Moovin’ on up
Flavored milk processors look to expand their successes.
In a society where immediate gratification has become an expectation, beverage manufacturers have gone to great lengths to ensure that no one need ever go thirsty. At practically any time and place, one is never more than a few feet from a vending machine, chockfull of assorted soft drinks, teas and juices. Meanwhile, the “Starbucks on every corner” trend of the late ’90s literally helped define an entire generation of latte-swigging young professionals, racing off to their cubicles at the dot com de jour. And for those inclined to seek out libations of the alcoholic persuasion, there’s always the nearest bar.
The one beverage conspicuously missing from that equation is milk. Throughout the majority of its history, milk has primarily been available in grocery stores and later, in neighborhood convenience stores, but then most often just in the gallon jug format.
Hindered by the need for refrigeration throughout the entire distribution chain, milk has largely been kept from reaping the benefits of consumers’ increasingly on-the-go lifestyles, leaving juices, teas, coffees, soft drinks and beer to quench their thirst away from home. However, to borrow a phrase from the legendary Bob Dylan, “The times, they are a-changin’.”
Over the past several years, the milk industry has undergone a remarkable transformation, particularly when it comes to flavored varieties. Spurred by successful innovations such as Dean Foods’ groundbreaking Chugs, processors have put their R&D dollars where their mouths are, investing in new flavors, packaging and technologies. In addition, they’ve increased their levels of promotional activity and expanded the availability of flavored milk into alternate and impulse channels.
By all indications, it certainly has been money well spent. According to Chicago-based Information Resources Inc., sales of flavored milk, eggnog and buttermilk soared 12.8 percent in dollars and 9.1 percent in units during the 52-week period ending November 4, 2001. Industry, experts say that growth is particularly impressive because it represents almost exclusively new sales, as well as progress in the ongoing war for share of stomach.
“Our research and analysis clearly shows that flavored milk purchases are almost purely incremental, and that there is little or no cannibalization of white milk,” explains Tom Nagle, vice president of marketing, International Dairy Foods Association (IDFA), Washington, D.C. “So we are really converting consumer beverage consumption from some other competitive beverages to flavored milk, and that’s a huge benefit to us.”
There’s no denying the role of singleserve PET plastic bottles in the newfound success of flavored milks. Not only were the old-style gable-top cartons somewhat visually unappealing, they were also far less practical for today’s grab-and-go consumers. Therefore, processors have gladly made the switch to plastic and proudly unleashed an assortment of bold, colorful packages, designed to stand up to any big name soft drink.
“Not only is it car-friendly, but it’s an attractive package, which helps us get competitive with the other beverage industries,” says Ed Fleming, corporate sales director for Memphisbased Turner Holdings LLC.
It also better positions flavored milk as a contender in the kinds of impulse outlets previously dominated by soft drinks. After all, someone looking for something to drink on the drive home from work or while sitting in the stands of a baseball game, is not equipped to pour a glass of milk and then place the rest of the gallon in the refrigerator for a later date.
“Single-serve makes milk a beverage that you can consume easily and conveniently out of home, which really broadens the opportunities for milk in those different venues,” says Lisa Wells, marketing manager, Upstate Farms, Buffalo, N.Y.
That’s not to say that processors expect single-serve bottles to replace gallon jugs entirely. On the contrary, most processors tend to agree that the success of single-serve flavored milk products has lead to increased sales of gallons and half-gallons as well.
“Single-serve has brought more awareness to flavored milk where people may try a flavor in a single-serve, like it, and then look to a larger size,” explains Wells.
Upstate experienced that phenomenon firsthand with its own Intense Chocolate milk. Introduced originally as a single-serve, the flavor proved so popular that the company recently introduced a half-gallon size of the product. Likewise, Fleming credits the success of the single-serve with boosting sales of Turner’s gallon and halfgallon chocolate milks.
Meanwhile, Shamrock Foods saw the need for an extra-large single-serve product, geared specifically towards adult and teen males. That led the Phoenix-based company to introduce Mega Moo, a 20-ounce chocolate milk available only in convenience stores. Initiatives such as these could be particularly beneficial to the future of flavored milk, as processors struggle to hang onto young adults who Nagle says typically leave the category in droves between the ages of 12 and 24.
Building The Brand
Although chocolate milk has traditionally garnered the lion’s share of attention, Nagle is quick to point out that other flavors have fared very well when given a chance. In vending test by the Fluid Milk Strategic Thinking Initiative, for example, orange milk accounted for 10 percent of the volume in markets where it was available; strawberry milk for 25 percent; and coffee milk for 30 percent.
According to Nagle, this demonstrates the need for milk processors to think out of the box and move beyond what have traditionally been considered appropriate flavors for milk. Within the past year, for example, Upstate Farms has rolled out two new single-serve milks – Intense Strawberry and Intense Mocha Java, while Shamrock added a Vanilla variety to its “mmmilk” line.
“Variety will drive the level of interest in the category,” says Ann Ocana, Shamrock’s vice president of corporate marketing. “Although chocolate will probably always be king, we fel that people want something new to try.”
Meanwhile, Seattle-based WestFarm Foods has focused its efforts on revamping its Darigold packaging, including that of its DariGo line of fla- vored, single-serve milks. The new package featuring a larger brand name logo, which is angled to “give it more movement on the shelf.” In addition, WestFarm recently introduced a new mascot – Smoooth, a “hip cow with a little bit of attitude,” designed to be the personification of the Darigold brand. Smoooth makes in-person appearances at events in and around Seattle and Portland where he and his crew hand out Darigold samples and coupons.
“I’ve long believed that having a product sample in a consumer’s hands is one of the best ways to introduce them to the quality of your products,” says Randy Eronimous, director of marketing. “It’s an overall pleasant experience, which raises the awareness of the Darigold brand and gets people to try our products.”
Those kinds of brand-building efforts are especially crucial for flavored milk processors, says Nagle. While private label makes up approximately 60 percent of white milk sales, the opposite is true when it comes to flavored milk, where branded products account for more than 75 percent of sales.
“This represents an overall shift toward brand marketing in the milk industry, and it’s focused on flavored and single-serve products,” Nagle explains.
If milk processors truly want to compete against the Cokes, Pepsi’s and Tropicana’s of the world, however, Eronimous believes they must take advantage of existing opportunities to promote the healthfulness of milk. And with so many non-dairy products trying to encroach on milk’s turf through the addition of calcium, this may mean that processors will have to look into further fortifying milk in order to make it even more of a health beverage than it is naturally.
“Milk is already viewed by consumers as an excellent source of calcium, so if we can improve on that, it just makes milk that much more appealing to consumers,” says Eronimous. “If the orange juice companies and the cereal companies, and many other types of food product companies, are touting the calcium message, and we, as an industry, don’t take that and make it one of our most important statements, we are missing a great opportunity.”
Julie Cook is a freelance journalist based in the Chicagoland area.
Copyright Stagnito Publishing Feb 2002
Provided by ProQuest Information and Learning Company. All rights Reserved