Since COVID-19 became a major concern in mid-March, dairy sales have increased in the U.S. by a whopping 22% compared to the same period a year ago. Among the edible items purchased by shoppers, dairy is leading the pack when it comes to consumer demand.

Consumers are looking for one-stop shopping and have a goal of getting in and out of the store as quickly as possible, but dairy items are on their shopping list more often than not.

Levin says the fact that more people are at home results in a greater demand for dairy. 

People at home are doing more baking and cooking, and kids at home need snacks, which has driven increased demand for butter (sales increased 17.6%), milk (up 27.8%), yogurt (up 29.2 %) and cheese (up 32.9 %). Before COVID-19, dairy products were typically seeing 2% to 3% growth in sales.

Prior to COVID-19, about 20% of the U.S. population said they ate 90% or more of their meals at home. Now, about 50% of households report they are eating at home at least 90% of the time. 

Another reason sales of dairy have increased, according to a survey done by IRI, is the primary emotional benefit: Dairy products provide contentment. Consuming dairy makes consumers feel satisfied, comforted and nourished, all of which people may seek during uncertain times. The Midwest Dairy Association (MDA) initiated the study among dairy consumers who increased at least 25% in their purchasing of dairy products.

At the start of the pandemic, macaroni and cheese saw a huge boost in sales, partially because people like “comfort foods.” Levin says, “Products that are tried-and-true come into play, and certainly nothing speaks better of tried-and-true than the dairy industry.”

Levin says the dairy industry is doing a “phenomenal job” during this time of market growth. They are filling an important need and have plenty of which to be proud. 

Among the consumers who answered the survey about using dairy in their homes between June 25 and July 2, 2020, breakfast and afternoon snacks were the times of the day that had the largest growth in increased consumption, but consuming dairy was up at all times of the day. 

Prior to COVID-19, consumers made their dairy choices on a variety of innovative and sustainable attributes; most notably they were looking for recyclable packaging, organic, locally made and brands they recognized. 

Since March, that has shifted to consumers focusing on availability, price and food safety. The survey also noted consumers are now seeking out bulk packaging, promotion and nutritional value. Consumers are changing what they are looking for, says Levin, and it’s important for the dairy industry to change with them. 

Since COVID-19 restrictions began, one in five shoppers spent more time stocking up or buying larger sizes; more than one in 10 bought unfamiliar brands, and more than one in 10 bought more store brands. He encourages the dairy industry to consider continuing to innovate around various product dimensions to retain engagement – sizes, formats, flavors.

Marketing of dairy should focus on affordability and value, he adds. Money remains tight for many people in the U.S.

Many households are shopping less often but purchasing more on each trip to the store. “They are not treasure hunting,” says Levin. “So it is important to have promotion of dairy in front of them before they go to the store.”

He also noted that bulk packaging of dairy might be a way to give consumers what they are looking for. He noted some grocery stores are dedicating more shelf space to large bulk bags of cereal because that is what consumers are looking for.

Survey respondents were asked what retailers should be doing right now to increase dairy sales. The top three answers were offering a discount, preventing out of stocks and informing consumers of safety measures. Since COVID-19, 45% of consumers report the dairy items they were looking for at the grocery store being out of stock.

Since the pandemic started, 25% of American households have tried online shopping, including for dairy products. Levin says 70% of those people have said they are likely to continue online shopping once COVID-19 subsides. 

“Certainly, the growth in the dairy industry is tied to the boom of e-commerce,” he says. 

The dairy industry needs to think about how they fit into that new reality of online shopping, and it needs to develop even more of an online presence, including partnering with online retailers. This means processors and retailers must optimize capabilities and resources for processing online orders (staffing, prep space, training, etc.) and ensure proper handling to instill confidence in freshness via curbside and delivery fulfillment.  

IRI recommends the following actions for the dairy industry after COVID-19:

• Processors and retailers should make it easy for consumers to shop the way they want to eat, cross-promoting dairy with complementary categories – in circulars, online, coupons and promote yogurt as a back-to-school/back-to-work/lunchbox staple.
  
  
• Wellness professionals can offer healthy dairy-based recipe ideas and push yogurt as a healthy snack option versus other traditional snacks.  
  
  
• The industry as a whole should position dairy as an enabler toward achieving great homemade and healthy meals.

Research predicts once COVID-19 restrictions are lifted, consumers are more likely to continue using dairy products, such as butter for breakfast foods and baked goods, cheese for homemade pizza and as an ingredient in recipes, milk as an ingredient in recipes and yogurt as a snack.  

Kelli Boylen is a freelancer in northeast Iowa.

PHOTO: Larry Levin was among the presenters at the 2020 Dairy Experience Forum sponsored by the American Dairy Association of the Midwest. Photo courtesy of the 2020 Dairy Experience Forum.