Consumer purchases of dairy products increase

ST. PAUL, Minn. — Consumers are buying more dairy products as they deal with the impact of the coronavirus pandemic.

“With dairy already in 95% of the households, we’ve learned in the past five months that increasing dairy sales at retail is possible,” said Megan Sheets, manager consumer insights for Midwest Dairy. “As of Aug. 2, dairy aisle year to date sales are up 15% compared to last year.”

As a result, Sheets said during a webinar organized by Midwest Dairy, there are lessons the group has learned that they can use moving forward into a post pandemic world.

“We reached out to Information Resources Inc. to conduct new research,” Sheets said. “IRI has a national consumer panel and they are able to identify shoppers who have increased their spending on milk, cheese, yogurt or butter by at least 25% since the start of the pandemic.”

The consumer survey was completed in late June and early July.

“Taste, household staple, nutrition and their healthfulness were all primary drivers for increased dairy consumption during COVID,” said Chris Costagli, Information Resources Inc. client insights consultant. “Among those who increased consumption they recorded that doing so left them feeling satisfied and they felt nourished, comforted and healthy.”

As businesses closed their doors due to the pandemic consumers prepared more meals at home.

“Butter volume growth is up over 32% and it’s primarily morning snack and breakfast meal occasions driving this trend,” Costagli said.

“Cheese is another prominent ingredient category,” Costagli said. “Volume sales so far this year have grown over 16% which is driven by consumption increases throughout the day but mostly during breakfast, afternoon snacks and nighttime snacks.”

Cheese consumption on sandwiches increased by 40%.

“That makes a lot of sense as kids stayed home from school and many businesses transitioned to working from home,” Costagli said. “Sandwich consumption was a perfect fit for lunchtime.”

During this year, milk volume has risen 4%.

“Ingredient is the main driver for this category with a strong emphasis on baking and desserts,” Costagli said.

Yogurt has not seen the same sales increase as many of the other dairy categories, which a little over 3%.

“That is potentially due to the single serve nature of this category and with fewer people on the go, the need for single serve products has diminished,” Costagli said. “Similarly, as workers and kids stay home, the need to pack yogurt in lunch boxes also fell considerably.”

In-store shopping at traditional grocery stores continues to be the primary method and location for purchasing dairy products, Costagli said.

“But we know there is a movement to shop online and of those shopping online, curbside pickup drove the most interest,” he said.

However, online shopping does have barriers for some consumers, including the delivery fee and tip.

“They also have a personal preference for going into the stores to make purchases because they like being able to see the products they’re purchasing, pick them up and touch them,” Costagli said. “And they miss the human interaction of being in the store and engaging with the employees.”

Online shoppers claim they are spending more compared to those shopping in store, Costagli said.

“This may be more of a perception than reality because people were stockpiling,” he said.

Also, during the peak panic buying, there was widespread out of stocks, purchase limits and shortages across the store.

“Consumers may have been buying brands or sizes they don’t typically buy at a different price point they’re not use to paying,” Costagli said. “So their perception is they’re spending more when they’re shopping.”

IRI expects to see retail sales elevated through the end of 2021.

“We’re starting to see recessionary behaviors emerge as consumers are buying larger size items and relying less on single serve,” Costagli said. “They are looking for quantity, longevity and shoppers are actively seeking the best value for their dollar.”

There is uncertainty about additional economic stimulus.

“Having any uncertainty around economic stimulus may result in driving consumers to seek more and more value from everything they’re purchasing,” Costagli said.

“One in four people bought dairy online during COVID and the majority of those began buying dairy online for the first time,” he said. “About 70% of those consumers say they will continue to do so even once COVID restrictions are lifted.”

Working from home will be the new norm for many Americans.

“Sixty-three percent plan to return to usual work locations,” Costagli said. “Among those who do, many will be in their unusual work locations part of the time.”

The change to working from home has some significant implications.

“They won’t be stopping at the coffee shop on the way to the office and they won’t be going to their favorite lunchtime spots,” Costagli said. “They’ll be working in the same place they’re living.”

“Consumers are adapting to the normal and are embracing at home lifestyles,” Sheets said. “So, the dairy category will need to adjust to evolving consumer needs to remain relevant.”

For more information about Midwest Dairy, go to: www.midwestdairy.com.