Grocery sales in 2023 totaled $678 billion, with about $90 billion of those purchases coming from an online source.
Interestingly, about $470 billion – or nearly 70 percent – of all grocery sales were digitally influenced. This means a consumer was impacted by something like a pop-up ad either web surfing or scrolling through their social media channels. In fact, the growth of online touchpoints available from manufacturers, processors, and brands has nearly quadrupled in the past five years.
This is why the dairy checkoff is engaged in a retail strategy that covers both the online and bricks-and-mortar shopping experiences. With domestic retail sales accounting for about one-third of all U.S. milk production, this full retail buying experience strategy makes sense.
Here are some examples of checkoff efforts in the retail space.
Dollar General collaboration – there are more than 19,000 Dollar General stores in the U.S., and they have become a growing grocery destination in many rural communities. Seventy-five percent of Americans live within five miles of a Dollar General location, and it has expanded its portfolio, which includes offering more fresh food, such as dairy and fruits and vegetables. Dairy has done well with 30 percent sales growth year over year.
This led the checkoff to initiating a program with nearly 8,400 Dollar General stores, which Dairy Management Inc. (DMI) conducted with state and regional checkoff teams American Dairy Association North East, Dairy MAX, Midwest Dairy and United Dairy Industry of Michigan. Shoppers who visited the cookie aisle saw signage, or “shelf talkers,” with dairy-focused messages, such as “Don’t Forget The Milk. Your Cookies Will Thank You.” And “Milk And Cookies. A True Slam Dunk.”
There also were shelf talkers in the dairy case touting “real” dairy. Messages there included “Milk. Good Value For What You Value. Pick Up Your Real Milk Today.” And “Cheers To Your Health. Pick Up Real Milk Today.”
The program ran for eight weeks at the end of 2023 and into January and resulted in an 8.7 percent increase in sales compared with the same time period from a year ago, equating to $3.8 million incremental dollars and 8.65 million incremental pounds of milk sold. Because of this success, we will work again with Dollar General later this year with a “back-to-school, back-to-sports” focus.
Instacart keeping dairy top of mind – Instacart is the leading grocery technology company in North America that provides delivery and pick-up service. Customers can order groceries from an app featuring regional options from its bank of 80,000 retail locations. About 85 percent of all brick-and-mortar stores are represented, including major brands such as Costco, Food Lion, BJ’s, Wal-Mart, Ralphs, Kroger, Publix and many others. In 2022, Instacart recorded $28.8 billion in transactions with each sale averaging about $110.
The search function within an app or website helps determine a product’s success. When consumers enter a word into the search function, they’ll have several options to choose from but about 80 percent of purchases result from the first options to appear.
Unfortunately, non-dairy alternatives that use the name “milk” can show up in these searches.
The checkoff’s investment in Instacart, which includes state and regional checkoff participation, has helped keep real dairy at the top of Instacart searches. This matters for many reasons, including that milk is the most searched-for item on Instacart and we want consumers choosing real dairy!
Twelve state and regional checkoff teams are helping drive awareness of real dairy products with promotions on Instacart surrounding holidays and June Dairy Month, as well as awareness efforts on lactose-free milk and unique ways to use cream cheese.
This strategy drove results for dairy during an activation phase in December and January. For every dollar the checkoff invested into these efforts, we saw a return of $15.22 in sales. We also saw it drive nearly 18 percent of new shoppers into the dairy category.
There are other opportunities ahead for dairy at the retail level. One of the most encouraging aspects of this work is our ability to cover the country and online space thanks to the national and local checkoff teams coming together and combining resources.
We need to show up consistently for the category and our farmers and deliver the dairy story in a unique, efficient and timely way that is received by the end user who ultimately will decide if they are adding dairy to their real or virtual shopping cart.
By activating as one checkoff, we’re creating a better path to purchase.
To learn more about your national dairy checkoff, visit www.USDairy.com/forfarmers or to reach us directly, send an email to TalkToTheCheckoff@dairy.org.
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