Dairy and Ice Cream Deliver Health, Value

DID YOU KNOW?

After several years of decline, the frozen novelties category was up close to 2% for the 52 weeks ended Dec. 27, 2009.

Retailers can expect to see more customers eating at home, searching for value on purchases and buying more healthful food items, according to the International Dairy Deli Bakery Association (IDDBA). The association noted that key food shopper behaviors in 2010 include comparing unit prices, limiting purchases of premium products and moving to store brands for a better price.

According to IRI data for the 52 weeks ended Dec. 27, 2009, milk sales at U.S. convenience stores brought in $2.1 billion, down 18%. While whole milk was down 21% and skim milk was down 20%, milk substitutes and soy milk experienced enormous gains. This segment grew 351% with dollar sales of $1.93 million. Ice cream brought in dollar sales of $ 414.9 million, a 3.4% decrease over 2008.

Bill Hohler, category manager for Jacksons Food Stores Inc., has noticed a negative effect on single-serve ice cream sales as the economy sputtered along. “People cut back on rewarding themselves,” he said.

There have also been some price increases that have had a negative impact on the sales of pints and half gallons. Jacksons, which has 212 locations in Idaho, Nevada, Oregon and Washington, recently added a new high quality ice cream product at a lower price point to its stores, to meet customer demand for value.

“Dairy is a hotbed of new product activity,” said Alan Hiebert, education information specialist for IDDBA, who expects the market to see more yogurts and cottage cheeses containing new flavors such as trendy antioxidant fruits. Manufacturers also are adding functional ingredients like probiotic cultures for enhanced immune function and better digestive health to products such as yogurt cups and ice cream.

Health trends could also see customers opting for single-serve milk and yogurt over soft drinks and high-fat treats. “If parents see yogurt cups that can help to boost their kids’ immune function or help to reduce overall cancer risk, they’re likely to at least try them,” Hiebert said. “Of course, kids’ tastes being what they are, flavor will probably trump health claims. I think we’ll continue to see new product introductions in the dairy case to add new life to dairy categories.” 

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