Very few product categories have come under more price pressure than milk in recent years. How can retailers make the best of the white stuff? One way is to think carefully about range, styles and sizes and to make sure your fridge isn’t only about basic milk at basic prices.
LAST year was a challenging time for the UK dairy industry, giant milk producer Müller Wiseman told Scottish Grocer. Through 2012 a series of disputes and demonstrations by farmers over the price paid by some processors for liquid milk generated a feeling of unease among farmers, producers and retailers, the firm said.
And, quoting data from research firm Nielsen, it said problems certainly hadn’t been confined to that single year. The stats show that in from 2009 to 2012, the total retail value of the UK fresh milk market fell by £231m (from £2.92bn in 2009 to £2.69bn in 2012). However, the total volume of milk sales rose by 36m litres in the same period, proving, Müller Wiseman argued, that, even if the price of milk had been substantially squeezed, UK consumers were still keen on the white stuff.
And the firm says its customers have remained loyal to its Black and White fresh milk range and in particular to its regionally identified products such as Grampian milk and Milk from Scotland.
It reports the Black and White brand is now worth over £111m – a growth of 6.9% since 2012 – with more than £109m of that being sold through convenience outlets. In Scotland Black and White had a volume share of 9.5% at March 2013 – an increase of 2.2% on the previous year. Sales value in Scotland reached just over £29.3m.
Looking forward Müller Wiseman Dairies plans to continue to emphasise regionality and traceability on its Black and White brand products.
It will also produce special-edition and seasonal packs.
The firm says the purchase of milk is the number-one reason that shoppers who are topping up household supplies visit c-stores. But it reckons there’s still huge potential for growth in convenience outlets because milk offers and deals can target the four out of five UK shoppers who currently don’t buy their milk from c-stores.
Müller Wiseman’s top tips to make the most of c-store milk cabinets include:
• Ensure refrigerators keep the milk below 5ºC. That ensures that the chill chain, unbroken from the farm to the point of delivery, is maintained in the store.
• Review the chiller every hour to ensure it is tidy and that stocks have been rotated to minimise waste.
• Review ordering to take account of shopping patterns, research suggests that most milk is sold after 3pm.
• Make sure the milk can be seen from the door of the store. Ensuring the most popular lines (especially two-litre packs of semi-skimmed milk) are at eye level will help boost sales.
At filtered milk brand Cravendale the team also noted that the milk market is tough and that value remained important.
So it argues that it’s vital for retailers – c-store retailers especially – to find ways to add something different to their milk range (it has launched Cravendale in a variety of sizes to suit different types of store) and to encourage linked purchases to increase the total amount spent by shoppers.
Interestingly, it says milk purchasing is increasingly being carried out by dads and suggests link-deals with dad-friendly products might be particularly effective.
In its tips it says retailers should
• Merchandise by the fat type of different milks. Shoppers buy according to colour with green recognised as semi-skimmed and then by format, in other words by style of pack and size.
• Ensure that sufficient space is allocated to each fat type – semi-skimmed sells best and needs most.
• Ensure choice. Shoppers can be traded up if another option – for example Cravendale – is clearly available beside standard milk.
• Use link-saves. As 39% of milk use is with cereal, an offer can attract an impulse sale.