'SMILK' , FLAVORED MILK, SPILLING INTO WAL-MART SUPERCENTERS

PAMELA BLAMEY

GREENWICH, Conn. -- A new milk beverage aimed at kids has been picked up by Wal-Mart for nationwide distribution to its supercenters.

Called Smilk and created by a company with the same name, based here, the drink is already making its mark in Midwestern dairy cases, accompanied by aggressive television, radio and print advertising campaigns.

It is a fruit-flavored milk beverage currently in supermarkets such as Farmer Jack, Kroger, Felpausch, Family Fare and Great Day Foods, according to company executives.

Smilk's latest coup, securing a contract with Wal-Mart to provide the product to its supercenters nationwide, promises wide exposure for the line.

"We've carried it for a few months in our supercenters," said Suzanne Harmon, spokeswoman for Wal-Mart, Bentonville, Ark. "It's a new item, still under evaluation," she said, and declined to comment on the product's performance.

Smilk capitalizes on two trends, namely the importance of marketing to kids and the resurgence of interest in milk consumption following the successful "milk mustache" campaign.

Available in three flavors, the nonfat milk is low in sugar and contains 30% of the recommended daily allowance of calcium, according to Blair Gensamer, president and chief executive officer of Smilk.

One Midwestern retailer carrying the product told SN it has gotten off to a positive start.

"We introduced it earlier this summer and it's been doing a reasonable job for us," said Joe Sakowski, store manager for Great Day Foods, an independent in Grand Rapids, Mich., where Smilk is working with a local dairy company, Country Fresh, to produce and distribute the product.

"We're averaging about a case a week, so it's not tremendous movement, but it's still a new product," Sakowski said. "We had some very aggressive pricing on it to start with, and we built big displays with balloons.

"Also, we have a progressive breakfast every year, where customers get their breakfasts free, so we handed out pints of Smilk to kids free.

"We really have worked hard to get the customers to try it. It's the type of product that most people wouldn't try, so the key is to sample it on your heavy traffic days, get it in to the kids' hands."

The strawberry flavor inspires the most sales at Great Day. And all the flavors do better when they're on ad, he said.

"We were really aggressive on price, at the beginning -- we ran it at half price when we first kicked it off. Probably at least once a month we do something with Smilk."

The product's nutritional attributes are a big part of what make Smilk palatable for parents, Gensamer said.

"We really developed Smilk to encourage kids to drink more milk, which is a simple concept but a complicated proposition," he told SN.

The results are the original three flavors of Smilk: strawberry, raspberry and orange vanilla, with a new blend called Tropicow to be introduced shortly.

After initial market research, Smilk discovered that fruit flavors were more appealing to kids than chocolate or other flavor profiles.

"Historically, the dairy industry has really offered one flavor of milk, and that's chocolate, and when you take fat out of chocolate milk, it doesn't taste like rich, creamy, full-fat chocolate milk, which has historically driven the milk category. Our product is really in line with what kids' flavor preferences are."

Though Smilk is targeted at kids 15 years and younger, secondary target consumers are young women and mothers, in light of milk's widely publicized role in helping to prevent osteoporosis.

A big boon for retailers will be the cross-merchandising opportunities afforded by the combination of Smilk and cereals, said Gensamer.

"Virtually every picture on a cereal box shows fruit, but there's no fruit in that box. So what Smilk brings to the table is nonfat milk and fruit flavors. What usually happens is that mothers bring home whole or 2% milk, and kids use it on high-sugar cereal like Fruit Loops or Cap'n Crunch. With Smilk they can use it on low-sugar cereals like Cheerios or Rice Crispies or private-label versions. It's a better breakfast and probably a cheaper alternative and kids get a tasty breakfast of what they like."

To market the product to kids, Gensamer said, the development of a spokes-character was essential. Smilkster, the cow with sunglasses and colored spots representing the fruit flavors, is prominently featured on the package and in her own commercial. "One girl actually wrote to Smilkster. It's the character that really draws kids into the product," said Gensamer.

Gensamer said establishing brand equity for a national dairy product is difficult. "Our name is a combination of 'smile' and 'milk,' and it gives us that element that is so vital to building a brand name.

"There really has been no branding nationally -- there have been several flavored milk attempts, but it's 'dairy name' strawberry or 'dairy name' banana milk, and it just doesn't fly. There's no separate identity."

Supplemental to the advertising campaign are point-of-purchase materials. "Our store observations of product movement suggest it's very important to get the merchandising cards up, because when they're up, sales are higher."

Another factor in Smilk's potential success is: location, location, location. "What we are finding is that stores with higher volume sales have merchandised Smilk in the white milk half-gallon and gallon sections, whereas lower movement stores are merchandising it in the quart by-product section."

Future plans for Smilk include more flavor profiles and half-gallon sizes.