Dairy, ice cream and frozen foods: Dairy Leads Private Label Herd

Consumers grabbed a single-serve milk more than one billion times last year, according to Dairy Management Inc.’s CEO Tom Gallagher, who expects the number of quick-serve establishments promoting milk to exceed 50,000 in 2008.

Dairy products lead retail sales of private label products, which Packaged Facts forecasts will grow at an annual rate of 5% through 2009 to $58.7 billion.

Industry analysts agree it’s important that private label retailers create an aura for their brands that encourages customers to view their stores as end destinations instead of stops along the way.

"We do try and position our brand, of which our dairy is a big part, as a destination," said Robert Perkins, marketing director for Rutter’s Farm Stores, which began in 1967 as an outlet for Rutter’s Dairy products.

Rutter’s positions its private label milk as hormone-free. "I believe the consumer wants to buy a brand that they feel they can trust," Perkins said. "Our brand is not positioned as a value brand but more of a quality brand."

Perkins pointed out that the dairy category is predominantly shopped by women, and that capturing this segment means making them feel good about their purchase decisions.

Two good reasons for milk sales growth are that the health benefits of milk have been widely publicized over the past couple of years in both TV and print ad media and processors are creating value-added milks that tie into consumers’ growing concerns about health and nutrition.


Energizing Dairy Sales

The International Dairy Deli Bakery Association (IDDBA) reports that dairy-based energy and sports drink beverages are likely to be the next big trend, thanks to a well-publicized study by researchers at Indiana University that showed chocolate milk makes a sports and recovery drink as good or better than sports drink brands.

With obesity concerns and the desire to control weight uppermost on the minds of many consumers today, dairy products offer yet another benefit because research indicates that including dairy products in the daily diet helps dieters shed pounds faster.

Per capita U.S. yogurt consumption has more than tripled since 1980. Specialized probiotic yogurts accounted for $294 million in U.S. sales in 2006, and that number is expected to jump to $500 million by 2010, according to Euromonitor International.

More than 8,300 new yogurt and probiotic drink products have hit the shelves in the past three years. Among the most popular brands are Wells’ Dairy’s Blue Bunny Lite 85 yogurt, Yoplait’s Yo-Plus with Optibalance and Dannon’s Danimals and Dannon’s DanActive dairy drink. New yogurt products formulated to suppress appetite while making consumers feel satisfied are also on the way.

Though not because of weight loss or health concerns, ice cream sales grew by 5% in 2007—hardly surprising as the U.S. is the largest ice cream consumer in the world, eating an average six gallons per person per year. Packaged Facts estimates that the U.S. market for ice cream and related frozen desserts reached $23.3 billion in 2007, up 4% from $22.4 billion in 2006, and up 12.8% from almost $20.7 billion in 2003.


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