STUDY: DAIRY IS MAINSTAY AT SUPERMARKETS

LIZA B. ZIMMERMAN

ROSEMONT, Ill. -- Nearly 70% of supermarket transactions include at least one dairy product, according to a recent dairy industry study.

The study, "Understanding How to Drive Dairy Department Performance," prepared by Willard Bishop Consulting, Barrington, Ill., for Dairy Management Inc. here, combines consumer insights and behavior, retailer perspectives and dairy performance data. Research was conducted during the last four months of 1996 and the study presented for the first time this month at a conference here.

The one-day conference, intended to present and explore the study's findings in an interactive forum, was attended by about 40 industry professionals, many of them supermarket dairy category managers.

The study is divided into six chapters that explore consumer and retailer perspectives on the dairy case, dairy performance benchmarks, how to improve performance through cost management, an analysis of consumer transactions and dairy purchase behavior, and suggestions for targeting promotions in the dairy department.

A statistic from the study cites that more than 90% of milk is purchased at the supermarket, causing Bill Bishop, the president of Willard Bishop Consulting, to conclude in his introduction that "supermarkets still dominate the milk category."

Bishop also noted "the dairy department has significantly higher profitability than other supermarket departments."

Dairy, according to the study, accounts for 9% of the store dollar, a figure that has grown by 5% since a similar study conducted in 1990.

Another key finding showed that 85% of milk purchases are planned even before the shopper enters the store.

Another important highlight of the study Bishop touched on was the importance of keeping a clean dairy.

"Food safety is a concern and it's closely related to store cleanliness," he explained, and said that customers will often choose another retail operation before purchasing from a store with a dairy department they deem to be dirty.

Taking all these factors into consideration, Bishop concluded "retailers can focus on other areas beyond price when promoting dairy."

Individual segments of the study went on to focus on how to merchandise in the dairy department; how best to market to the different categories of milk and cheese users the study mapped out; and the importance of developing and targeting consumer-loyalty marketing programs.

Depending on the success of the seminar, during which participants were given a copy of the study, Willard Bishop and DMI said, they were considering holding several more across the country.

DMI is the domestic and international planning and management organization responsible for increasing demand for dairy products on behalf of U.S. dairy farmers. The organization manages the American Dairy Association, National Dairy Council and U.S. Dairy Export Council.