Fluid milk sales are on the rise after years of decline and the industry’s Checkoff marketing campaign, MilkPEP, wants to keep the momentum going with a new market intelligence platform dubbed Milkscape that reveals emerging consumer trends and retail strategies.
Based on data from research groups including Circana, Numerator and Mintel, Milkscape offers milk processors and retail partners free access to data and analytics tools that are often too expensive for individual stakeholders except large CPG players, but which can be fundamental to creating effective sales, advertising and innovation strategies.
It also goes beyond the basic numbers to explain to users why certain shifts are happening, and how they impact the total basket by pulling on data in related categories – helping stakeholders seize opportunities and address challenges, explained Al Dejewski, MilkPEP SVP, Marketing.
“Milk has stabilized over the last three years and it is starting to see green shoots of growth,” but it also exists in a very different competitive environment than it did 25 years ago and needs a new way to tell its story so it can maintain and gain shelf space, Dejewski explained.
“What we’ve seen over the last 25 years is a proliferation of new beverages across the entire RTD category – all designed against specific need states, whether it is energy, strength, recovery – you name it,” but dairy milk has not had a lot of innovation in the last 50 years, he said. “We are still drinking out of the same one-gallon jugs that I grew up with and we are still drinking out of those 8-ounce cartons that are difficult to open for kids in school.”
Milkscape allows processors and retailers to spot innovation opportunities and better tell a consistent story about milk’s recovery and future growth potential so it can take back some of the shelf space it has lost in recent years to “some of the other higher-priced, lower-turn alternatives,” Dejewski said.
The platform is able to do this not only because it brings together multiple sources of sales data, but it also leans into AI to streamline the workflow and analysis in a way that anyone can use its dashboards and real-time snapshots to tell both the national story and show the hyperlocal reality, he added.
Where does Milkscape predict growth for dairy milk?
Dairy milk is well positioned to not only meet health and wellness trends, including rising demand for whole foods and products with lower sugar and higher protein, but it also can deliver economic value, and Milkscape shows how, said Dejewski.
“There is nothing that delivers protein as efficiently per dollar than a serving of milk,” he claimed, adding: “Milk is on the right side of truth and trend.”
Part of what makes milk appealing is its versatility – including different levels of fat, flavors and sizes. But there is still room for product development beyond the basics of skim, 1%, 2% and whole milk.
“Lactose-free is our No. 1 driver of milk growth right now. So much of the American population self-diagnosed as lactose intolerant and now we have a lactose-free option in every market in America. We have ubiquity in lactose-free in a variety of fat levels” and even as a chocolate milk, Dejewski said.
Ultra-filtered milk is another area of high growth because it not only removes the lactose but reduces the sugar and increases the protein deliver of milk – allowing it to check multiple boxes in one bottle, he added.
Changing channel strategies
By innovating packaging size and type, dairy milk also has potential to grow in channels where it has traditionally struggled.
For example, convenience stores in theory should be a stronghold for milk given its position as a staple in many homes and high velocity. But the higher price point of a gallon may make the product feel out of reach at gas stations where consumers currently are paying more for fuel, acknowledged Dejewski.
But by using Milkscape, stakeholders can identify alternative package sizes and varieties better suited for c-stores today.
“What we’ve seen is that a gallon of milk doesn’t sell there at $8, so they have really shrunk the size of the foodprint there. But where we are going to win back into convenience stores is around the single-serve package and broader range of options, including half gallons, quarts, whole milk, lactose-free, organic and ultra-filtered products,” Dejewski explained.
“It is about modernizing the assortment against the modern consumer palate and need states,” he added.
Innovating for the next generation
Changing sentiments around milk as well as access to more varieties also are boosting appeal and consumption among younger consumers, according to Dejewski.
“The good news is that Gen Z is coming into its buying power at a time when dairy milk is benefiting from several trends. Number one is the MAHA movement, without getting political, which promotes whole milk, whole foods and a lack of artificial anything. Number two, milk plays squarely into the new Dietary Guidelines, which will allow schools to once again offer whole milk as an option, which is better sensory experience,” he explained.
The industry can further engage with younger consumers by increasing the availability of milk in food service, Dejewski said.
He explained that younger consumers dine out much more frequently than older generations, but while milk is often available at home eight out of ten menus don’t offer it.
“On-the-go is a big challenge for us, but expanding single serve is also a big opportunity,” he said.
Building a bigger basket
Dairy milk also has an opportunity to earn more shelf space at retail by better highlighting to retailers how it exponentially boosts overall basket sales by pairing with products across categories, Dejewski said.
According to Milkscape and recent Circana panel data, grocery baskets containing dairy milk ring up nearly twice as high per trip than those without it at average of $88.79 compared to $46.23.
Dejewski says this is partly due to how many foods it complements or is frequently served with. Cereal is an obvious partner, but potentially more surprising are bananas, which are the second most common pairing, he said.
He also argued that if milk is not available, consumers may not buy as much or they may even abandon their carts if they are unwilling to leave without a full compliment of groceries.
Milkscape’s next steps
The iteration of and data available through Milkscape now is just the beginning, according to Dejewski.
“We have a tremendous amount of consumer data that doesn’t live with our partners and we are investing in using it to create personas for each of the different accounts to so that [processors and brands] can better customize their offering for retailers’ guests,” he explained.
In 2028, MilkPEP also plans to introduce tools to help with planograms and merchandising as well as promotional thought starters that will help boost sales. Hand-in-hand, the platform aims to help retailers better estimate how much to buy so they don’t have out-of-stocks when those campaigns hit, Dejewski said.
Ultimately, he said, “we want to make sure that we think about the business through the funnel. Milk doesn’t have an awareness problem. But, over the last few years, it may have an attitude problem with certain shoppers or preferences. So, how do we take the promotions and programming we create and put it through milk SKUs so that the processors know what to sell against and how to bring it all together.”
