Strategies to Make Dairy a Customer Go-To
In an environment where consumers increasingly want transparency in their product labeling and “clean” foods, it can be challenging to discern which demands are passing fads and which are here to stay. In a session Wednesday at the Wisconsin Cheese Industry Conference here, a panel of leading dairy marketers shared insights and strategies to positively position dairy as a go-to clean, healthy food choice.
The session, “Dairy Marketing and the New Consumer Mind,” was moderated by Kit Yarrow, consumer psychologist, professor and consultant. Panelists included Goedhart Westers, vice president of business development at Grassland Dairy, Greenwood, Wisconsin; Aaron Riipa, sourcing business leader-yogurt at General Mills, Minneapolis, Minnesota; Cathy Strange, global cheese buyer for Whole Foods Markets, Austin, Texas; Chad Vincent, CEO of the Wisconsin Milk Marketing Board, Madison, Wisconsin; and Tripp Hughes, director of brand management at CROPP Cooperative/Organic Valley, Cashton, Wisconsin.
The new normal
Westers notes that several years ago, consumers became concerned about antibiotics and hormones in their food. Terms like “no antibiotics” and “rbST-free” began to crop up on product labels as companies strived to compete and differentiate their products in the marketplace.
However, while at one time having an “rbST-free” product label might “win” an account, in today’s marketplace, it’s the bare minimum needed just to secure business, Westers says.
“It has moved from ‘order-winning’ to ‘order-qualifying,’” he says. “No-rbST is now the norm.”
He adds that the term has penetrated across the dairy portfolio, from milk to cheese and even powders and ice cream.
“Non-GMO” also has become huge in product labeling, Westers says, noting it’s not only happening in the United States, but in global markets.
“Non-GMO is mainstream in Europe,” he says, noting this adds challenges for U.S. products to compete in world markets.
Meanwhile, “organic” has become mainstream over the years as well, notes Hughes.
At Organic Valley, 100 percent of the products are organic, he says.
“Organic is mainstream; at least 8 out of 10 households have some experience purchasing organic products,” Hughes says. “But many consumers have no idea what it means.”
He notes that a primary motivator for purchasing organic products is avoiding “negatives.”
“Our agriculture production methods never use antibiotics, GMOs or hormones,” he says.
Riipa discussed the perspective of the millennial generation when it comes to buying food.
“Millennials are the biggest portion of the population, and as they start to have families, their food values will be passed on,” he says, noting millennials care greatly about their food.
To succeed with this group, he suggests companies focus more on the positive attributes of their products versus focusing on what’s not in them. Simple ingredients and telling the story of where products are sourced from can resonate with consumers, he says.
Strange says companies are almost behind if they are still striving to market to millennials, as the next generation, Generation Z, will begin to penetrate the marketplace.
Still, millennials are key purchasers today, and Strange says their focus is largely on three things: health and wellness, global cuisine and snacking.
Earning trust with this consumer base is key, Strange notes.
“Millennials want companies to be open and honest about what’s in their food,” she says.
At Whole Foods, marketing focuses on driving innovation and sales, with an attribute-focused portfolio consisting of high-quality, natural and organic products that are non-GMO certified. Whole Foods also focuses on family farms, animal welfare and sustainability, Strange says.
“We want to be the organic go-to retailer,” she says.
Vincent says the dairy industry is well-positioned to stand out in a positive way, but it is facing headwinds in terms of trust, understanding and facts.
He notes it is helpful to understand that what’s top of mind for millennial consumers can be broken down into tiers. In the top tier, they are looking at price and cost of products. In the second tier, they want natural, healthy foods, and they want to buy local. In the third tier, they are thinking about pasture-raised products, sustainability, organic and animal welfare, he says.
Vincent notes that dairy sustainability is still a concept that is largely unknown to consumers.
“They’re still forming beliefs, and we need to grab the conversation,” he says.
Dairy companies can focus on dairy’s essence as a wholesome and natural product, he says.
“Freshness is by far the most important attribute to consumers when buying food,” Vincent says. “Specific to cheese, claims related to no added hormones/steroids and local sourcing are most likely to increase purchase intent.”
Both farmers and friends and family are seen as far more trustworthy to consumers than big food companies, he adds.
Embracing your company culture
Westers says while these shifting consumer demands can be daunting, they also can be viewed as an opportunity for companies to innovate and diversify their product portfolio.
“It creates opportunities in the U.S. market. At Grassland, we’ve had to broaden our product portfolio,” he says. “I think it’s important for U.S. companies to look for opportunities to grow the dairy category.”
Vincent says companies should embrace their own culture — what do they believe in, and how do they want to innovate? While it’s important to be mindful of trends, not every trend may be worth chasing if it’s not something the company can really stand behind.
“As a marketer, you have to understand, do consumers know the facts and do you agree?
If so, then it’s likely not a fad, but a trend here to stay,” he says. “But if you hang your hat on one issue and then science swings the other way, your business will suffer.”
He also notes that while many consumers say they are willing to pay more for products with certain value-added attributes, that’s not always the case at the retail shelf. He notes regular versus free-range eggs as an example. Much of the consumer base years ago wanted everything to be free-range, but when it comes to making the purchase at the store, many will still buy conventional eggs because they are cheaper.
“Focus on consumer trends that lift the entire dairy category,” Vincent says. Riipa adds that the values have to be reflected along the entire supply chain.
“Work with cooperatives and producers to find ways to partner and establish value for consumers,” he says.
Source: Cheese Market News