Rosemont, Ill. — Retailers experienced significant sales lift by pairing dairy with other meal-building products, according to new research from the Innovation Center for U.S. Dairy, which was founded by America’s dairy farmers. The findings are the result of a nationwide retail pilot test that developed and implemented several concepts to identify best practices and validate consumer acceptance of a meal solutions program.
“Meal solution merchandising provides a focused approach that presents a powerful, consumer-desired opportunity for retailers by grouping products needed for a specific recipe or given eating occasion,” said Rebecca MacKay, vice president, strategy, insights and planning, Innovation Center. “On average, the pilot concepts drove a 19.2 percent increase in units sold and a 20.5 percent increase in dollar sales without promotional pricing or additional marketing support. They are rooted in a number of consumer trends that draw on dairy’s strengths, which helped maximize purchase-driving potential.”
Meal Merchandising Solution Concepts
The merchandising concepts extended dairy outside of the traditional department perimeter to locations that encouraged meal building by pairing dairy with other products. This approach serves as an important tool to satisfy shoppers’ needs for meal solutions and maximizes key consumer drivers, such as delivering health and wellness benefits, answering a desire for homemade meals and prioritizing convenience.
Initial research tested 16 meal solution concepts, centering on breakfast, dinner and snacking eating occasions. Consumer input guided the strongest concepts for five in-store pilot tests:
- Breakfast Zone: A section adjacent to the dairy department highlighting quick, satisfying breakfast recipes for easy weekday preparation.
- Fuel Your Day: A snacking area near premade meals and the deli, highlighting nutritious, hunger-satisfying options for between or with meals, including protein-packed dairy products.
- What’s for Dinner: An endcap that creates one-stop shopping for a creative, family-pleasing dinner that’s easy to prepare.
- Chef’s Creation: A mobile merchandising area that showcases restaurant-quality meal solutions for the adventurous at-home chef.
- Perfect Pairings: Cross-merchandiser in produce with complementary dairy products to provide well-balanced snack options.
Breakfast, dinner and snacking eating occasions present prime
opportunities for retailers to build increased sales by better addressing consumer needs and providing easy solutions. Dairy, in particular, is a strong player for these efforts because it is a key component of meal-building baskets, as well as its sales-driving capabilities and its healthy halo.
“By offering consumers more information about their food and by highlighting usage ideas, the concepts provide retailers with differentiating options to help grow overall dairy sales,” said Bill Bishop, chairman, Willard Bishop, and chief architect, Brick Meets Click. “Focused excitement around dairy is new and can be very impactful.”
Each concept was evaluated for units sold, dollar sales and consumer perceptions. Test store employees also provided insights throughout the retail tests: All of this uncovered six best practices:
- Convenience: Include convenience as a core consideration for all meal solution merchandising executions, as consumers demonstrated a strong interest in convenience.
- Location: Location is a key success factor, as displays need to be in a place that makes intuitive sense to the shopper. Situate displays earlier in the shopping process to position them as a solution provider versus a nice afterthought.
- Visibility: Ensure that consumers can clearly see all signage, which will help grow their understanding of the concept. Display visibility has a role in performance.
- Specificity: Identify and include only products that truly address the merchandising concept’s specific needstate. Extraneous SKUs are a distraction.
- Simplicity: Keep the product mix and the number of SKUs simple to help enhance consumer acceptance.
- Long-term solution: Initiate a long-term meal solutions merchandising program that is refreshed often versus a shorter campaign. It takes time, exposure and planning for consumers to adjust their behavior.
“The pilots made shopping easier for consumers while also adding variety. They were engaged, purchased the showcased products, and understood the purpose and simplicity,” said pilot participant Scott Poole, vice president, center store sales, K-VA-T/Food City. “This shows that consumers are reactive to the ideas and concepts that we provided and are open to additional ways to incorporate dairy products into their meals. It behooves other retailers to implement this approach, as well.”
The premise of these meal solutions stemmed from the learnings of the Dairy Department of the Future – a substantial body of work, which ultimately presented retailers with a $1 billion opportunity to reinvent the dairy department by enhancing the shopper experience. Tested in more than 1,000 stores over a three-year period, the Dairy Department of the Future differentiates dairy from other retail departments, while increasing sales and store loyalty.
The five meal solution merchandising pilot tests were implemented at select Brookshire’s, Harris Teeter, K-VA-T, Roche Bros., Save Mart and Weis Markets stores. Grocery retailers can learn about meal solutions merchandising and access additional resources, including the full research report and a video that brings the project to life, by visiting www.USDairy.com/Retailers.
Innovation Center for U.S. Dairy® is a forum for the dairy industry to work together to address barriers and opportunities to foster innovation and increase sales. 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 includes dairy farmers and industry leaders representing key producer organizations, dairy cooperatives, processors, manufacturers and brands. The Innovation Center is staffed by Dairy Management Inc.™ Visit USDairy.com for more information about the Innovation Center for U.S. Dairy.
Source: Innovation Center for U.S. Dairy