Retailers are looking for ways to breathe new life into the dairy segment with limited-time-offer (LTO) flavors and plant-based alternatives.
Unit sales of dairy milk plunged 9.8% for the 52 weeks ending Jan. 1, 2023, according to IRI. Dollar sales for the same period were flat at 1.6%. Unit sales of flavored milk fell 11.6%, with dollar sales down 2.3%.
But flavored milks have helped boost the dairy category for Weigel’s, which operates its own dairy.
“Our marketing team and our production team have done a fantastic job of running LTOs on flavored milk,” said Elizabeth Hoffer, vice president of food service for Weigel’s, which operates 73 stores in east Tennessee.
Weigel’s introduced an Orange Creamsicle flavor for football season, in honor of the University of Tennessee, whose colors are orange and white. In February, Weigel’s offered a Red Velvet milk. This March it’s introducing a Cookies & Cream flavor.
“We sell (flavored milk) in pints and quarts. And our pints and quarts have doubled over the last couple of years,” she said. Gallons, however, have declined.
Weigel’s pairs bakery items with flavored milk LTOs to draw attention to the dairy door. For example, it’s launching a Cookies & Cream Bismark along with the Cookies & Cream Milk.
Weigel’s is also watching the plant-based milk trend. Unit sales of plant-based milk were up 15.8% in 2022, with dollar sales up 19.1%, per IRI. Unit sales of oat milk (up 34.8%) and coconut milk (up 51.4%) led the growth in the segment.
Currently, Weigel’s is researching and sampling as it prepares to create its own plant-based dairy items. One item it’s considering making is an oat milk creamer. First, it’s testing branded oat milk creamers in its cold wells to gauge customer response.
“Because we are in the Southeast, we weren’t sure if we were going to have the demand for it, but the demand has been there,” she said.
When it comes to ice cream flavors, growth was driven by Cookies & Cream, Strawberry and Chocolate Mixes in 2022, noted Whitney Atkins, vice president of marketing for International Dairy Deli Bakery Association (IDDBA), citing IRI data.
Michele Tietyen, industry relations coordinator for IDDBA, noted IDDBA has released “Five Guiding Trends” it sees as important “in this reset year.”
One trend is “Newstalgia,” which means old favorites like Cookies & Cream are attracting attention.
Overall, Hoffer said, customers want innovation from the dairy category: “Something fun, something new, something exciting.”
Hoffer expects the dairy category to be flat in 2023, noting she expects the innovation Weigel’s is adding to help the category hold steady. “And then with the plant-based items, we hope to see some growth,” she said.