"Dairy provides one of the best returns on invested capital," said Doug Adams, president of the Prime Consulting Group. "Only produce, bakery and deli outshine dairy for those in the grocery business."
Adams gave those comments during a presentation titled "Dairy Dynamics at Retail: Opportunities for Growth" to those attending this year's Dairy Forum hosted by the International Dairy Foods Association. That event held in late January in Phoenix had nearly 1,200 attendees and has become among the world's largest dairy processor events.
Even though dairy is a major profit center to grocers, it doesn't get its fair share of space. That complex issue was the focus of Adams' presentation.
"Dairy generates $16.03 per a linear foot of grocery store space each week," said Adams. "Yet, milk has less space than juice. Remember, it delivers twice the profit."
In making those statements, Adams pointed to the Willard Bishop Grocery Super Study that is helping those selling dairy products to convince grocers to reinvent the dairy aisle. That could yield tremendous opportunities not only for grocers, but the entire dairy sector as that study noted consumers purchase beverage milk 31 times per year. With better in-store presentation, the number of purchasing events could improve.
"The dairy case is a $60 billion category and beverage milk is one quarter of that," said Genevieve Poirier-Richards with the National Fluid Milk Processor Promotion Board. "With the value dairy brings to grocers, we hope to make some inroads in presenting dairy to consumers."
(c) Hoard's Dairyman Intel 2016
February 22, 2016