‘Dairy Department of the Future’ Launches At NGA Convention

Rosemont, Ill. Tomorrow’s dairy department will be on display Feb. 9 through
12 at the National Grocers Association 2010 Annual Convention and Supermarket
Synergy Showcase in Las Vegas. Show attendees will get a glimpse at how a
reimagined dairy aisle could increase dairy department sales by as much as $1
billion, while creating a more positive shopping experience. Visitors to the
Innovation Center for U.S. Dairy and Dairy Management Inc. (DMI) Booth 114, can
take a virtual walk through the Dairy Department of the Future via a video
presentation that showcases results of a three-year dairy farmer-funded project
that is helping to shape the future of the retail dairy aisle.

The Dairy Department of the Future research shows that a reinvented dairy aisle
can increase dollar sales by 1.6 percent and dairy unit sales by 2 percent to 3
percent. The dairy department generates superior returns on its space compared
with other departments, generating 19 percent of store profit from 3 percent of
store space. By optimizing space and creating a more shopper-oriented rather
than operations-driven department, retailers can maximize new product potential,
improve cross-merchandising opportunities and drive significant growth in sales
and profits.

The dairy industry continually explores innovative ways to increase demand for
nutrient-rich dairy products, said Thomas P. Gallagher, chief executive officer
of the Innovation Center for U.S. Dairy and DMI, which manages the national
dairy checkoff program on behalf of the nation’s dairy farmers. By building a
coalition with The Dannon Company and Kraft Foods to creatively reimagine the
way dairy is merchandised at retail, we proved a significant opportunity exists
for the dairy industry and retailers alike.

The coalition’s comprehensive testing and research show that in a reinvented
dairy department, shoppers spend more time in the aisle, have a more enjoyable
shopping experience and purchase more items overall. Starting in 2006, the
coalition analyzed 343,000 shopping trips, audited 22,000 retail grocery stores,
spoke with 2,500 consumers, and implemented category and total dairy aisle
reinvention efforts in more than 1,000 stores nationwide.

Shopper-focused design principles

The research outlines four design principles and eight best practices that
elevate the role of the dairy department within the store and improve its
positioning with shoppers. They serve as actionable options versus one redesign
solution, allowing retailers to adapt them to their unique needs, including
their format, dcor, layout and go-to-market strategy. Each design principle
describes a particular vision:

  • Contemporize: Changing shopper perceptions from old fashioned to modern,
    relevant, fresh and new.
  • Dimensionalize: Slowing down shoppers by creating a three-dimensional space
    with cross-merchandising vehicles that answer lifestyle and usage needs.
  • Rationalize: Engaging shoppers by bringing clarity and organization to
    different segments.
  • Invigorate: Inspiring shoppers by communicating the value, benefits and usage
    occasions of dairy products.

Shoppers described their experiences in the reinvented dairy department more
favorably than before the enhancements. They reported that they liked how the
new department was presented, believed the changes made shopping easier and
indicated that the new look created a more welcoming experience.

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Innovation Center for U.S. Dairy provides a forum for the dairy industry to work
pre-competitively to address barriers to and opportunities for innovation and
sales growth. The Innovation Center aligns the collective resources of the
industry to offer consumers nutritious dairy products and ingredients, and
promote the health of people, communities, the planet and the industry. The
Board of Directors for the Innovation Center represents leaders of more than 30
key U.S. producer organizations, dairy cooperatives, processors, manufacturers,
and brands. The Innovation Center is supported and staffed by Dairy Management
Inc. For more information, contact innovationcenter@usdairy.com or visit
USDairy.com.

The Dannon Company is America’s founding national yogurt company and continually
leverages its expertise to develop and market innovative cultured fresh dairy
products in the United States. Headquartered in White Plains, N.Y., Dannon has
plants in Minster, Ohio; Fort Worth, Texas; and West Jordan, Utah; and produces
approximately 100 different types of flavors, styles and sizes of cultured fresh
dairy products. Dannon is a subsidiary of Danone, one of the world’s leading
producers of packaged foods and beverages, and Dannon is the top-selling brand
of yogurt products worldwide, sold under the names Dannon and Danone. For more
information, please visit www.dannon.com.

Kraft Foods (www.kraftfoodscompany.com) makes today delicious in 150 countries
around the globe. Our 100,000 employees work tirelessly to make delicious foods
consumers can feel good about. From American brand icons like Kraft cheeses,
dinners and dressings, Maxwell House coffees and Oscar Mayer meats, to global
powerhouse brands like Oreo and LU biscuits, Philadelphia cream cheeses, Jacobs
and Carte Noire coffees, Tang powdered beverages and Milka, Cte d’Or, Lacta and
Toblerone chocolates, our brands deliver millions of smiles every day. Kraft
Foods (NYSE: KFT) is the world’s second largest food company with annual
revenues of $42 billion. The company is a member of the Dow Jones Industrial
Average, Standard & Poor’s 500, the Dow Jones Sustainability Index and the
Ethibel Sustainability Index.

Source: Innovation Center for U.S. Dairy