Dairy Research and Trends

Supporting local businesses, from farm to fork, has been top of mind for consumers prior to the pandemic. In fact, 50% of global consumers already associated “high quality” with locally sourced products (Global Data). COVID-19 has reignited a sense of localism and community among consumers. Local businesses are adapting to support their communities and globalization is shrinking, supporting this more local mindset. With more than 4,000 dairy farms in the Midwest Dairy region, milk’s journey from the farm to the grocery store only takes about 48 hours, giving dairy a local story to tell.

Conscious consumerism has been a growing trend in recent years. Prior to COVID-19, consumers were already leaning into ethics and belief-driven buying. Over half of respondents in a 2018 study indicated they make purchases based on their beliefs (Edelman). A new study by the IBM Institute for Business Value in partnership with the National Retail Federation found that one-third of global consumers would abandon even their favorite brand if it doesn’t align with their personal values.

As a result of the pandemic, consumers are now even more acutely aware of how companies treat their employees and they are looking for an increased transparency in all stages of the supply chain. Through leading-edge technologies, consumers can be more informed and align their purchases with their own personal ethics and values. This provides opportunity for dairy brands and retailers to enhance transparency through messaging efforts.

Consumers have an increased understanding of the connection between their diet and immune health. This is not a new interest among consumers, yet the coronavirus has accelerated the growth of this trend. For the year ended March 22, 2020, U.S. total mass multi-outlet (MULO) and convenience store dollar sales of immunity products jumped 199% (IRI).

Fermented dairy foods such as yogurt and kefir have live and active cultures that are a source of probiotics, which help aid digestive health. Fermented milk is predicted to be the fastest-growing milk segment, driven by the digest health benefits (Global Data, 2020). As more people are looking for food to serve a function in their overall health and wellbeing, they will be looking to brand and retailers to communicate those nutritional benefits.

In March 2020 over half of consumers reported that they had purchased groceries online. The pandemic has generated a huge group of first-time online shoppers who, now having experienced the convenience of online grocery shopping, may return. In fact, 35% of consumers said they are very likely to buy groceries online after the stay at home restrictions have ended and 49% say they are somewhat likely (IRI).

According to a 2020 MilkPEP and Kantar study, milk currently ranks #9 in fastest growing categories in e-commerce, up 279% from this time a year ago. Separately, a MilkPEP study conducted in 2018 in partnership with Inmar showed that shoppers adding milk to their online cart had a larger E-commerce basket. There is a strong opportunity for retailers and brands to win with e-commerce and dairy.

In times of uncertainty, cutting back is par for the course. However, consumers are still looking for moments of comfort and joy. Especially as there is a growing understanding of the value of slowing down, indulgence and calming benefits will be key. From ice cream to pizza, dairy is prime for elevating real enjoyment for today’s shopper. With an increase in at-home meal occasions, dairy will also continue to grow in popularity as an ingredient.