Skip navigation

LOW-FAT VOLUME FOUND TIPPING SCALES WITH HEFTY GAINS IN DAIRY CATEGORIES

Low-fat products are continuing to gain in popularity, representing the majority of some category sales in supermarket dairies, according to analysis of scanning data from A.C. Nielsen, Schaumburg, Ill.Fat-free products in particular are gaining market share in many segments, according to national scanning data on dollar sales and unit volume of low-fat, fat-free and regular dairy products that A.C.

Low-fat products are continuing to gain in popularity, representing the majority of some category sales in supermarket dairies, according to analysis of scanning data from A.C. Nielsen, Schaumburg, Ill.

Fat-free products in particular are gaining market share in many segments, according to national scanning data on dollar sales and unit volume of low-fat, fat-free and regular dairy products that A.C. Nielsen analyzed for SN. The period analyzed was the 52 weeks ended June 1995.

Particularly high gains were made in low-fat natural American Colby cheese, which saw a 237% increase in volume over 1994; and fat-free sour cream, with a 297% volume increase.

In some cases, fat-free products appeared to have overtaken the performance of low-fat products. With sliced American cheese, for example, low-fat products saw 46.5% less volume than in the previous 52-week period; but, at the same time, fat-free saw volume gains of 20.5%.

Similarly, low-fat cottage cheese decreased by 3.1%, whereas fat-free cottage cheese rose 46.2%. In this case, the fat-free product seems to have single-handedly attracted new consumers to the segment, since overall dollar sales were down 1% from the prior year, and the only gain was the increase in sales of fat-free products.

Only 5.5% more low-fat natural mozzarella cheese moved through retailers' shelves than last year, compared with a 25% increase in fat-free mozzarella.

Yogurt was the only segment where regular dairy products triumphed over "health conscious" choices.

Nielsen's director of research, Doug Handler, said this anomaly reflects preferences of the category's smallest consumers. "A lot of this growth can be traced to the children-oriented products. But I do believe the [other segment data] accurately portray the underlying consumer trends toward consuming less fat," Handler told SN.

Retailers contacted by SN attributed the continued increase in consumption of health-oriented dairy products to recent gains in product development.

"During the past year, there has been continued improvement in the quality of both low-fat and nonfat items," Ruth Kinzey, a Harris Teeter spokeswoman, told SN. "As a result, we anticipate increased interest in the low-fat and nonfat dairy items. In fact, as long as quality continues to improve and price is in line with regular items, this trend will continue."

Having more Americans monitor or alter their diets because of health problems means the current trend will continue, she said.

Kinzey added, however, that regular dairy items still maintain more stockkeeping units than the low-fat and nonfat items in Harris Teeter's stores, simply because "there is currently more product movement in this area."

Kinzey noted that there is no particular trend in suppliers' product support for low-fat and no-fat items that makes them more attractive to consumers, so it is safe to say that the trend is consumer- rather than advertising-driven.

"Popularity of fat-free products all across different spectrums has grown significantly," agreed Duane Proulx, dairy buyer for Bashas' Markets, Chandler, Ariz.

"It's because they've used technology to make the product a lot more palatable," he said. "Improvements in both texture and taste have had an impact on sales."

In the case of Bashas' dairy departments, as with Harris Teeters', regular products still outweigh fat-conscious ones in SKU counts: "For example, with Kraft American cheese singles, we have 20% in the fat-free line; in other words, out of every 10 cases we have two of fat-free."

But Proulx said that balance is shifting. "I think it could conceivably get to the point of a 1:1 ratio over the next two to five years," he added. "Unless there's some different discovery made in terms of benefits to health -- that's really what's driving it, consumers looking for ways to cut the fat."

Proulx said he has also noticed a consumer trend away from low-fat to nonfat items, regardless of a slight gap in price. While fat-free products currently tend to carry a price point that is between a 5% and 10% premium over regular items, Proulx expects that spread to narrow.

"It's a gut feeling -- as new products gain more and more volume, any gain in efficiencies is usually translated into reduction in cost," he said.

The dairy industry itself has duly noted the growing movement of health-conscious lines. The trend is typified in the milk category.

"There is U.S. Department of Agriculture data that shows a major shift over several years to low-fat products in fluid milk," said Dick Weiss, a spokesman for Dairy Management Inc., Arlington, Va.

"The most growth has been in low-fat products. My opinion is that it's probably due to improved products with more taste -- especially in cheese. If you go back four years or so, some of the low-fat or nonfat cheese products were pretty primitive. There has been considerable product enhancement."

TAGS: Dairy