DON'T SQUEEZE THE DAIRY, REPS SAY

CHRIS YTUARTE

WILTON, Conn. -- The exploding retail dairy business isn't getting the space it needs in the store, and these restrictions are impeding growth throughout the category, concluded a panel of industry representatives.

The Dairy Dollars roundtable, sponsored by Dairy Management Inc., Rosemont, Ill., brought together several industry organizations, producers and a retailer to generate ideas and solutions for the dairy community in addressing the squeeze on merchandising space -- and by extension, profit potential. The purpose of the meeting was to "provide an environment for industry representatives to share a level playing field" and discuss these issues, said Bill Glass, vice president of Connecticut Marketing Associates.

At store-level, many retailers today face a diminishing amount of shelf space and display room in their dairy departments, and need to deal with these limitations on a daily basis, the participants noted.

"There's usually a lot going on as far as new dairy products, and the retailers that we have been in contact with try their best to give most of them a chance on their shelves," said Glass. "But sometimes, they just don't have the room to put it all out there when they are limited to a certain amount of space, and that can force them to be creative."

Bob Lengyel, director of dairy operations at The Village Market, Wilton, Conn., and a roundtable participant, said the meeting helped him confirm certain marketing and efficiency strategies his company employs in the dairy case.

"It's good to know that what we're doing in the store seems to be on the right track and that they're the right moves," said Lengyel. "Sometimes it's good to know what others think is good and bad, what works and doesn't work -- and you can take what you want from it."

According to Lengyel, the independent, single-unit Village Market is currently addressing space restrictions in the dairy department by cutting back on frozen foods, a category he said doesn't sell as well in affluent regions such as Wilton, where customers would rather buy fresh product. Here, the vacated frozen-food shelves are being stocked with additional dairy staples, such as cheese and milk, Lengyel said.

With more space, retailers are able to reach out to a wider variety of consumers -- especially children. The roundtable noted that targeted marketing campaigns aimed at young consumers have been successful in the past.

"Not only is it a good idea to attract kids to the dairy section so that they can tell their parents what they want, but it's good to get them into the health benefits of dairy early on," said Glass.

Such programs help adult consumers feel better about certain purchases for their children, since the dairy section -- with its healthful image -- can be positioned to better compete with some of the other, less healthy, products in the store. Given a choice, parents are often more willing to make a purchase from the dairy case, Glass added.

Manufacturers are helping dairy case managers achieve this competitive balance by introducing kid-friendly dairy products, like snack string cheese, resealable milk pints and flavored milks.

In a recent example, Bravo! Foods, North Palm Beach, Fla., rolled out Looney Tunes-brand flavored milks in six states, to stores operated by Wal-Mart, Albertson's, Kroger, Piggly Wiggly, Rite Aid, Walgreens, Amoco/BP, Exxon and Texaco. The Looney Tunes-brand 2% milk is available in 14-ounce and 1-quart sizes, and in five flavors: chocolate, featuring the Tasmanian Devil; strawberry, featuring Bugs Bunny and Lola; banana, featuring Tweety; orange cream, featuring Bugs Bunny; and, vanilla shake, featuring Sylvester and Tweety.

At The Village Market, Lengyel said the retailer has already adapted floor space to tap into the growing kids' market. A 6-foot-tall endcap has been reserved in the 110-foot dairy section, that is filled with Jell-O, pudding, yogurts and other youth-oriented products that make up what he calls the Lunch Box Section.

"We want the kids to see this display and think about what they want to have in their lunch boxes that week, as a snack or as dessert," said Lengyel. "They are a big target, and they bring their parents with them into the category."

Target marketing aside, the dairy case is identical to other departments in many respects, the roundtable noted. For one, it's critical the store and the department demonstrate cleanliness.

"Keeping things clean, especially in the dairy aisle, where things can start to smell if they're not properly taken care of, is one of our top priorities," said Lengyel. "So, it's always good to sit down and hear what other people are doing along those lines, and to hear what is most important to outsiders coming into a department."

According to Glass, the roundtable allowed retailers and manufacturers to share views on issues such as cleanliness, in which each participant may adhere to a different standard or ideal.

The roundtable was the first in a series, and each successive session will likely involve a different geographical region in the country, said Glass. This gathering addressed issues regarding the Northeast, while future meetings will do the same for other areas.