Study shows single-serves drive milk sales in c-stores

Study shows single-serves drive milk sales in c-stores

In test, single-serve sizes increased total c-store milk profits 27 percent.

A new report from the Fluid Milk Strategic Thinking Initiative (FMSTI), a marketing think tank that is part of the national “got milk?” Milk Mustache Campaign, demonstrates how important single-serve milk is to convenience store sales and profit margins. With the study results, milk processors are expected to focus more on cstore accounts, and c-store operators may decide to emphasize merchandising, stocking and promoting milk in their stores. Average milk sales in a 100store c-chain are about $2.3 million a year, and, of that, about one-quarter are in single-serve milk sales.

The FMSTI project focused on these single-serve sales, and consisted of three case studies. The first analyzed the impact of milk pint variety on sales, the second measured the impact of milk promotions through the use of secondary barrel coolers, and the third measured the impact of cross-promotions with other food items, such as doughnuts.

“Overall, we found that single-serve milk has the potential to increase total cstore milk profits by as much as 27 percent,” says Tom Nagle, vice president of marketing for the International Dairy Foods Association (IDFA). “Singleserve milk’s gross margin was second only to bottled water and surpassed that of carbonated soft drinks, juices, teas and isotonics.”

In the study, the gross margin index for single-serve milk was 114, making it an above-average contributor to a store’s gross margin. In addition, milk’s index on inventory invested was 200, twice the average and significantly more than any other beverage category. The study also found that single-serve milk turns faster than all of the other categories measured, including three times the rate of tea, more than twice the rate of isotonics, and 50 percent faster than carbonated soft drinks.

For more information about the study, visit www.idfa.org and click on “Milk Programs (MilkPEP): the national “got milk?” Milk Mustache Campaign” under “product marketing. ”

Copyright Stagnito Publishing Feb 2002

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