Spotlight on the dairy department
Many U.S. consumers enjoy a variety of dairy products throughout the day – from milk and yogurt in the morning to ice cream as an after-dinner treat. And according to "Dairy Meal Solutions: Merchandising Works," an April 2012 report from the Rosemont, Ill.-based Innovation Center for U.S. Dairy, shoppers include dairy products in more grocery trips than items from nearly every other aisle.
Therefore, retailers will want to make sure they have a well-stocked dairy department with plenty of private label options for shoppers. Retailers also will want to make sure they properly merchandise their own-brand dairy products to clearly communicate their value and quality.
To learn what retailers are doing well and not so well here, we visited the dairy departments of three stores: a Kroger in LaPorte, Ind.; a Meijer in Michigan City, Ind.; and a Family Fare (a Spartan Stores banner) in Dowagiac, Mich. Our visits took place on a Friday in early January between noon and early evening.
Kroger
General observations: This Kroger stores dairy department runs in an "L" shape along most of the stores left-hand wall and a small part of the back wall (looking into the store from the front entrance), with two open refrigerated cases in the middle of the department. Ice cream and frozen novelties are contained in a separate aisle nearby. Foot traffic was pretty strong in the dairy department.
Of the three stores we visited, Kroger featured the widest array of private label items in the dairy department, with most national brand products having a private label counterpart under the Kroger brand. Other brands in the dairy department are Kroger Value and Private Selection, as well as the recently introduced Simple Truth and Simple Truth Organic brands of natural and organic products, which replaced the Naturally Preferred, Naturally Preferred Organic and Private Selection Organic brands.
The upside:
- The department was clean and organized.
- The store hung racks on several freezer-case doors in the ice cream and frozen novelties section to cross-merchandise a number of store brand products, including ice cream toppings, sprinkles, disposable spoons, moist wipes and more. It did the same with other products on refrigerator-case doors in the milk section.
- The store featured signage reading, "Discover our richer, creamier ice cream" and "Indulge in our most decadent creations" on two freezer-case doors to draw attention to its Private Selection line of premium ice creams. In a rack cross-merchandising Home Sense spoons with the ice cream, it offered coupons for 50 cents off 16-oz. containers of Private Selection ice cream.
- Above the doors on the milk case, Kroger hung "Fresh Longer" signs that read "Thanks to improved ordering and delivery, Kroger milk now comes to you faster."
- On a refrigerated-case door in the milk section, the store hung a sign promoting milk and cereal under the Simple Truth and Simple Truth Organic brands.
The downside:
- An open refrigerated island holding Kroger brand and national brand cheese, eggs, butter, juice and more was pretty empty on one side.
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Meijer
General observations: The dairy department in this Meijer store runs in an "L" shape along the back left-hand corner of the store (looking inside from the front entrance), with ice cream and frozen novelties retailing in a separate aisle closer to the front of the store. Foot traffic was pretty strong in the dairy department.
Meijer offers an extremely wide selection of products in its dairy department. A large number of national brand products had store brand counterparts under the Meijer brand. Other store brands spotted here include Meijer Organics (for milk and eggs) and Lunch-umms (for kid-friendly lunch kits).
- The department was clean and organized.
- Almost all of the milk and egg facings were under the Meijer or Meijer Organic brand.
- The store positions a doored freezer as an end cap for the ice cream and frozen novelties aisle. The sign above it read "Featured Items," and almost all of the products inside were 48-ounce cartons of Meijer brand ice cream.
- In a refrigerated coffin case, we found 12-ounce bags of Meijer Fancy Shredded Cheese with a large sign boasting a $2.99-per-bag sale.
The downside:
- We spotted several instances in which the store did not match or one-up a deal on a national brand product with one of the items store brand counterparts.
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Family Fare
The Family Fare stores dairy department takes up a large part of the left-hand side of the store (looking in from the front entrance); an aisle for ice cream and frozen novelties is located nearby. Foot traffic was rather light in the dairy department, with few people walking through while we were in it.
Of the three stores we visited, the Family Fare had the fewest store brand facings. Most of the store brand products in the dairy department are under the Spartan brand. Other brands spotted here were Full Circle (for natural and organic products), Valu Time (for bulk ice cream containers) and Nostimo (for Greek yogurt) from Skokie, Ill.-based Topco Associates.
The upside:
- The department was clean and organized.
- The store hung tags communicating a price freeze under a number of its own-brand products.
- On a shelf of egg cartons, the store hung a tray cross-merchandising Spartan ground black pepper.
- Under the cottage cheese containers, the store placed a "FREE with yes" shelf-talker and tags offering a free 16-ounce container of Spartan brand cottage cheese in exchange for 300 yes Rewards card points.
- Near the checkout counters toward the right-hand side of the store (looking in from the front entrance), we found an open end-cap refrigerated case with a "Faster for You" sign above it. Inside the case, the store placed 1-gallon jugs of Spartan brand milk and trays of Spartan brand eggs.
The downside:
- The yogurt section was in desperate need of restocking.
Cross-merchandise to sell
Cross-merchandising can go a long way to boost own-brand sales within the dairy department. For example, retailers could pair store brand yogurts – especially Greek yogurts – with private label granola, says Jim Dimataris, director of processor relations for the California Milk Advisory Board (CMAB), South San Francisco, Calif.
"Display convenient smaller packages – 12-ounce to 20-ounce – of granola in a side stack by the yogurt or in a display directly across from the dairy case," he suggests. "These are healthy low-cost yet higher-end margin items, making it a win-win for consumers and retailers. The same could be said about fresh fruit or bakery items that could be paired with yogurts."
For own-brand cheese, retailers could think big during Super Bowl season and build a gargantuan goal post out of cheese, around which they could merchandise private label packaged cheeses and complementary store brand and national brand items (such as jams, jellies, crackers and chocolate). Marilyn Wilkinson, director, natural product communications with the Wisconsin Milk Marketing Board of Madison, Wis., says her company worked with San Antonio-based H-E-Bs Central Market chain and BelGioioso Cheese, Green Bay, Wis., on such a project.
In the milk category, cross-promoting private label goods with in-store bakery cookies – or other bakery items – in a weekend demo will increase sales of both, Dimataris points out. And if the milk has the "Real California Milk" seal, retailers could encourage customers via circulars and other materials to print out coupons for 35 cents off any item with the seal from the CMAB website (www.realcaliforniamilk.com).
And during ice cream season, retailers could establish a limited-edition ice cream program with six to eight unique store brand varieties introduced each year in calendar quarters, Dimataris notes.
"Display the limited editions in the front-end freezer cases and feature in store ads," he says. "Some of the items could end up as regular flavors, bumping slower-moving flavors while keeping the category fresh and customers coming back to see whats next."