the past decade, up 20% and 444%, respectively, while USDA data shows per-capita U.S. consumption reached a new high in 2019, Ziemnisky notes.
U.S. cheese and butter continue to show long-term growth. While milk consumption has declined, Ziemnisky notes it can’t be attributed solely to plant-based alternatives, as other innovations in beverages like water, coffee and carbonated soft drinks have taken share of that space.
At retail, dairy is the largest “edible aisle” in retail at $67 billion, according to 2020 data from Information Resources Inc. (IRI). Ziemnisky says improvements could be made on the foodservice side, possibly via new innovations and marketing programs.
Nearly all households purchase at least some dairy, with cheese leading the pack, Ziemnisky notes. He says industry stakeholders could benefit from joining together on dairy’s collective benefits in marketing and messaging versus solely focusing on companies’ individual products.
“Dairy should call out more of its nutritional benefits because competitors are calling these things out on their products, without much regulation,” he adds.
Industry stakeholders also can benefit by embracing risk taking and piloting new technologies, Ziemnisky says.
New use occasions is another area to focus on, he adds.
On the dairy alternatives side, investment in that space is rapidly increasing, most notably in North America and Europe, Ziemnisky notes. This market has less regulation of product naming, standards of identity, and nutrition, advertising and sustainability claims, he adds.
Meanwhile, consumers increasingly are focused on sustainability issues in dairy, such as the use of plastic. Ziemnisky says data shows the top three packaging changes consumers want to reduce the environmental impact of grocery shopping include products in packaging that can be 100% recycled; products in packaging that is biodegradeable; and products packed in material other than plastic.
He adds that IRI data shows plant-based alternatives are more developed in the expanding e-commerce channel than at overall retail.
However, dairy can “win” with a holistic approach, Ziemnisky says. He outlines a series of strategies including:
• Target — Put the consumer first, leveraging consumers’ needs and desires, play to trends and look ahead to the next generation of consumers.
• Reframe — Rethink dairy’s positioning: not milk, but beverages; not cheese, but snacks.
• Disrupt — Create buzz around products. Use limited time offers for marketing value, not just sales growth.
• Drive — Penetrate new uses and occasions. For example, chicken sandwiches are seeing growth, but cheese hasn’t yet taken advantage of the “add-on” opportunity there.
• Connect — Connect with consumers where they are, for example, the gaming realm, Ziemnisky says, noting 90% of Gen Z consumers classify themselves as gamers, and gaming was the third-largest hobby for Gen Z and millennials in 2019. Focus on dairy’s relevance with brands that live their purpose, engage with influencers and modernize traditional brands.
• Lead — Look to e-commerce as a long-term investment rather than focusing on an immediate return on investment, Ziemnisky says. Bring a vision for category growth to retail rather than just growth of individual products or brands.
“Companies that show a willingness to invest in data, analytics and technology will lead the transformation,” Ziemnisky says.
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Source: Cheese Market News