The consumer has spoken, and they have demonstrated with their purchases that they love milk. But just not any milk; they have shown a preference for milk which tastes good and for the milk that presents some innovation.
Milk consumption is on the increase in the following segments: whole, flavored and value-added (i.e. lactose free, added protein, added calcium). Whole milk tastes amazing and its health benefits are being widely recognized by leading health authorities.
Value-added milk has brought innovation to the category with new flavors, packaging, processing and added health benefits. In fact, milk of all flavors and fat content, fulfills consumer needs including nutrition, satiety, protein, energy, production transparency, and sustainability practices.
Much has been written about the need for milk companies to increase their efforts in the development of new, innovative milk products. But is innovation the sole responsibility of milk processors?
Without support from retailers, the success of new milk products, is limited. There are many examples of new product introductions, meeting consumer needs, which were not successful because they did not receive the merchandising, shelf placement and marketing support from the retailer.
Innovation in the location and design of the milk department has not changed in 50 years. Milk can be found in the back of the store of nearly every retailer and new product introductions, regardless of their intended consumer target, are given 1-2 facings on the shelf and receive little retailer merchandising support to bring awareness to their existence.
Retailers have a responsibility for innovation too. Innovation at retail could include merchandising milk in a consumer-centric way, rather than with an operations focus.
With milk purchased by over 95% of households, locating the milk department in the back of the store provides for easy refilling of this fast turning category. And of course, by driving shoppers to the back of the store, there is a possibility they might add other items to their cart along the way. However, this location is not preferred by shoppers.
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Milk is a trip driver which means consumers will make a dedicated trip to the grocery store for only milk if they are out of stock. Locating it in the back of the store, is not a shopper-friendly location.
This has contributed to other channels of distribution having great success selling milk. The quick in/out shopping experience provided by other classes of trade, is preferred by consumers.
Traditional grocery retailers might consider relocating their milk department to be more “consumer-friendly”. This is innovation.
Another form of innovation for retailers and milk companies to consider, might be in the area of technology.
Consumer research has indicated consumers like to personalize and customize their products, much like the soda machines available at fast food locations which allow consumers to make any combination of flavors just to their preference.
Might this be an opportunity a retailer could embrace? Consumers could personalize any flavor milk they desire; retailers could offer a proprietary package, in a preferred size; and retailers could create a destination department as a point of competitive differentiation.
This innovative technology exists in the marketplace today and it has the possibility to bring dollar sales and margin back to the category. Innovation also comes in thought and operational procedures, both of which will be needed to activate this technology.
What is your role and responsibility in bringing innovation to the milk category? Will it be product, packaging, placement or thought?