Consumers increase dairy purchases: One-stop shopping becomes important for buyers

ST. PAUL, Minn. — The coronavirus has significantly impacted the amount of dairy purchases consumers are making at grocery stores.

“Pre-pandemic dairy was floating along at 2% to 3% growth,” said Larry Levin, executive vice president, market and shopper intelligence, at IRI.

“Now the dairy industry has risen above the rest of the edibles with our industry coming in at 22% growth during the post-panic era,” Levin reported during the virtual Dairy Experience Forum organized by Midwest Dairy. “Dairy is a little better than total edibles.”

During the time period of stock-up buying, Levin said, consumers reduced the number of shopping trips to stores.

“We have plenty of people who continue to tell us they are avoiding shopping except for every couple of weeks,” he said.

IRI provides big data, predictive analytics and forward-looking insights to retailers, financial services and media companies to grow their businesses.

“Some of the research we’ve done has shown a depression in the dollar share for weekend shopping versus midweek shopping,” Levin said. “There are more dollars associated with midweek shopping than in the past.”

Consumers are not treasure hunting as they shop in grocery stores.

“Consumers are telling us they’re going to shop no more than 20 to 25 minutes per trip,” Levin said. “It’s really important to have a pre-shopping experience for the consumer, to do promotions before people shop because they’re not looking for new product innovation, they’re looking to get in and get out as quickly as they can.”

E-commerce significantly increased as the COVID-19 restrictions were established for people throughout the United States.

“One-fourth of the U.S. population has tried online delivery of dairy products and 70% say they’re going to continue doing it,” Levin said.

“We’ve got a franchise of new consumers that we’ve got to be ready to deliver to and at the same time recognize the barriers,” he said. “Some people are concerned about the delivery fee with the high proportion of Americans unemployed.”

Dairy Sales

The dollar sales for dairy products have grown significantly.

“Butter increased 17%, milk saw significant growth along with cheese and yogurt,” Levin said. “Butter wins a little bit more than some of the other categories because it becomes such an important element in baking.”

People returned to buying more dairy products during the pandemic, Levin said, for several reasons such as kids eating at home instead of at school.

“Dairy provides the ability to feel comfort and to feel healthy at the same time,” he said. “Our industry has always delivered for consumers and this is a time when nostalgia works.”

During the first couple weeks of panic buying, Levin said, Kraft added over 1 million new users of macaroni and cheese.

“This is when tried and true comes into play and nothing speaks tried and true better than the dairy industry,” Levin said.

“One-stop shopping is really important for people so they’re not looking to go to multiple outlets,” he said. “The more we have the right product in front of the right people, we have the chance to win.”

Some aspects have become less important to consumers as they deal with COVID-19 challenges.

“To some people dairy is dairy although that may not apply to yogurt where there’s a lot more branding,” Levin said. “Recyclable and organic becomes less important because now it’s about getting what I need for my family.”

Dairy products are consumed during a wide variety of times during a day.

“Our category knows no time boundaries, but importantly we’ve seen big growth in terms of consuming dairy,” Levin said. “Forty-nine percent of consumers are using more dairy in breakfast, 45% more as a morning snack and one-third of people are using it for an evening snack.”

Prior to the pandemic, Levin said, about 20% of the population said they make 90% or more of their meals at home.

“Since COVID more than 50% of the population is making virtually all their meals at home,” he said. “This is a great opportunity for the dairy industry to make dairy primary or an additive to so many meals consumers are cooking.”

Levin encourages the industry to cross promote across the dairy case instead of components of the case.

“We’ve seen more butter used for breakfast, cheese for homemade pizza, milk as an ingredient in recipes and yogurt as a snack,” he said. “Yogurt is a great alternative to other traditional snacks.”

The goal for the industry, Levin said, is to position dairy as an enabler to achieve homemade, healthy meals that are fun and engaging.

“Think about ways to drive more health and wellness maybe around yogurt with probiotics or weight management,” Levin said.

“We need to embrace partnerships with delivery companies and think about ways we can made sure the consumer is confident the product will show up safe,” he said. “And we need to emphasize the affordability of dairy and bring cost savings to the consumer because we know they’re stretched.”