A recent article in the New York Times described how many restaurant menus have started citing the provenance of their dairy products, including fluid milk and creamers, in the same way they boast of grass-fed rib-eye steaks and hydroponic tomatoes. Can this be done at retail? It’s time to tell a story about your dairy product, about your fluid milk. That’s the future of the dairy industry.
We know consumers are willing to spend more for artisan butter, cheese, ice cream and yogurt at farmers’ markets and upscale grocers. Why not milk? At Whole Foods Markets in the US, sales of grass-fed cow’s milk – much of it locally produced – have experienced “high double-digit growth during the past two years and will likely increase in 2016”.
The fluid milk industry might just be ready for the small-batch, locally made, artisan trend that has hit everything from beer to chocolate to potato chips.
The reality is that the low wholesale price of milk has left many mom-and-pop dairy farms struggling. Millennial entrepreneurs who embrace crafted foods and customisation are seeing something you, your dad and his dad did not see: milk can be so much more. This is not your daddy’s dairy any more. We do not consume the way we once did. Only the foods that adapt to consumers’ evolving on-the-go, better-for-you, better-for-the-world and story-telling lifestyle will thrive. Innovators are embracing boutique, high-end dairies and see them as a lucrative niche in a tough market.
The days of the all-you-can-eat, low-budget buffets are gone. Millennials and the cohort of people born after them, generation Z, which includes my two sons, are demanding consumers. This became very apparent when I recently went on two college tours with my tenth grader, first to the University of Wisconsin-Madison and then to my alma mater, University of Illinois-Champaign Urbana. The dining rooms in the residence halls look like upscale restaurants. Though still cafeteria-style, with Wisconsin having a pay-for-what-you-take format, while Illinois still takes an all-you-can-eat approach, the foods and beverages offered all tell a story. If it’s not the source, then it’s the nutrition. And when students dine on their own dollar on campus, they are going to cafés serving artisan and locally sourced products. These are young adults with an affinity for what they believe to be the best. This will not change. The milk industry needs to change.
The time is now to design milk beverages to speak to the needs of millennials and generation Z. Organic, lactose free, omega-3, grass fed – this is what they want. Extra vitamins and minerals, refueling and preventative – these are attributes that will get consumers to buy milk. Smaller-sized packaging for on-the-go convenience as well as delivery of nutrients is key. Adding value is paramount.
