Dairy products have an important and well-recognized role in retail locations. That’s been true for many years, and it’s not a market that the industry hopes to cede in any way. That being said, leading dairy marketers also have their eyes on emerging markets, and in particular, COVID-19 has caused an expanded focus on e-commerce opportunities.

“COVID-19 has compressed the time that people were going to take to move to e-commerce, and that’s a trend that’s only going to continue,” shared Tom Gallagher, Dairy Management Inc. (DMI), during the September 23 Hoard’s Dairyman DairyLivestream presentation sponsored by World Dairy Expo.

That trend explains why the California Milk Advisory Board focused on online platforms as COVID-19 shut down more traditional avenues. “With restaurants closed and with the retail channel overwhelmed, we turned to e-commerce, which is going through a major energization during this whole pandemic,” explained the organization’s CEO John Talbot. “E-commerce has grown into a very sophisticated digital network now of e-commerce platforms, traditional retailers, purchase applications, promotion vehicles, and digital media.”

DMI has had an eye on this sales venue for several years. According to Gallagher, they have worked with Peapod Digital Labs to do sales promotion before seeing large sales increases, but they have also worked with Amazon to establish the organization as a leading authority on dairy.

“Amazon has named us as its knowledge expert for all things dairy, so we’re in a prime spot to position dairy and cooperative brands as groups that can solve problems and bring value,” the DMI CEO detailed. “Within that, I think there’s a huge opportunity to do some innovative things.”

Providing new opportunities
With the growing trend of e-commerce comes many opportunities for dairy to capture market share. Talbot described some of these opportunities during the webcast.

“The key here is that we’re now able to influence consumers much closer to the point of purchase,” he explained. “You look at some of the products we have, particularly the specialty cheeses. They are perfect for the online world because they often have a very rich backstory about how they were developed or what that particular variety of cheese is about.”

He made sure to emphasize that most online sales aren’t primarily via Amazon but rather through relationships customers already had with dairy and grocery. “E-commerce sales for dairy have more than doubled so that’s a very positive thing. The interesting thing is that it is not as much Amazon as it is the traditional retail chains offering what’s called ‘click and collect.’ That’s when you order online and then stop by and pick it up curbside,” Talbot continued.

Online dairy has both the benefit of expanded retail interaction with consumers and new opportunities to encounter them in the digital space. As the pace of change accelerates, it will be the responsibility of the industry and its partners to meet consumers where they are — online.

An ongoing series of events
DairyLivestream will air twice each month for the remainder of this year. The next broadcast “Can we sell that cheese?” will be on Wednesday, October 7. Each episode is designed for panelists to answer over 30 minutes of audience questions. If you haven’t joined a DairyLivestream broadcast yet, register here. Registering once registers you for all future events.

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(c) Hoard's Dairyman Intel 2020
September 28, 2020
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